Bishop- Attorney in St. Louis Sentenced to 40 Years

U.S. District Judge Linda Reade calculated that when BLP collapsed, 111 investors were owed roughly $56 million

According to a recent article written by Courthouse News Service, Martin Sigillito of St. Louis, an attorney and an American Anglican bishop, has been sentenced to 40 years in prison.  He is said to have devised the largest Ponzi scheme in local history. (more…)

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The “.44 Magnum Investment” Fraud

“[H]e named the program accordingly because “when people found out they’d been ripped off, they would buy a .44 Magnum and shoot themselves in the head.”

Another investment con and more personal tragedies that could have been prevented have occurred.  This time the SEC has charged Geoffrey H. Lunn of Sheridan, Colorado with operating a $5.77 million investment scheme with marketing assistance from Darlene A. Bishop of Odessa, Texas, and Vincent G. Curry of Las Vegas.  Lunn falsely told investors that he was vice president of a firm whose executives had connections to Dresdner Bank. The fictitious firm, Dresdner Financial, with a name similar to a Dresdner Bank, a legitimate bank, apparently gave Lunn an aura of credibility with investors. (more…)

Get In the Game

It will cause so much devastation in the months and years to come that it will make us forget Bernie Madoff.

I’ve been warning for the last several years about the tsunami of investment fraud currently sweeping around the globe. It’s already cost baby boomers, senior citizens, pension funds, college endowments, and other investors more than $100 billion and will cause so much devastation in the months and years to come that it will make us forget Bernie Madoff. Having warned you as best I can through this blog, speeches, and The Vigilant Investor, I’ve decided that the best place for me in this battle is back at the SEC, where I first caught the investor protection bug.  On Monday I begin work as a Senior Trial Counsel in the SEC’s Atlanta Office. Knowing the caliber of people in that office as I do, I have never been so excited to start a job. I pray that those of you who have followed this blog and who have put yourselves through the training to become vigilant investors, will contact me when you discover an ongoing fraud.  My new email address will be [email protected]. (more…)

“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…)

The One Phone Call You Must Make

You’ll never realize that your money is at risk until it is far too late to recover it.

I have been swimming in an ocean of fraud and fraudsters for the past 22 years. It’s taught me some valuable things and unique approaches to protecting investors from frauds so clever that you’ll never realize that your money is at risk until it is far too late to recover it. The Vigilant Investor teaches those approaches. You don’t have to buy it (although it’s going on Amazon for just over $2 — The Wall Street Journal called is “a fascinating and valuable read” — and would make a great Christmas gift for your parents), but please pick it up at your local library. And please have your elderly parents read it. Hawking my book aside, though, just a day away from a big change in my career (stay tuned for tomorrow’s post), I have been thinking about what message I want to make certain comes through loud and clear; the one piece of advice I want you to remember if you remember nothing else. The following story sets it up. According to a recent SEC release: (more…)

If It Sounds Too Good To Be True, You Are Talking To An Amateur

For every one buffoon who promises ridiculous returns, there are several competent scamsters who know better than to do so.

For the last several decades — at least the last five during which I have been around — we’ve been fed well-meaning but dangerously incomplete information about how to avoid the financial ruin that comes with investing in a scam. The old axiom: “If it sounds too good to be true, it probably is,” makes its way onto every list of how to keep your nest egg safe. What makes the axiom so dangerous is that it is almost true, as far as it goes. Because, of course, if an investment sounds too good to be true, it is (not “probably  is”) too good to be true. Take a look at the story of a recent case in which the axiom would have protected people who heeded it. Then we’ll talk about why the axiom, by itself, will never be enough. According to Courthouse News Service: (more…)

A Tsunami Swamping the Globe

You are prone to the blindness that I’m talking about.

The tsunami of investment fraud that we’ve been warning about for four years is engulfing investors worldwide. This week we read about a large suspected Ponzi scheme in the Phillipines. According to Business Mirror: (more…)

Consider It A Dealbreaker

Please add this hard and fast rule to your investment toolbox.

Somewhere along the investing road, almost every investor comes across one piece of advice that is easy to remember and apply. I’m not talking about the nearly worthless axiom “If it sounds too good to be true, it probably is,” which has led more people to lose their nest eggs than all Bernie Madoff’s victims combined. I’m talking about good, solid pieces of sound advice, like, “Never write a check directly to your financial adviser.” From Connecticut comes a story that should provide another bullet in the savvy investor’s arsenal. According to ctpost.com: (more…)

From the Bottomless Bag of Tricks

Notice three proven tactics that these defendants used.

Those who make their living by swindling investors aren’t “smash and grab” types. Generally, they devote time and resources into studying how best to separate people from their hard earned nest eggs. A recent case from the SEC’s Atlanta office offers a good example. According to the SEC’s release: (more…)

The Jed Clampett of Solar Energy

There is another energy sector scam that is pushing for its place in the energy scam pantheon.

There are so many oil and gas scams out there that we could launch a sister blog that covered nothing else. The profit potential of fossil fuels is long established and every investor dreams of becoming the next Jed Clampett. But there is another energy sector scam that is pushing for its place in the energy scam pantheon: the solar energy scam. This week the SEC filed an enforcement case that highlights the rise of such scams. According to the SEC’s release: (more…)

Destined for the Prison Band

The really dangerous characters look exactly like legitimate businesspeople.

What if you discovered, in your parent’s basement, a recording of unreleased tracks from The Rolling Stones, The Beatles, and Carlos Santana? Those would be worth something, wouldn’t you think? So did many other people who invested with Marino deSilva, who said he owned those recordings. deSilva told prospective investors that part of the money generated from the digital remastering and release of the recordings would benefit charity. Instead, he spent the money living the life of a rock n roll star, and keeping up appearances by making Ponzi payments to early investors. According to a Forbes story about the scam: (more…)

“Unprecedented Rise in Investment Fraud”

“If it sounds too good to be true . . .” is a pathetic excuse for wisdom.

For three years now, we’ve been warning that a tsunami of investment fraud is breaking over the investment community and that the destruction will make us forget Bernie Madoff. It turns out that federal prosecutors have come to the same conclusion. According to the Wall Street Journal: (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…)

SEC Accuses Radio Host

Charisma is no predictor of character.

In connection with the launch of The Vigilant Investor, I conducted dozens of radio interviews all across the country, and a few overseas. Some of those shows were hosted by financial advisers who use their shows not just to inform, but also to market their services. I don’t know the numbers, but my guess is that the radio shows prove to be an effective marketing tool. Unfortunately, not every financial adviser who hosts a radio show deserves the credibility that seems to come purely through his or her regular spot on the airwaves. The SEC believes that it has found another radio host who used his relative fame to defraud his clients. According to InvestmentNews: (more…)

Former MetLife Representative Sentenced

Those impressions are not earned; they are bought with advertising dollars.

What’s in a name? If I asked you to tell me which company is more likely to lead its customers into a Ponzi scheme, MetLife, Inc. or Investments by Steve, LLC, few of you would chose MetLife. That’s the power of a name. Corporations spend millions drilling them into our brains and associating the name with notions of fidelity and trust. But, consider this story about a former MetLife representative. According to NewsLeader.com: (more…)

You Don’t Want What They’re Selling At That Conference

Many fraudsters roll out their scams at such conferences.

You might learn about an investment conference from a friend. Or your stockbroker might tell you about it. He or she will say that representatives from a businesses will be there describing their business venture and answering questions from people who are interested in investing. It’s an “invitation only” event, at a very nice place. It’ll sound harmless. And you don’t have plans for that evening anyway. But, trust me, you don’t want what they are selling there. According to WREX in Rockford, Illinois: (more…)

Poland Joins The Club

Institutional investors and very wealthy individuals are just as susceptible to this kind of fraud as first time investors.

It’s the rare country that hasn’t seen at least one large investment fraud in the headlines over the past few years. We’ve written about most of them. Today’s story welcomes another country into that sad club. According to newser.com: (more…)

Your Parents Are In Danger

The incompetents who promise outrageous returns make the newspapers, but they have very little in common with the community of competent financial scamsters who make off with billions in investor savings every year.

Maybe you comfort yourself with the idea that your parents — as elderly as they’ve become — are too smart, sensible, or responsible to ever fall for an investment scam. When you think about financial scams you think of a Nigerian general who wants to borrow your bank account or a fly-by-night huckster who promises to double your money in 90 days. Surely, you think, my Mom and Dad would never fall for one of those. Mom and Dad are conservative investors who deal with a big-name brokerage firm. Take a look at this news release about a recent case in Nevada: (more…)

If You Want A Different Result . . .

Scientists tell us that the battle isn’t so much logical thought versus emotions as it is conscious thought versus subconscious, hard-wired cognitive biases.

The Washington Times wrote this week about Ponzi schemes. They noted that the SEC has filed enforcement actions against four suspected Ponzi schemes in the past two weeks alone, and quoted Lori Schock, the Director of the SEC’s Office of Investor Education and Advocacy: “Con artists are very persuasive when it comes to convincing people to turn over their money for phantom riches. Their emotions get built up into it, and they stop thinking logically.” While Ms. Schock is correct, there is more to the problem than emotions overriding logical thought. But, before we get to that, please read more of the story from The Washington Times: (more…)

Double Affinity Fraud

Chances are that, by that point, many members of the group have already set fire to their nest eggs without even knowing it.

You name the group and the chances are that it has been targeted by an affinity fraudster. On this blog we’ve written about affinity frauds targeting immigrants, ex-patriots, retired bus drivers, Ferrari owners, the blind, the deaf, Jews, Muslims, Christians, Hindus, and many other groups. Last week came word from the Commodity Futures Trading Commission (CFTC) of an alleged affinity fraud that targeted members of two distinct groups, both of which have been the target of affinity fraudsters before. According to the CFTC: (more…)

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