FBI's "Collateral Monte" Uncovers Billion-Dollar Investment Fraud

In a recent press release, the FBI announced that they had uncovered a billion-dollar investment fraud scheme by using an undercover operation named "Collateral Monte." This undercover operation was about eight years in the making. The FBI had received a number of tips and complaints from defrauded investors so they decided to investigate. One FBI agent posed as an investor who eventually became another "victim" of the scheme, but used his experience as evidence to convict the final three members of a group of con artists.

This group of investment scammers, like most scammers do, promised investors and potential investors that they would receive high returns on investment with little to no risk. The FBI set up a fake financial advisory office in Orange County, California and posed as advisors to wealthy O.C. residents. The FBI was, of course, not dealing with actual investors. They were using this to trap the suspected fraudsters, which they were eventually able to do.

As the undercover operation progressed, the people running the fraudulent operation began to use lines directly from the high-yield investment fraud playbook. We discussed many of these same tactics in our recent blog "Common Red-Flag Sales Pitches." These included:

  • Persuasion by exclusivity. The fraudsters attempted to persuade potential investors by saying that they were one of only a few chosen to receive this opportunity. Just because someone is promising you an "exclusive offer" doesn't mean it's a legitimate one. In fact, it often is a sign of a scam.
  • Persuasion by credentials. The con men attempted to lure investors by claiming that this specific investment program was regulated by the Fed (Federal Reserve Bank). They falsified credentials in order to make the investment scheme appear solid.
  • Persuasion by sympathy. The men running the investment scheme also tried to bait potential investors by claiming part of the returns would go to charity and various humanitarian organizations.

Scammers prey on potential investors and are constantly thinking of new tactics to use to persuade people into giving them their hard-earned money. Especially during the holiday season, investment schemes can run rampant. If you or someone you love has become a victim of an investment scheme such as this, contact a securities fraud attorney at Meyer Wilson today for a complimentary consultation regarding your case. Call us today to tell us what happened to you.


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