Examples of Real-Life Investment Fraud
| November 18, 2019
NASAA recently issued a list of the top products and practices that trap unwary investors. We’ve talked before about these general types of investment scams, but let’s look at some of the concrete examples of investment fraud in action that NASAA has provided.
Gold and Precious Metal Investments
The founder of Gold Bullion Exchange allegedly took in investors through a telemarketing campaign related to bullion purchases. In this alleged Florida investment scam, investors were told they would be able to purchase the metal investment through a leveraged financing model, which would mean they only needed a small amount of the total purchase price to get started. Unfortunately, it is believed that none of the investors’ money ever went into the metal investments, despite the fees and commissions paid. Instead, officials believe that at least 1400 investors lost a total of $29.5 million.
Promissory notes figured strongly in an alleged Alabama Ponzi scheme. Investors believed they would see returns of up to 12% on the promissory notes, which were supposedly based in medical technology and real estate. Securities regulators who investigated the scam believe that biggest part of the investors’ cash was instead used to pay off prior investors in the scheme.
Distressed Real Estate Scams
In a similar fashion, a Florida investment scam supposedly lured in investors who hoped to make returns of 12% on an investment that would refurbish distressed real estate. Although 39 investors put in a collective $2.3 million, officials alleged that the scheme was an investment scam, and that the Florida man instead used investors’ money for himself. The alleged fraudster pleaded guilty to conspiracy to commit mail fraud and wire fraud in the case.
In another case of investment fraud perpetuated via telemarketing, officials in Colorado alleged that an out-of-state oil and gas company attempted to trick investors into putting their money into an oil drilling opportunity, but did not have the proper licensing or registration to do so.
As investment fraud lawyers, we see the victims of these types of scams every day, and we have personally spoken to victims all over the nation who have lost “nest eggs,” college savings, and retirement accounts. If you have already lost money to investment or securities fraud, call an experienced and helpful FINRA lawyer today. We have recovered millions of dollars for our clients across the nation, and we look forward to helping you.