*** Schemes and Scams ***

 

There are many schemes and scams being conducted both by mail and e-mail. Beware of these scams and the helpful list links to authoritative and informative sites where you can learn about how to protect yourself or report a scam.

List of web sites providing information about schemes and scams:

FBI
http://www.fbi.gov/cyberinvest/escams.htm                                      

Federal Trade Commission
http://www.ftc.gov/bcp/menus/consumer/tech/privacy.shtm 
http://www.ftc.gov/bcp/edu/microsites/idtheft/ 

U.S. Securities and Exchange Commission
http://www.sec.gov/investor/pubs/cyberfraud.htm 

Internal revenue Service
http://www.irs.gov/newsroom/article/0,,id=98269,00.html

Federal Citizen Information Center
http://www.pueblo.gsa.gov/scamsdesc.htm

Better Business Bureau
http://www.bbb.org/ALERTS/Scam.asp 

U.S. Secret Service
http://www.secretservice.gov/criminal.shtml 

National White Collar Crime Center
http://www.nw3c.org/ 

Internet Crime Complaint Center
http://www.ic3.gov/ 

U.S. Postal Inspection Service
http://postalinspectors.uspis.gov/ 

U.S. Department of Education
http://www.ed.gov/about/offices/list/oig/misused/sscams.html 

Merchant Risk Council
https://www.merchantriskcouncil.org/press.php 

Additional web site offering news and descriptions about various scams:
www.scambusters.org
http://www.hotscams.com
http://www.aarp.org/money/wise_consumer/scams/
http://onguardonline.gov/spam.html
http://www.crimes_of_persuasion.com/contents.htm
http://www.fraud.org/tips/internet/fakecheck.htm
http://www.us_cert.gov/reading_room/emailscams_0905.pdf 
http://www.antiphishing.org/consumer_recs.html 
http://www.bizymoms.com/scams.html
http://www.snopes.com/fraud/telephone/809.asp 
http://www.elsop.com/wrc/complain.htm 
www.nacacnet.org/MemberPortal/ForStudents/ScholarshipScams/
http://www.modelingscams.org/
http://www.treasurydirect.gov/instit/statreg/fraud/fraud.htm
http://security.yahoo.com/article.html?aid=2006111501
http://www.overseasdigest.com/scams.htm 
http://ca.com/securityadvisor/virusinfo/virus.aspx?id=38328
http://home.rica.net/alphae/419coal/
http://www.hoax_slayer.com/email_lottery_scams.html 
 

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International:
Be extra careful when considering any investment opportunity that comes from another country, because it's difficult for U.S. law enforcement agencies to investigate and prosecute foreign frauds.
 

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Investment Schemes:
Investments promising high rates of return with little or no risk. The investment may claim the use of off shore accounts. Promoters may tout their financial expertise, financial connections, insider information, provide phony statistics, etc. The investment may come with guarantees, and buy back clauses. They provide little detail about the actual investment, but stress the high rates of return. These investments schemes are often part of a pyramid scheme.
 

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Nigerian Scam:
The Nigerian Scam has been around for more than 20 years. It is an advance fee scam where a person is contacted and told a story about someone dying, a huge inheritance, over invoiced, double invoiced, etc. and there is a large sum of money they need assistance in moving into/out of the country. Victims are asked to pay the fees for transferring the funds and they will be rewarded by sharing in the funds - once transferred. The scam may also be presented as a business proposal.
The victim may be contacted by mail, or e-mail. The letter may appear to be from an attorney/barrister/solicitor. The proposal may say the money is in Thailand, England, S. Africa, Isle of Man, Nigeria, or other country. E-mails might provide URL for an official looking web site. Don’t be fooled!

The most common forms of these fraudulent business proposals fall into the following main categories:
Disbursement of money from wills
Contract fraud (C.O.D. of goods or services)
Purchase of real estate
Conversion of hard currency
Transfer of funds from over invoiced contracts
Sale of crude oil at below market prices

It is all nonsense. It is all a scam.

Financial Consultants new to the finance arena need to be aware of these types of scams.
Do not answer these e-mails. Do not provide them any personal information. Delete the e-mails immediately.

 

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Overpayment Scams:
When selling products on-line watch out for a buyer that over pays then asks for a refund of the difference. Their check bounces, but they already have your money.

When renting properties a renter may provide a deposit, but then have a change of mind and asks for a refund. Again - their check bounces, but they already have your money.

This same scam is can also be used in the purchase of vehicles or other more expensive items.
 

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Subpoena Notifications:
With the threat of contempt of court the notification orders the e-mail recipient to click on a link for further information, forms, etc. Don’t do it. Malicious code will be downloaded to your computer, possibly destroying the contents of your computer. Phone the court to verify the subpoena.
 

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The SEC is Tracking Fraud:
From the SEC’s website http://www.sec.gov/investor/pubs/cyberfraud.htm , here are sample of recent cases in which the SEC took action to fight Internet fraud:

Francis A. Tribble and Sloane Fitzgerald, Inc. sent more than six million unsolicited e-mails, built bogus web sites, and distributed an online newsletter over a ten-month period to promote two small, thinly traded "microcap" companies. Because they failed to tell investors that the companies they were touting had agreed to pay them in cash and securities, the SEC sued both Tribble and Sloane to stop them from violating the law again and imposed a $15,000 penalty on Tribble. Their massive spamming campaign triggered the largest number of complaints to the SEC's online Enforcement Complaint Center.

Charles O. Huttoe and twelve other defendants secretly distributed to friends and family nearly 42 million shares of Systems of Excellence Inc., known by its ticker symbol "SEXI." Huttoe drove up the price of SEXI shares through false press releases claiming non-existent multi-million dollar sales, an acquisition that had not occurred, and revenue projections that had no basis in reality. He also bribed co-defendant SGA Goldstar to tout SEXI to subscribers of SGA Goldstar's online "Whisper Stocks" newsletter. The SEC obtained court orders freezing Huttoe's assets and those of various others who participated in the scheme or who received fraud proceeds. Six people, including Huttoe and Theodore R. Melcher, Jr., the author of the online newsletter, were also convicted of criminal violations. Both Huttoe and Melcher were sentenced to federal prison. The SEC has thus far recovered approximately $11 million in illegal profits from the various defendants.

Matthew Bowin recruited investors for his company, Interactive Products and Services, in a direct public offering done entirely over the Internet. He raised $190,000 from 150 investors. But instead of using the money to build the company, Bowin pocketed the proceeds and bought groceries and stereo equipment. The SEC sued Bowin in a civil case, and the Santa Cruz, CA District Attorney's Office prosecuted him criminally. He was convicted of 54 felony counts and sentenced to 10 years in jail.

IVT Systems solicited investments to finance the construction of an ethanol plant in the Dominican Republic. The Internet solicitations promised a return of 50% or more with no reasonable basis for the prediction. Their literature contained lies about contracts with well known companies and omitted other important information for investors. After the SEC filed a complaint, they agreed to stop breaking the law.

Gene Block and Renate Haag were caught offering "prime bank" securities, a type of security that doesn't even exist. They collected over $3.5 million by promising to double investors' money in four months. The SEC has frozen their assets and stopped them from continuing their fraud.

Daniel Odulo was stopped from soliciting investors for a proposed eel farm. Odulo promised investors a "whopping 20% return," claiming that the investment was "low risk." When he was caught by the SEC, he consented to the court order stopping him from breaking the securities laws.

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Reduce the chance of Identity Theft:
1. Stop pre-approved credit card offers.
2. Add your phone and cell #’s to the Do Not Call list.
3. Shred your gas station receipts, store receipts, and ATM slips. Invest in a shredder if you need to - it is cheaper than the consequences of the theft of your ID.
4. Don’t leave mail in your un-locked mail box, overnight. Buy a locking mailbox.
5. Never provide your personal information over the phone.

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Phishing Scams:
If you receive an e-mail requesting personal information, stating your credit card is invalid, your credit card has been refused for a recent purchase, or your Internet service will be blocked, etc. Contact the company you bought the product from - if you bought anything. Don’t provide your information in an e-mail.

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