FBI Reports Unprecedented Rise in Investment Fraud Schemes
The Federal Bureau of Investigation has reported an unprecedented rise
in investment fraud schemes and investor losses since 2011, according
to the Department of Justice. Victims of the schemes have lost more than
$20 billion in less than two years.
“This staggering number includes cases where the total amount victims
lost range from tens of thousands of dollars to hundreds of millions,
and, in some cases, billions in hard-earned savings,” wrote the
Department in a
Though approximately 800 federal fraud defendants have been charged, tried,
pled, or sentenced since 2011, authorities don’t seem to believe
there’s any reason to expect the current rise in investment fraud
cases to slow.
To protect their retirement funds and life savings, authorities recommend
investors arm themselves with the most potent prevention tool: education.
“Whether a cold-call, polished website, or e-mail solicitation, fraudsters
will use every means at their disposal to convince investors to part with
their money,” said SEC Director of Enforcement Robert Khuzami. “That
is why investor education is so critical—in maintaining financial
health as much as physical health, an ounce of prevention is worth a pound
Investor education teaches investors which red flags to watch for, how
to investigate an investment opportunity, and how to choose a legitimate
investment advisor. It also teaches investors to avoid the most common
approaches and tactics used by con artists to defraud unsuspecting victims.
Although the defendants in these federal prosecutions used a variety of
tactics and schemes, they often took the same approach,guaranteeing
high returns and, in many instances, providing falsified investment documents to victims,”
wrote the Department. “As a result, those victims lost retirement
savings, military survivor benefits, family death settlements, and money
set aside for college tuition and mortgage payments. While the Justice
Department has already obtained prison sentences for many of these scammers,
including one sentence of up to 50 years, for many of the more [than]
100,000 victims the damage to their families is irreparable.
Representatives from the FBI, Securities and Exchange Commission (SEC),
the Federal Trade Commission (FTC), the Department of Treasury’s
Financial Crimes Enforcement Network (FinCEN), the Commodity Futures Trading
Commission, the Bankruptcy Trustees, the Financial Industry Regulatory
Authority (FINRA), AARP, and the Better Business Bureau are holding investor
fraud summits across the country to help consumers protect their hard-earned
money from fraud. The summits are expected to be held in Connecticut,
Tennessee, California, Colorado, Ohio, and Florida.
If you are unable to attend a
summit, you can learn how to protect your hard-earned money from an ever-increasing
number of fraudsters or learn how to recover funds lost in an investment
scheme, take a
look at our free e-book, “Five Signs of Investment Fraud … And What to Do if it’s
Happened to You.” You also can find a number of
investor education articlesin our investment fraud library.