Last month, I got to meet Hollywood legend Mickey Rooney. He came to a conference at which I was speaking to talk about his experience with elder abuse. His story involved a member of his family keeping him a virtual prisoner in his own home and looting his savings. He has testified before Congress about the problem. He’s just the tip of an iceberg. There is a wave of investor abuse on the way that threatens to make us forget Bernie Madoff. A story out of Staten Island, New York highlights the danger that faces all senior investors. According to silive.com: (more…)
On April 28, 2011,
in Investors at Risk, New York, New York, Ponzi schemes, Retirees, Scams, Securities Industry (general), Senior Citizens,
by IW Dog
The financial legacy that they intended to leave to the next generation will instead buy a Porsche and a nice house for a “financial adviser.”
On March 31, 2011,
in Aging Parents, Baby Boomers, Investors at Risk, Scams, Securities Industry (general), Senior Citizens,
by IW Dog
Attendees heard from Mickey Rooney, himself a victim of elder abuse.
I speak all over the country to all kinds of groups, teaching them about the prevalence of investment fraud and how to avoid it. Every group is unique and all of them are thirsty for the information. But today I had the pleasure of speaking to a room full of people who are dedicated to protecting the most vulnerable in our society: the elderly. The 2011 Call to Action Conference in San Francisco was the Elder Financial Protection Network’s annual meeting. The EFPN describes itself as follows: (more…)
On March 16, 2011,
in Investors at Risk, Missouri, Missouri, Ponzi schemes, Prime Bank Scams, Scams, Senior Citizens,
by IW Dog
If you have an elderly relative, you can be certain that he or she will be targeted by a con man.
We posted earlier this week about a prime bank scam out of Colorado. Now, comes word of yet another one, this one in Missouri. Last week, Carl R. Todd of Raymore, Missouri pled guilty to conspiracy to commit wire fraud for selling a variation of the prime bank scam to elderly Missouri investors. According to a story in InfoZine: (more…)
On January 4, 2011,
in Baby Boomers, Investors at Risk, Legislation, Retirees, Senior Citizens,
by IW Dog
Securities industry lobbyists are only too happy to pour money into the campaigns of Congressmen and Senators, regardless of party, who are willing to support a return to business as usual.
Some sources report that new Republican majority in Congress has vowed to “defund” the Dodd-Frank Financial Reform Act of 2010. According to a recent story by Reuters: (more…)
On November 29, 2010,
in Investment Advisers, Michigan, Michigan, Ponzi schemes, Retirees, Scams, Senior Citizens,
by IW Dog
Elderly investors are vulnerable; roughly twice as likely as younger investors to be the victim of investment fraud.
Federal prosecutors in Detroit allege that Farmington Hills, Michigan, investment adviser Keith Epstein defrauded 17 elderly clients out of $17 million, then used that money to “financially support three exotic dancers, pay for his gambling habit, travel and art expenditures, and pay interest to other investors.” According to a story in the Detroit Free Press: (more…)
On November 9, 2010,
in Florida, Florida, Investors at Risk, Ponzi schemes, Retirees, SEC, Scams, Securities Industry (general), Senior Citizens,
by IW Dog
Sometimes investors who have reason to suspect a scam do not report it out of an understandable, but selfish, desire to have the scam continue long enough for them to get their money back.
Last week, a state court judge in Panama City, Florida spoke words often repeated in the past two years: ”You’re the Bernie Madoff of . . ..” This time the sentence ended with “Bay County.” Judge Michael Overstreet spoke those words to Harrison Jones in the course of sentencing Jones to more than 12 years in prison in connection with a Ponzi scheme that robbed 92 elderly people of more than $6 million. According to WJHG.com: (more…)
On September 15, 2010,
in Firms, Investors at Risk, New Jersey, PrimeVest Financial Services, Scams, Securities Industry (general), Senior Citizens,
by IW Dog
This case also reminds us that our elderly relatives are especially at risk from stockbrokers.
It’s a lot easier than you think for a stockbroker to steal from you. It’s even easier for him or her to steal from an elderly client. The FBI caught PrimeVest Financial Services broker Brian Anderson of Oradell, New Jersey doing just that. Anderson pled guilty to stealing $1.1 million from elderly customers by depositing their supposed investment checks into a bank account that he controlled. The court sentenced him to 68 months in federal prison.
On July 26, 2010,
in Investment Psychology, Investors at Risk, Ponzi schemes, Quebec, Quebec, Scams, Securities Industry (general),
by IW Dog
What keeps many from protecting themselves from this pain is the persistent, hardwired belief that such tragedy will never happen to them.
A group of seven senior citizens calling themselves the Earl Jones Fraud Assistance Information and Assistance Service has studied the impact of investment fraud on the victims. (Earl Jones is the Montreal businessman sentence to 11 years in prison for running a decade-long Ponzi scheme which robbed more than 180 victims of more than $45 million). Funded by the Quebec Ministry for the Elderly, the study shows the painful human toll that investment scams take from those who lose their life savings to those scams. Covering the study for TheSuburban.com, Ian Howarth writes: (more…)
On July 14, 2010,
in KMS Financial Services, Inc., Montana, Montana, Ponzi schemes, SEC, Scams, Securities Industry (general), Senior Citizens,
by IW Dog
The FBI reports that Americans lose $40 billion every year to investment fraud. But that figure will not motivate anyone to act. It is a sterile number that does not communicate the humiliation, misplaced guilt, and real world consequences to the victims of investment fraud.
Angela Brandt of the Helena Independent Record has been following the story of Arthur Leroy Heffelfinger (Heffelfinger) a former stockbroker with KMS Financial Services Inc. (KMS). Last week Brandt reported that Heffelfinger has pled guilty to two felony charges arising from the eight-year, $2 million Ponzi scheme he ran from his KMS office. In her story about the guilty plea Brandt writes: (more…)
On April 29, 2010,
in Commonwealth Financial, Firms, Investment Advisers, SEC, Scams, Securities Industry (general), Senior Citizens, Texas,
by IW Dog
First, your friendly neighborhood stockbroker, the one who everyone trusts because he is such a nice guy, is not necessarily equal to the trust. Unless you’ve done in-depth due diligence on the broker, you know absolutely nothing worth knowing about him.
There are fewer than 30,000 people in Corsicana, Texas, a little town about an hour south of Dallas on Interstate 45. Commonwealth Financial stockbroker Susan G. Slovak was likely well-known in town. Elderly clients trusted her to take care of their retirement nest eggs. A recent enforcement case from the U.S. Securities and Exchange Commission shows that Slovak breached that trust and that Slovak’s supposed supervisor at Commonwealth, Beth R. Chapman, did not fulfill her duty to keep an eye on Slovak. According to the SEC: (more…)
On March 24, 2010,
in Investment Advisers, Investors at Risk, Scams, Securities Industry (general), Senior Citizens,
by IW Dog
The gang of senior citizens ambushed him outside his home. One of them hit him over the head with a walker. They bound him with tape, bundled him into a cardboard box which they put into the trunk of an Audi, and set off for a large house on the shores of Lake Chiemsee in Bavaria.
The gang of senior citizens ambushed him outside his home. One of them hit him over the head with a walker. They bound him with tape, bundled him into a cardboard box which they put into the trunk of an Audi, and set off for a large house on the shores of Lake Chiemsee in Bavaria. They stopped for gas and he escaped briefly. They caught him and beat him, breaking two ribs, pushed him back into the trunk and made the last leg of the 300-mile trip to the house. They stripped him naked and held him in the basement. They tortured him. They wanted their $3.4 million back. (more…)
On February 15, 2010,
in Baby Boomers, Investor Protection, Investors at Risk, Senior Citizens,
by Investor's Watchblog
What makes Anitques Roadshow such a popular show on both sides of the pond? It is the idea that people may be holding onto seemingly worthless items of personal property that are really worth a fortune. If you have ever seen the show, you know that people come on the show to have their items appraised by [...]
What makes Anitques Roadshow such a popular show on both sides of the pond? It is the idea that people may be holding onto seemingly worthless items of personal property that are really worth a fortune. If you have ever seen the show, you know that people come on the show to have their items appraised by a knowledgeable, skilled appraiser. They realize that only someone with experience and training can tell the difference between Abraham Lincoln’s signature and a clever forgery. (more…)
On January 26, 2010,
in Investment Advisers, Investor Protection, Investors at Risk, SEC, Securities Industry (general),
by Investor's Watchblog
Registered investment advisers (RIAs) are different from stockbrokers; at least they are supposed to be. RIAs owe you a fiduciary duty, which means that they are supposed to put your interests first and disclose any possible conflicts of interest. But many investment advisers do not live up to that duty. The U.S. Securities and [...]
Registered investment advisers (RIAs) are different from stockbrokers; at least they are supposed to be. RIAs owe you a fiduciary duty, which means that they are supposed to put your interests first and disclose any possible conflicts of interest. But many investment advisers do not live up to that duty. The U.S. Securities and Exchange Commission has obtained judgments against two stockbrokers who paid bribes to investment advisers to induce them to use those stockbrokers in placing trades for their clients accounts. According to the SEC and U.S. District Judge P. Kevin Castel David Harrison Baker, Daniel Schrieber, and Schrieber’s firm, Granite Financial Group, paid bribes to two RIAs, Brian Travis and Nicholas Vulpis. According to the SEC’s complaint:
On January 25, 2010,
in Investor Protection, Investors at Risk, Pump and Dump, SEC, Scams, Securities Industry (general), Texas,
by Investor's Watchblog
The U.S. Securities and Exchange Commission has charged Summit Advisory Partners and its managing partner, Robert Feeback with directing an illegal pump and dump scheme. According to the SEC, the scheme allowed three stock promoters, Ryan Reynolds, Jason Wynn and Carlton Fleming, to make millions by purchasing shares cheap, hyping the companies with false press releases, and then selling [...]
The U.S. Securities and Exchange Commission has charged Summit Advisory Partners and its managing partner, Robert Feeback with directing an illegal pump and dump scheme. According to the SEC, the scheme allowed three stock promoters, Ryan Reynolds, Jason Wynn and Carlton Fleming, to make millions by purchasing shares cheap, hyping the companies with false press releases, and then selling to the public at inflated prices.
On January 22, 2010,
in Investor Protection, Investors at Risk, New York, SEC, Scams, Securities Industry (general),
by Investor's Watchblog
What do stockbrokers do when a regulator kicks them out of the securities industry? Oftentimes, they keep right on selling. The SEC has charged Bernard Daniel Braver with working for an unregistered investment company, Rabinovich & Associates, LP, operated by Alex Rabinovich, who the NASD tossed out of the industry years ago. The firm operated out [...]
What do stockbrokers do when a regulator kicks them out of the securities industry? Oftentimes, they keep right on selling. The SEC has charged Bernard Daniel Braver with working for an unregistered investment company, Rabinovich & Associates, LP, operated by Alex Rabinovich, who the NASD tossed out of the industry years ago. The firm operated out of a storefront boiler room in Brooklyn and raised more than $2.7 million from at least 169 investors, many of them elderly, through the sale of limited partnerships (“the Fund”).
On January 21, 2010,
in Investor Protection, Investors at Risk, Retirees, Scams, Serious Fraud Office, United Kingdom, United Kingdom,
by Investor's Watchblog
The island of Majorca is off the Mediteranean Coast of Spain. For many years it has been a favorite vacation spot for Brittons seeking sunshine and retirement. The UK’s Serious Fraud office has launched an investigation into a possible 20 million pound fraud that targeted British retirees living on the island. Specifically, the SFO believes [...]
The island of Majorca is off the Mediteranean Coast of Spain. For many years it has been a favorite vacation spot for Brittons seeking sunshine and retirement. The UK’s Serious Fraud office has launched an investigation into a possible 20 million pound fraud that targeted British retirees living on the island. Specifically, the SFO believes that John Hirst and his firm Gilher, Inc. “targeted British nationals and other expatriates” living on Majorca with a scheme that promised guaranteed returns.The Times of London described Hirst as follows:
Hirst, who ran the fund for seven years while living on the island, was a well-known figure in the expat community and was a keen cricketer. Most of his clients are thought to have been friends or social acquaintances. It is understood he has returned to Britain but has not contacted the authorities. He told investors he had been diagnosed with leukaemia.
That description is typical in three respects. First, notice that Hirst was well-known and socially active. Scam artists are big hits on the cocktail circuit. They are naturally gifted at engendering trust. You like them right away.Second, notice many of the alleged victims were friends or social acquaintances. Running a scam is all about establishing creditbility and trust. Those who consider you a friend are those most likely to believe that you would never betray their trust. They are therefore less likely to do a pre-investment investigation that might warn them away from the scam.Finally, notice the claim to have a deadly disease. Scam artists, when caught, often try to fake their own death or offer some reason why victims ought to pity them.Those who entrusted their money to Hirst are smart people. They worked hard and saved to afford a comfortable retirement. Yet, if the SFO finds a fraud, those people likely fell for it because they believed the one thing that all victims of financial scams believe — that it could never happen to them. If you want to protect what it took you so long to save, do what banks do when they move cash: hire private protection.
On January 20, 2010,
in Florida, Florida, Investor Protection, Investors at Risk, Ponzi schemes, SEC, Scams, Securities Industry (general),
by Investor's Watchblog
When I was in high school, I took a class called “On Death and Dying,” in which we studied Dr. Elizabeth Kubler-Ross’s book of the same name. Dr. Ross identified five distinct stages through which people pass after learning that their death is imminent. The first, and most stubborn, of those stages is Denial.Through 20 years of representing investors [...]
When I was in high school, I took a class called “On Death and Dying,” in which we studied Dr. Elizabeth Kubler-Ross’s book of the same name. Dr. Ross identified five distinct stages through which people pass after learning that their death is imminent. The first, and most stubborn, of those stages is Denial.Through 20 years of representing investors I have learned that the Five Stages of Grief apply equally to situations in which people lose their nest egg to an investment fraud. Denial is stubborn and scam artists know that. They are such astute students of human emotions and reactions that they often take advantage of the Denial stage to frustrate the SEC’s investigation of their scam. A case currently pending in Florida illustrates the point.Marian Morgan is in the federal detention center in Tampa charged with operation (with her husband) of a Ponzi scheme called Morgan European Holdings, which allegedly bilked more than 100 investors out of more than $10 million. She wants out of the detention center pending her trial. Emails she sent to investors before her arrest have become significant in the judge’s decision to leave her in the detention center for now.According to HeraldTribune.com reporter Michael Pollick, one of the emails that Morgan sent to investors represented that, if investors reported the scheme to authorities:
NO ONE will get one red cent. The powers that be will FREEZE all funds and years and years will go by before they ‘complete’ their investigation. When they are done they will CONFISCATE all funds as fees for their services and the participants will get one big GOOSE EGG, NADA, NOTHING, ZERO.
Scam artists often send message like this one. Oftentimes they work, with victims refusing to cooperate with the only authorities with the power to salvage any part of their nest egg. The resulting delay in completing the investigation allows the scam artists time to move money off-shore and/or to pay off squeaky-wheel investors, using money invested by other victims.The only way to avoid the Denial stage is to never fall for a cleverly-disguised scam. That means taking precautions like those banks take when they move cash. No bank asks a teller to throw $10 million in cash into the back of her Camry and drive it to a suburban branch. Instead, they hire private protection to ensure that the money stays in their possession. Smart investors are doing the same and have avoided the financial ruin that so many seniors are suffering through now.
On January 20, 2010,
in Investor Protection, Investors at Risk, Massachusetts, SEC, Scams, Securities Industry (general),
by Investor's Watchblog
Gregg Thomas Rennie was a stockbroker in Quincy, Massachusetts. According to prosecutors, he used that status to defraud his brokerage customers out of more than $3 million, by promising them a return of 12 percent per year through investment in fictitious “federal housing certificates.” According to prosecutors, Rennie targeted elderly investors, convincing them to [...]
Gregg Thomas Rennie was a stockbroker in Quincy, Massachusetts. According to prosecutors, he used that status to defraud his brokerage customers out of more than $3 million, by promising them a return of 12 percent per year through investment in fictitious “federal housing certificates.” According to prosecutors, Rennie targeted elderly investors, convincing them to cash in relatively safe investments in order to invest in Rennie’s scheme and using their money to pay his personal expenses.
On January 19, 2010,
in Florida, Florida, Hedge Funds, Investor Protection, Investors at Risk, Ponzi schemes, SEC, Scams, Securities Industry (general),
by Investor's Watchblog
We first blogged about Arthur Nadel’s hedge fund scam in January 2009, after Nadel followed the oft-followed course of financial scamsters who run when exposure is imminent. The U.S. Securities and Exchange Commission has now filed an enforcement action against two Florida-based investment advisers who worked with Nadel. The SEC charged Neil V. Moody and his son, Christopher D. Moody, [...]
We first blogged about Arthur Nadel’s hedge fund scam in January 2009, after Nadel followed the oft-followed course of financial scamsters who run when exposure is imminent. The U.S. Securities and Exchange Commission has now filed an enforcement action against two Florida-based investment advisers who worked with Nadel. The SEC charged Neil V. Moody and his son, Christopher D. Moody, with distributing client statements that materially overvalued the assets in the hedge funds. Those inaccurate statements lulled investors into believing that their nest eggs were safe and allowed Nadel of extend the scam far beyond the point at which it otherwise would have come to light.
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Athletes, Entertainers, and the Rest of Us
Painful experience has taught millions that those answers are woefully inadequate.
You have something in common with every player taken in this year’s NFL draft, NBA draft, and MLB draft, with every face that has ever graced the silver screen, with every rock star who has ever played the biggest venue in your town. Your money is irresistible to con men playing the role of trusted advisers. A recent article by Peter Keating of ESPN The Magazine details the con run by James Brown and Darnell Jones against young athletes. And the recent case of Ken Starr, the financial adviser to the stars, exposes how entertainers offer suffer the same fate. (more…)