Financial Scam?

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tesseract
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Financial Scam?

Post by tesseract »

My mother-in-law has been dealing with an investor for the last few years. she put a lot of money (~80K) into an investment scheme. The guy is saying that he can't pull any of the money out, it's frozen because of the 9/11 attacks.

So now she's gotten 20K from somewhere else, and has given it to him. She's getting $800 a month back from him, the "earnings" on the 20K. I don't know squat about investing, so I don't know if any of this is reasonable.

I think the whole thing stinks
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swellman
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Post by swellman »

Smells like a Ponzi.

NYSE and other public traders have FAQ's on scams and frauds, as well as what Gov. agencies to ask if one suspects something fishy is going on.

I would suggest you or your wife investigate discretely, but quickly.

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Zombified
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Post by Zombified »

Yeah, it stinks all right. Frozen since 9/11? Unless she's investing in Hamas, I haven't heard of anything being frozen due to the 9/11 attacks.

There's a site called http://www.quatloos.com that seems to have a fair bit of information about various financial scams.

Good luck, hope it turns out all right.

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Thumbo
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Re: Financial Scam?

Post by Thumbo »

$800 per month on an investment of $20,000? That's a 48% rate of return.

If it seems to good to be true, it usually is.

tesseract
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Post by tesseract »

It's turning into a very sensitive issue. Any suggestion of mine that they should investigate more get everybody's back up. I've been told that "in our family, we know when to trust somebody". I pointed out that con men are succesful because they know how to make people trust them.

I'm going to contact my sister-in-law, she's extremely practical. If I can get her interested in at least checking this out, that might be acceptable by the family.

Thanks for the links.
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tesseract
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Post by tesseract »

I've been finding out some more about this. My Father in Law is actually working for these people. It turns out that his job is stuffing envelopes, and contacting family and friends to tell them about this wonderful opportunity. He's worked for them for a year and a half, so if it's a Ponzi, it's a long running one.

It's kinda scary. From what I can tell (his english is pretty non-existant, and my french is just OK), you get a loan on your REER (RRSP, Retirement Savings Plan), and then put it in an account AND GIVE THE GUY THE PIN NUMBER!!! I have no clue what these people are thinking. He takes the money, invests in whatever, (he mentioned currencies), and pays you monthly - cash if you want it.

You get 4% per month. hmmm... why not reinvest, and run it up to a few billion.

I asked him if there was any confidentiality agreement involved, and he said yes, he had to sign one. I'm not sure if all investors are expected to.

So my poor FIL is being suckered into scamming his friends and family, and will end up holding the bag. And if he can't prove that he was a dupe, he might get charged.

He's going to fax me the info, so I can look into investing myself. I'll post a translation when I get it. I asked for the registration number, or license of the guy who does the trading. My FIL seemed very surprised that I would want such a thing. Oh, and the guy "guarantees" that you'll make money. I asked what form the guarantee took (an interesting concept to get over in poor french), and it seem that the guy just promises to do what he says.

There's two lawyers in the firm, and I've asked for their names.

I've been trying to figure out how to check if the company actually exists, but I can't find a list of quebec companies anywhere that claims to be complete.

How do I prove to my FIL that it's a scam. How do I find out if it's a scam?
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Bearguin
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Post by Bearguin »

tesseract wrote: I've been trying to figure out how to check if the company actually exists, but I can't find a list of quebec companies anywhere that claims to be complete.

How do I prove to my FIL that it's a scam. How do I find out if it's a scam?

Oh oh. Quebec company? That rings huge alarms bells for me as I know a lot of scams tend to be run out of Montreal (I have no idea why). Illegal lottery ticket sales, office supply scams and a bunch of other scams show up in our papers as being run out of Montreal.

My suggestions is to send a copy of the information to the RCMP. Not toally on point, but try one of the links on this page

http://www.rcmp-grc.gc.ca/scams/tfraud_e.htm

You may also try the Ontario Securities Commission (our version of the SEC).

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DrMatt
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Post by DrMatt »

Just because The Family Buys It doesn't mean it's safe.
A distant cousin of mine tried to recruit me for an Amway Spinoff this autumn. His messages were barely literate, full of unwarranted assumptions about me, and the bottom line was that If I Had A Big Enough Dream, I could Earn A Million Dollars A Year In My Spare Time. I eventually had to block him from my mailbox on multiple addresses, and tried to warn other family members.
Having supplied others with the data--including a link to FTC's log of complaints against Amway et al.--I considered my job done. Some of my relatives may get taken in by this crap--I don't know.
Grayman wrote:If masturbation led to homosexuality you'd think by now I'd at least have better fashion sense.

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Vitnir
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Post by Vitnir »

If money is being sent upwards in a pyramid and promises much higher interest than you can normally expect it is safe to assume its a scheme IMO. The option you have is.
1. Burst their precious bubble and make them hate your guts for the next 20 years for being the bringer of bad news.
2. Leave it alone until they are dirt broke.
I dont see any other realistic option based on what you wrote.

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Grammatron
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Post by Grammatron »

DrMatt wrote:Just because The Family Buys It doesn't mean it's safe.
A distant cousin of mine tried to recruit me for an Amway Spinoff this autumn. His messages were barely literate, full of unwarranted assumptions about me, and the bottom line was that If I Had A Big Enough Dream, I could Earn A Million Dollars A Year In My Spare Time. I eventually had to block him from my mailbox on multiple addresses, and tried to warn other family members.
Having supplied others with the data--including a link to FTC's log of complaints against Amway et al.--I considered my job done. Some of my relatives may get taken in by this crap--I don't know.
A friend of mine recently tried to convince me to join this spinoff, their name is Quixtar. I had no knowledge of them but I picked up quickly it was BS since his explanation of the business consisted of hype phrases that say nothing but sound good. He tried to get me to come to their cult meeting because apperently he wasn't being successful enough at brainwashing me.

Here's a good link about them.

http://skepdic.com/amway.html

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Post by Loon »

tesseract wrote:He's worked for them for a year and a half, so if it's a Ponzi, it's a long running one.
That's not too difficult to do. I know of one that ran for at least five years and had its own offices and everything. I suppose it could turn out not to be a ponzi, but then why would the guy running it not try to evade life in prison?
I guess there he chose to err on the side of more votes. -[size=75]Grammatron[/size]

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swellman
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Post by swellman »

Bumped to see if this story had an ending, happy or otherwise.

Tesseract, you still here?