Old and not secure

Congrats, but you are in risk. The risk of losing your life, your money and your love-ones.

You need to keep fighting, it does not end until it ends.

Five Red Flags of Investment Fraud

Promises of High Returns with Little or No Risk.  The promise of a high rate of return, with little or no risk, is a classic warning sign of investment fraud.  Every investment carries some degree of risk, and the potential for greater returns generally comes with greater risk.  Avoid putting money into “can’t miss” investment opportunities or those promising “guaranteed returns.”  Remember – if it sounds too good to be true, it probably is.

Unregistered Persons.  Always check whether the person offering to sell you an investment is registered and licensed, even if you know him or her personally.  Unregistered/unlicensed persons who sell securities perpetrate many of the securities frauds that target older investors.  Researching the background of the individuals and firms selling you investments, including their registration/license status and disciplinary history, is free:

  • Search the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck online database.

Red Flags in the Financial Professional’s Background.  Even if an investment professional is in good standing with his or her regulators, you should be aware of potential red flags in the professional’s background.  SEC, FINRA, and state securities regulator records can be used to identify red flags for potential problems, including: (1) employment at firms that have been expelled from the securities industry; (2) personal bankruptcy; (3) termination; (4) being subject to internal review by an employer; (5) a high number of customer complaints; (6) failed industry qualification examinations; (7) federal tax liens; and (8) repeatedly moving firms.

Pressure to Buy Quickly.  No reputable investment professional should push you to make an immediate decision about an investment, or tell you that you’ve got to “act now.”  If someone pressures you to decide on an investment without giving you ample time to do your research, walk away.

Free Meals.  Be wary of “free lunch” seminars.  The ultimate goal of free meal investment seminars is typically to lure new clients and to sell investment products, not to educate the public.  If you decide to attend one, commit to yourself before the seminar that you won’t purchase anything or open an account while at the seminar.  Even if the free meal does not come with a high-pressured sales pitch, you should expect the “hard sell” in subsequent contacts from the person selling the investment.

The Australians “fax” scammers

How did scammers make money in 2017? well, according to ACCC’s report more than 200,000 scam reports were submitted to the ACCC, Australian Cybercrime Online Reporting Network (ACORN) and other federal and state-based government agencies in 2017. Total losses reported were $340 million – a $40 million increase compared to 2016.

Moreover, investment scams topped the losses at $64 million, an increase of more than 8 per cent. Dating and romance scams caused the second greatest losses at $42 million.

The report demographics:

  • The age range with the highest reported losses was the 55–64 range which reported losses of $21.6 million.
  • Where gender was provided, women reported more scams but lost less money than men. Women reported 85,495 scams and reported losses of $37.9 million. Men reported 72,282 scams and reported losses of $51.3 million.
  • Women reported losing most to dating and romance scams with $12.7 million in losses, while men were most affected by investment scams, reporting losses of $22.8 million.
  • In 2017, Indigenous consumers reported $1.6 million in losses (across 1,810 reports). This represents a 12 per cent increase over the $1.4 million reported losses (across 1,499 reports) in 2016.

Contact methods:

  • The top two contact methods used by scammers in 2017 were phone (40 per cent) and emails (31 per cent). Phone-based scam reports numbered 65,097 with $29.1 million in reported losses. Email-based scam reports numbered 50,635 with $17.4 million in reported losses.
  • Phone call and text message-based scams increased in 2017 by 14,227 reports, but email-based scams decreased by 3,433 reports.
  • Phishing and identity theft scams were the most prevalent of phone-based scams with 20,220 reports but investment scams conducted over the phone resulted in the highest reported losses of $17 million.
  • When combined, online-based contact methods (those delivered via email, social media, mobile apps and the internet) amounted to 68,351 reports (representing 42 per cent of all reports) and $49.9 million in reported losses.
  • Reports about scams where contact was made via ‘social networking/online forums’ numbered 4,711 in 2017 with $15.7 million in reported losses.
  • Fax-based scams still occurred even in 2017 but only represented 0.1 per cent of reported scams. These scams are usually targeted at businesses.

The fax punch line is amazing. Please find attached a link for the full report.

Background Checks on Investor.gov

The Securities and Exchange Commission unveiled a public service announcement (PSA) to encourage investors to check the background of their investment professional by using the free search tool on Investor.gov before investing. Investor.gov, the SEC’s website dedicated to individual investors, provides investors with tools and resources to help them invest wisely and avoid fraud.

The PSA’s storyline involves a couple seeking advice from an alleged investment professional who turns out to be a fraud.  At first, the investment professional seems genuine, but as the conversation continues his fraudulent scheme quickly unravels. He uses high-pressure sales tactics – typically a red flag of fraud – to persuade the couple to invest, with statements such as:

  • You are definitely getting in at the perfect time
  • This investment opportunity will not last long
  • I can guarantee that your money will double
  • There’s absolutely no risk to you
  • You Just Made a BIG Mistake!
  • This is Your LAST CHANCE to Join The XXXXXXX and secure your financial future
  • Let Me Show You How to Make Cash LIVE Right Now
  • Ride The Wave of XXXXXXX And you could earn up to XXXXXXXXX In Exactly 24 Hours
  • Book the Profit NOW!
  • The opportunities to make money are enormous
  • The XXXXXXX Investment Jackpot Could Generate Massive Fortunes by XXXXXXXXX
  • you’ll receive XXXX of our hottest trades, targeting fast gains, using a variety of proven trading strategies to help you chase money-doubling or money-tripling profits.
  • Are you ready to rake in gains like 279%, 169%, or even 393% in just a matter of days?

The PSA stresses that most fraudsters are not this easy to spot and encourages investors to visit Investor.gov before investing.

It will not help you to get your money back, but it may save you from losing more.

People may try to use your lack of knowledge, try to surprise them, if you succeed it will be amazing.

Additional stories worth reading

Please find below few stories worth reading (Chicago, Ill. introducing broker Fortune Trading Group, Inc, Telegram ICO, pump-and-dump classic story and the latest from Information Commissioner Office):

  1. NFA permanently bars Chicago, Ill. introducing broker Fortune Trading Group, Inc. from membership, bars its principal and associated person Jonathan Schuler from membership for five years, and orders Chicago, Ill. futures commission merchant Ironbeam, Inc. to pay a $100,000 fine – if you will read the full story (please find attached a link), you will understand that even if regulated entity promise you large profits, you should be skeptical. Moreover, if someone offers you large profits without mentioning the other scenarios, just stay away from the offer. Simple as that!!!
  2. Fake Website Scam Targets Aspiring Telegram ICO Investors – it is important to be aware that some fraudsters are using the Telegram ICO hypes to make quick profits.
  3. What is pump-and-dump? well, the attached story will provide an answer (it is a classic pump-and-dump case). You should really be careful with those Microcap Stocks trading. Microcap Stocks can be easily maneuver, and statscally they are more exposed to pump-and-dump schemes.
  4. ICO is also UK Information Commissioner Office initials. You should know that you can report about nuisance calls or any other issues related to your Data Protection.
    You can review their Enforcement action on the attached link, and more about them in general in the attached link.
    Please find an example for their latest Enforcement action:
    Firm previously fined for making nuisance calls is prosecuted for continuing to break the law:
    Direct Choice Home Improvements Limited had been fined £50,000 by the ICO in 2016 and was also issued with a formal Enforcement Notice, ordering it to cease contacting people registered with the Telephone Preference Service.
    It continued to make unsolicited marketing calls, however, and so was prosecuted under the ICO’s criminal enforcement powers.

Insider trading, FBI, Coincheck, Bitconnect, OneCoin, Tether

Six important stories:

  1. Please play fair. Insider trading will always be caught. Please find attached an example for an insider trading litigation case. Just stay away from it.
  2. The FBI need your help. Please review the below:
    If you have received any previous communications about your investments with Banc de Binary from someone claiming to be from a government agency, please fill out the questionnaire attached. Based on the answers you provide, the FBI or the SEC may wish to contact you to find out more about what happened.
  3. According to cointelegraph.com, Japanese cryptocurrency exchange Coincheck, one of the largest in the country, was the victim of a massive hack resulting in a loss of $534 mln. Please find attached a link for the full story. Exchanges must be regulated by a security commission, there is no other way.
  4. According to cointelegraph.com, Former BitConnect investors have filed a class action lawsuit, seeking compensation from the company that was found out to be a ponzi scheme and has shut down on Jan. 17, 2018. Please find attached a link for the full story.
  5. According to cointelegraph.com, OneCoin offices were raided and its servers seized in Sofia, Bulgaria, as yet another step in a series of international raids and court cases against the highly-controversial altcoin. Although the servers were shut down, OneCoin currently remains operational. Please find attached a link for the full story. If you want to avoid ponzi scheme, please search your entity at behindmlm.com/ (the people of behindmlm, are doing good service for the public).
  6. Tether is an unregulated cryptocurrency token that was issued on the Bitcoin blockchain. Although no audits are publicly available, according to Tether Limited, each unit of Tether is backed by one United States dollar held in reserve by Tether Limited, and may be redeemed through the Tether Platform. Please note that some people think it is a ponzi scheme. Please find attached an example for a very important economist who think it is a ponzi scheme (link).

Western Union, Cold-calling, IOTA wallet, bitFlyer, Benebit ICO, My Big Coin and Bitcoin Money Laundering

Seven interesting stories:

  1. Victims Scammed Via Western Union May Get Refund – If you need to get a refund, please visit ACCC website for more details. You will have to fill out a form and send documents, but it might be worth trying.
  2. Cold-calling – we need to continue to report those unwanted calls. In the UK a company director was disqualified (can’t run or be involved in the management of another company). The company he managed made unsolicited calls for direct marketing purposes. Please find attached a link for the full press release.
  3. If you are dealing with IOTA , please do not use online seed generators. According to some news outlets around $4m worth of IOTA were stolen, therefore, it is advisable to review the attached reddit post.
  4. bitFlyer EUROPE S.A. Obtains Payment Institution Licence and Launches Service in Europe. Please find attached a link for the full press release. It is a good sign for EU cryptocurrency users, since now they are more protected.
    According to the press release, in addition to the above, bitFlyer was registered as a virtual currency exchange by the Japan Financial Services Agency in September 2017, and bitFlyer USA is licensed to operate in 42 states as of November 2017.
  5. According to bitcoin.com, Benebit ICO has pulled an exit scam, making off with a reported $2.7 million of investor funds. Please find attached a link for the full story.
  6. CFTC Charges Randall Crater, Mark Gillespie, and My Big Coin Pay, Inc. with Fraud and Misappropriation in Ongoing Virtual Currency Scam. Defendants allegedly solicited more than $6 million for investments in a virtual currency known as “My Big Coin”. According to the press release “My Big Coin” is a Ponzi scheme.
    Please find attached a link for the full story.
  7. New Study Finds Patterns in Money Laundering through Bitcoin. It is the first public domain analysis of how illicit digital currency is laundered around the globe.
    According to the article attached, Bitcoin gambling sites, “mixers” and European Bitcoin exchange may be the destinations of choice for criminals looking to launder bitcoins.

Some ponzi stories you should keep in mind

Please bear in mind the following ponzi scheme stories. Those stories are a lesson for all of us:

SEC Charges Operators of $1.2 Billion Ponzi Scheme Targeting Main Street Investors. According to the SEC complaint, Woodbridge advertised its primary business as issuing loans to supposed third-party commercial property owners paying Woodbridge 11-15 percent annual interest for “hard money,” short-term financing. In return, Woodbridge allegedly promised to pay investors 5-10 percent interest annually.

The SEC complaint alleges that Shapiro and Woodbridge used investors’ money to pay other investors, and paid $64.5 million in commissions to sales agents who pitched the investments as “low risk” and “conservative.” Shapiro, is alleged to have diverted at least $21 million for his own benefit. According to the complaint, the scheme collapsed in typical Ponzi fashion in early December.

Investment Adviser Charged with Running Ponzi Scheme. The SEC alleges that Stephen C. Peters, through his investment adviser firm VisionQuest Wealth Management, sold promissory notes issued by another one of his companies, VisionQuest Capital, to clients and other prospective investors while making false statements, including that proceeds would be invested into revenue-producing businesses with neither Peters nor his businesses receiving compensation. Peters allegedly claimed that the VisionQuest Capital notes presented little or no risk of loss and were “guaranteed.”

According to the SEC’s complaint, investor funds were not used as Peters claimed. Peters allegedly spent at least $4.4 million on such personal endeavors. Peters also spent at least $4.9 million to make Ponzi payments to earlier investors.

Prosecutors bust multimillion dollar cryptocurrency scam. According to Korean news source Yonhap, Prosecutors said Wednesday they have uncovered a multimillion-dollar fraud scheme, by a cryptocurrency mining agency based South Korea and in the United States, that has incurred huge losses for investors around the world.

 

The suspects stand accused of pocketing some 250 million USD from 18,000 investors in 54 countries.

The suspects allegedly lured clients into investing in their cryptocurrency mining tools, which produced ethereum, by promising higher returns.

The suspects deceived investors, by manipulating the mining results, to look as if they were digging more Ethereum, using the computer program it developed. Their scam collapsed as they could not make enough returns from cryptocurrency mining.

Prosecutors believe the company spent around 69 million USD to buy the miners, and the rest was used by the management personally or to reward top performers. They suspect the executives have hidden about 93 million USD of the investment in offshore bank accounts.

Texas State Securities Board has obtained an emergency cease-and-desist order against a company they say is unlawfully pitching bitcoin mining investment products in the state. 

The Securities Board said that the company claimed to offer steady, daily returns – a structure reminiscent of high-yield investment plans that boast steady gains. Further, the solicitations reportedly encourage prospective investors to find others to buy in so that they can make money from “referrals. By promising such investment plans, the respondents are making offers containing statements that are materially misleading or otherwise likely to device the public.

Retrieving funds from unregulated brokers, online frauds and legal breaches by merchants

If you are receiving emails or calls about getting back your lost funds from unregulated brokers, online frauds and legal breaches by merchants, just stay away from it. You may be fraud victim once again.

Please ask yourself, how did they get your details. It may be the same people who defrauded you at the first time.

Websites such as www.payback-ltd.com, www.winchargeback.com, may do more bad than good, and it may be another scam.

If you want to try such services do not give them your credit card details. Moreover, do not sign their contract, online contract, send your approval via email and so forth, without reading and understanding. Again, please do not give them your credit card details.

Make sure no one is rushing you to a”perfect deal”, since “they have a special price for new clients”, “special promotion for the holidays” etc.

You are better than those sales tactics. Fraudsters may managed to fool you at the first time, but now you have learned.

If you want to try without any assistance, first, please call your credit card company, and ask what can be done (please note, it is valid only if you used your credit card). Second, check who are the entities you dealt with (it may be written in the website’s terms and conditions, contact us page, or on the website’s disclaimer). Once you know the from where is the entity, you should submit an official complaint.

Example 1: you found that the entity is from the British Virgin Islands, you may submit an official complaint at BVIFSC.

Example 2: you found that the entity is from the Cayman Islands, you may submit an official complaint at CIMA.

In addition, if you can check who are the shareholders and the company’s directors, it might be useful. If you can contact the shareholders and the company’s directors in person it might be fruitful.

The above mentioned might not be helpful, but it is worth trying.

Please find attached a related warning published by the UK National Fraud Intelligence Bureau (NFIB), victims who been defrauded and paid scammers by Western Union are being warned to watch out for fraud recovery fraud after a multimillion-dollar settlement in the US.

 

 

Please remember that If it Sounds Too Good to Be True, it Probably Is – CFTC case study

According to the Court Orders (please find attached), the Court finds that the Defendants engaged in a systematic pattern of materially false statements and omissions in connection with the marketing of SchoolofTrade.com (SoT) trading strategies and systems.

Specifically, the Court finds that Defendants: 1) touted the profitability of SoT’s trading strategies and systems and claimed hundreds of thousands of trading profits earned every year when, in fact, none of Defendants’ accounts has ever been profitable; 2) falsely represented to customers and prospective customers that the Defendant was a successful professional trader with years of experience and numerous awards when, in fact, the Defendant has little experience, has never been professionally recognized, and has never been a profitable trader; and 3) purported to make profitable trades in live accounts in real time in SoT’s “Live Trade Room” when, in fact, none of the trades called or profits claimed to have been made in the “Live Trade Room” can be found in any of Defendants’ accounts. Additionally, the Court found that Defendants failed to prominently display in their various solicitation materials certain disclosure statements required under CFTC Regulations concerning simulated or hypothetical trading results and client testimonials.

It is advisable to use register financial adviser, if things goes wrong, he/she may have professional liability insurance, and you may be able to get back your money.

In SchoolofTrade.com case, it is not clear how much money the victims will get back (if any), since the wrongdoers may not have sufficient funds or assets.

 

The UK Insolvency Service shut down binary options service company

Some binary options websites were using UK’s companies in order to process credit card transactions and bank transfers.

According to the latest publication (please find attached), Metro Options Limited who provided services to www.metrooptions.com was shut down by the UK’s Insolvency Service.

The website and Metro Options Limited, by its sales representatives, offered the opportunity to conduct binary options trading. The website made various investment return claims, none of which were founded, including:

  • profits of £400 per £500 trade were achievable
  • Metro Options Limited would match customer deposits and that a bonus scheme existed
  • trading insurances of between 50% and 100% would be provided
  • Metro Options Limited had more than 600 retail clients
  • Metro Options Limited was awaiting a licence renewal from the Cyprus Securities and Exchange Commission
  • Metro Options Limited operated a one-off refund policy for losses incurred in a 90 day period

Those customers who contacted the police, via Action Fraud, complained that they were unable to obtain any refunds of deposits or supposed investment returns, and that the company effectively ceased to communicate with them after requests for refunds or investment returns were made. Those parties reported losses of £350,000.

Metro Options Limited also falsely claimed to have had an established trading presence at its Canary Wharf registered office, at 5 Harbour Exchange Square, London, E14 9GE. In fact the company had never had any registered office presence at that location.

Metro Options Limited director, Mr. Miklos Attila, could not be traced by the investigators.

Conclusion, it is advisable not to invest via unregulated entities or regulated entities from unfamiliar jurisdiction (UK, US, Australia, Germany, France etc = familiar jurisdictions). However, if you decide otherwise, in order to avoid sad-ending, you should preform some Know Your Broker checks. You should, at least and not limited, ask the sale representative to send you his/her passport copy and utility bill in English, and/or, get a signed letter from the Company’s director + the Company documents (you should know who are the company’s owners and directors) + the director and owners passport copies + utility bills in English. The letter should state that the director and the owners will be held accountable if misleading information will be provided.