Wow ~ Investment Scams Aren’t Leaving Utah in 2011 ...

personal note from kel ~ The iraqi dinar is mentioned in this article as one of the potential scams. I would like to say that I disagree with the author's viewpoint about Iraq's currency being "the scam" .. but .. I do agree that those who are invested are being taken advantage of. Scam artists are promoting other things related to the investment .. such as: investment opportunities, or asking people to pay for information that is otherwise free.

FBI Arrests Dallas Man on Wire Fraud and Mail Fraud Charges ...

also related ~ http://iggyboo.com/3rdStreetScam.html

December 31, 2010

Investment scams aren’t leaving Utah in 2011

Affinity fraud popped into the vocabularies — and pocketbooks — of more Utahns in 2010, and the scourge looks to remain a huge problem in the new year, state regulators say.

The fraud, in which a con artist targets fellow members of a group who share like interests and often emotional ties, is No. 1 on the Utah Division of Securities Top 10 Investment Alerts for 2011.

In Utah, members of The Church of Jesus Christ of Latter-day Saints have been caught in multimillion-dollar Ponzi schemes and other forms of fraud conducted by fellow church-goers. Deaf people, the Vietnamese, military families and co-workers also have been targeted.

"Affinity fraud would be on the top of my list for the past several years, and I imagine it will be on the top of the list next year, as well," said Keith Woodwell, director of the Utah Division of Securities, which enforces state investment laws. "That’s because it is the overwhelming theme in most of the complaints that come into our office. Whatever the scam is, whatever the investment offer is or the can’t-miss deal, generally the way we see those scams marketed in this state is through affinity fraud."

To be sure, that type of fraud wasn’t the state’s only problem. Last year, the Utah Securities Fraud Task Force, made up of local, state and federal agencies, said it was investigating cases that involved $1.4 billion and 4,400 people. The FBI also recently put the Salt Lake City office in its top five Ponzi hot spots nationwide, in company with Los Angeles, New York, Dallas and San Francisco, which have much larger populations.

"A lot of what we see is affinity fraud-based," said James Malpede, the special agent in charge of the white-collar crime unit at the FBI’s Utah office. "So it’s going to be an ethnic population, ties to a particular church, or some other relationship."

The state’s Top 10 list also includes a new scam that has surfaced and roped in a number of military families, Woodwell said.

The pitch from Utah-based entities involves investing in Iraqi currency, the dinar, with potential buyers told they can earn as much as a 1,000 percent return when the currency appreciates in value, sometimes because they claim a U.N. or World Bank program will revalue it.

"It’s frequently targeted to military families," said Woodwell, "Particularly men and women who have served in Iraq have been victims of this scam."

Utahns who bite are actually getting dinars delivered to their home, he said. The problem is the victims are paying way above market value, and the currency is not freely convertible, meaning it can’t be easily traded for dollars.

"Even if you can convert your dinars, you’re not going to get anywhere near what you paid for them," Woodwell said.

Also on the list are structured investment products, which are complex investments that can be linked to stock indexes, currencies or bonds. They commonly promise protection of your principal, but are backed only by brokerage houses such as Lehman Brothers, which went out of business in 2009 and made those guarantees worthless, Woodwell said.

"Investors need to be a little bit wary when approached with a thing like this and find out first the costs and fees and commissions you’re paying that tend to be higher on these products," he said. "When you’re told your principal is protected, you need to look hard and see what that really means."

One other alert concerns companies pitching investment pools that purchase nonperforming loans or distressed properties, claiming there are big profits to be made in collecting on the loans or in fixing up and selling the properties.

"There’s a reason those loans are nonperforming," Woodwell said. "In many cases, there’s no demand, there’s no market to sell the property, even if you do fix it up."

In releasing the list, Francine Giani, executive director of the Utah Department of Commerce, asked Utahns "to add financial resolutions to their New Year’s lists."

http://www.sltrib.com/sltrib/money/50960272-79/fraud-investment-utah-state.html.csp

Link to different source Officials warn of financial pitfalls: Department of Commerce releases list of investment warnings (different source)