“Investments Sold Through Free Lunch Seminar Turned Out to be a Ponzi Scheme”

“The men allegedly conducted estate planning seminars, aimed primarily at retirees …, and sold promissory notes for investments in Turkish bonds to “individuals with substantial savings….”

“As through this world you wander you’ll see lots of funny men, some will rob you with a six gun and some with a fountain pen” (Woody Guthrie, Pretty Boy Floyd, 1939).

“Free lunch” seminars are a favorite tactic used by today’s fountain pen robbers who target mostly elderly retirees with substantial assets.  They know that audience members are unlikely to be vigilant investors looking for fraud or they would not be there in the first place.  Unfortunately, many audience members come there looking for someone to trust.  That is often their first and fatal mistake.  One recent example of this can be found in an article entitled “Men Charged in $28 Million Investment Scheme.” (more…)

Promissory Note Scam in Oregon

Promissory notes are the favorite vehicle for scam artists because they bear a couple indicia of reliability.

From Oregon comes another case involving the investment most likely to be involved in a Ponzi scheme — promissory notes.  According to the SEC release: (more…)

Mundane Motivations

The roots of most financial frauds reach into motivations with which we are all familiar.

Few people who end up as Ponzi scamsters set out to become infamous. None that I know of aspire to be despised and imprisoned. They set out with something else in mind. And oftentimes that something else is something that we’ve all desired: to make it through a difficult financial stretch. Who among us, besides the Mitt Romneys of the world, has not wondered how we are going to make it through a time in which our expenses far exceed our income? Today, from the UK, comes a story about how that very familiar feeling led one man to infamy. According to the UK’s Serious Fraud Office: (more…)

Double Trouble

Investment scamsters use promissory notes because they carry a couple of indicia of apparent safety.

Over the past several years, we have highlighted two types of investment schemes that are booming: promissory notes and distressed real estate. Last week the SEC brought an enforcement action that involves both. According to the SEC’s press release: (more…)

Small Story Teaches Big Lessons

You can learn how to protect yourself and those you love.

Part of my challenge in writing this blog is paring down long, detailed stories to a size that won’t deter you from launching into the story. That means that I sometimes have to leave out details — including good writing by the reporters who write these stories — that a different medium would allow. But the story for today is short. Even so, it is full of lessons that can mean the difference between a secure, well-funded retirement and penury. According to Eyewitness News 4, in Albuquerque: (more…)

Promissory Notes Used to Fleece the Faithful

The preachers who urge you to expect it are, at best, misinformed about what God promises or, at worst, con men of the most despicable sort.

The sermon is familiar. If you will but entrust yourself to God Almighty, he will bring you prosperity and material wealth here on earth. By that sermon, preachers have for hundreds of years convinced congregants to part with the rent money, the milk money, and whatever is hiding in the couch cushions, fully expectant that they will soon be millionaires whether by lottery numbers or bequest from a long lost relative. Such a windfall is never forthcoming. The preachers who urge you to expect it are, at best, misinformed about what God promises or, at worst, con men of the most despicable sort. A recent case out of Georgia is familiar. According to AJC.com: (more…)

Poverty Notes

Promissory notes are so often involved in fraudulent schemes that we ought to call them “poverty notes.”

“Promissory note scams are an epidemic.” — The Vigilant Investor, p. 133.

Doing what it does best, the SEC has shut down what it believes to be an ongoing investment fraud. Vigilant investors will recognize immediately the gargantuan red flag that flew over this investment. Look for it as you read the SEC’s press release: (more…)

Dentists, Fine Wines, and Promissory Notes

Securities salesmen often cold call from lists of professionals.

We warn often that promissory notes are dangerous, and that you must do a thorough due diligence investigation before investing in one. The SEC has recently filed yet another enforcement action concerning promissory notes. According to the SEC’s press release: (more…)

The Post-Madoff Tsunami Pushes Further Inland

On the day Madoff turned himself in, dozens of investment frauds began.

On a publicity swing for The Vigilant Investor a couple of months ago, I stopped by the CBS studios in New York for an interview with personal financial reporter Jack Otter. After the main interview, we chatted about trends in investment fraud and I told Jack what I’ve repeated here so often: promissory note scams are epidemic. Jack asked if I could stick around for another short interview about promissory notes. Here’s that interview. (more…)

Trial Set for Accused Montana Madoff

I don’t care if your 90-year-old grandmother is the salesperson.

Polson, Montana sits at the southern end of Flathead Lake in northwestern Montana. The town is known for cherry orchards and the lake, which is the largest natural freshwater lake in the western U.S..  If federal prosecutors have their way, it’ll soon be known as home to the biggest Ponzi scheme in Montana history. According to the Lake County Leader: (more…)

An Alleged Ponzi Aimed at the 99 Percent

Scamsters who target middle income investors love the PowerPoint pitch.

For the most part, Bernie Madoff’s victims were rich; hedge fund frauds typically target the wealthy. The dozens of pension funds that will lose money to a Madoff-like fraud this year have billions to invest. From a scamster’s perspective, this makes sense. You can’t steal money from those who don’t have it. But, the rich aren’t the only victims of investment fraud. As we discuss in The Vigilant Investor, there is a scam for every income level. An SEC enforcement action out of the nation’s capital highlights an alleged scam that targeted middle class investors. According to the SEC’s press release: (more…)

Last week, I had the pleasure of appearing on Coach Ron Tunick’s Coaching Your Business radio show. Toward the end of the show, Coach Ron asked me what investors most need to watch out for these days. Regular readers of the blog can guess the answer. Promissory note scams. We’ve called them an epidemic. We’ve told you not to invest in anything that involves a promissory note unless you get a professional due diligence investigation. Yet, they continue to thrive. Last week, the SEC filed an enforcement action against another alleged promissory note scam: According to the SEC’s press release: (more…)

Promissory Ponzi Pandemic

If you are considering an investment that involves a promissory note, please do not invest until you’ve done a thorough due diligence investigation.

I’ve been doing radio interviews lately in support of The Vigilant Investor. Among the things I like best about those interviews is that they give me a chance to reach more people with an urgent warning about promissory note frauds. They are running rampant across the investing landscape and investors who haven’t yet become vigilant are at serious risk of losing their assets to these scams. Last week, a judge in California sentenced a scamster in connection with a promissory note Ponzi. According to the Press-Telegram in Long Beach, California: (more…)

Promissory Notes and Ponzi Scams

Promissory notes and Ponzi schemes go together like Hollywood and cosmetic surgery.

Ponzi scamsters have to decide a few things. Among them are what to pretend to be doing to generate profits, what credentials to pretend to have, and what kind of investment to sell. They can make it anything they want because there is no substance driving the decision. They might sell you a stock, a bond, a debenture, a letter of credit, a hedge fund, a limited partnership, a REIT, CD, a CDO, an investment contract, or any number of other securities. These days, scamsters often are choosing to sell promissory notes. The SEC believes it has found another Ponzi scheme involving promissory notes; this one in Utah. According to the SEC’s press release: (more…)

The Little Shoppe of Promissory Notes

Nothing fits a down market as well as a promissory note scam.

I’m was in Seattle this week speaking to a meeting of the Ethics and Compliance Officers Association (ECOA). While in town I met with two consumer reporters from KOMO 4 TV, Connie Thompson and Herb Weisbaum.  We talked about The Vigilant Investor and what’s hot in investment fraud.  Of course, I mentioned the epidemic of promissory note scams, which we’ve reported on often.  And what should pop up on the SEC’s website while I’m in Seattle, but the story of a scam in Eastern Washington involving promissory notes?  According to the SEC”s press release: (more…)

Former FBI Agent Pleads Guilty to Ponzi Charges

Too often we believe that people with a lot to lose (like a license to practice a profession) would never put it at risk. But they do.

You can imagine how soundly Cary Alan Burdette’s victims slept. They’d given their money to a man who was not only an attorney, but also a former Special Agent for the FBI. Certainly, their money was safe. Famous last thoughts. Last week Burdette pleaded guilty to operating a Ponzi scheme. According to al.com: (more…)

Oil and Promissory Notes Don’t Mix

Regulators like the SEC and state securities commissioners have a job far too big for their meager budgets.

Gasoline is a necessity, not a luxury purchase. Everyone know that. That’s why those who promise riches from oil and gas investments will always have a head start with prospective investors. Everyone understands the profit potential, and tens of thousands of people this year will lose their life savings to oil and gas scams. The SEC believes it has caught one in West Virginia. According to the SEC’s press release: (more…)

The U.S. Securities and Exchange Commission (SEC) has commenced an enforcement action against a holding company for three registered broker-dealers and an investment adviser. Specifically, the SEC has charged AIC, Inc. and its President and CEO, Nicholas D. Skaltsounis with devising and orchestrating an offering fraud and Ponzi scheme by offering and selling more than $7.7 million in AIC promissory notes and stock. “Also named in the Complaint are AIC’s subsidiary, Community Bankers Securities, LLC (“CB Securities”), a broker-dealer, along with associated stockbrokers John B. Guyette, of Greeley, Colorado, and John R. Graves, of Pensacola, Florida, who was also an investment adviser.” According to the SEC’s press release: (more…)

This Week’s Alleged Promissory Note Fraud

Either way, you don’t want to give him or her your money.

In what has become almost a weekly occurrence, the U.S. Securities and Exchange Commission (SEC) has filed an enforcement action alleging a fraud involving promissory notes.  Specifically, the SEC has charged Luis Garg, Jason Zakocs, and four companies owned and/or controlled by Garg, RealFund Investment Trust (“RealFund”), First Atlanta, LP (“First Atlanta”), Weatherby LP (“Weatherby”), and Citiprop Corporation (“Citiprop”), with fraud.  According to the SEC’s press release: (more…)

Borrowing and “Borrowing”

If your investment adviser offers you an investment in a company he owns without telling you that you should seek independent advice about the transaction, the adviser has breached his fiduciary duty and you need to find another adviser.

Regular readers won’t be surprised that the SEC has found what it believes to be yet another fraud involving promissory notes. Specifically, the SEC has charged “Daniel Sholom Frishberg (“Frishberg”), principal of Daniel Frishberg Financial Services (“DFFS”), a Commission-registered investment adviser” with violating the anti-fraud provisions of the Investment Adviser’s Act of 1940.”  According to the SEC’s press release: (more…)

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