Investment Schemes
Websites, emails, and/or bulletin boards used to solicit investors into bogus
investment programs or businesses.
Investment Schemes have a wide variety of details in their operation and their
claims. Criminals can be very creative in developing these scams. Some revolve
around exotic, international financial instruments that are "usually only
offered to the elite". Others are more mundane. Most offer incredible returns,
such as 100% annual rate, guaranteed. Such high returns are offered primarily
to entice victims to participate without asking a lot of questions. People are
often willing to suspend their disbelief if they believe they will receive a
fantastic payout.
Some schemes are styled after the "Ponzi scheme" which takes its name
from Charles Ponzi, who in the early 1920s conned tens of thousands out of nearly
$10 million. In a Ponzi scheme, early investors actually make a return, being
paid with the investments of the later participants. The early participants
are thus more willing to sink even more money into the scheme and to entice
their friends, relatives, & acquaintances to participate in the "Investment
Program". After a significant number of investors have joined the program,
the scammer disappears with the money.
To protect yourself, be sure to approach all investment opportunities with a
dose of healthy skepticism. Ask yourself why a total stranger would be offering
this plan to you. Also, remember that if it sounds too good to be true, it probably
is. Do not be blinded by dreams of untold wealth. Conduct research concerning
the opportunity and verify for yourself that the plan is reasonable and attainable.