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  • James Robinson CFP

Investment Fraud

Updated: Jun 8, 2018


The FBI advises all citizens including the United States Armed Forces servicemembers and veterans that 'Investment Fraud' involves the illegal sale or purported sale of financial instruments. The typical investment fraud schemes are characterized by offers of low- or no-risk investments, guaranteed returns, overly-consistent returns, complex strategies, or unregistered securities.


Examples of investment fraud include:

  • Advance Fee Fraud

  • Ponzi Schemes

  • Pyramid Schemes

  • Market Manipulation Fraud

The above mentioned schemes often seek to victimize affinity groups, such as groups with a common religion or ethnicity. They utilize a group's common interests to build trust to effectively operate the investment fraud against them. The perpetrators range from professional investment advisers to persons trusted and interacted with daily, such as a neighbor or sports coach. Investors should use scrutiny and gather as much information as possible before entering into any new investment opportunities.


Seven Tips for Avoiding Investment Fraud:

  1. Don’t judge a person or company by their website. Flashy websites can be set up quickly and they move quickly to avoid prosecution.

  2. Don’t invest in anything you are not absolutely sure about. Do your homework on the investment and the company to ensure that they are legitimate.

  3. Check out regulatory websites regarding this person or company.

  4. Consumer Reports is a great place to start.

  5. Be cautious when responding to special investment offers, especially through unsolicited e-mail or regular mail.

  6. Be cautious when dealing with individuals/companies from outside your own country.

  7. Inquire about terms and conditions of investment before making purchase decision.


Scams and Fraud -(USA.gov)

With so many kinds of scams and fraud, it’s hard to figure out where to report each type. First, file a report with your local police department. You may also contact your state consumer protection office. You can also report certain types of scams and fraud to federal enforcement agencies. Federal agencies usually can’t act on your behalf, but they can use complaints to record patterns of abuse. This helps them take action against a company or industry. Contact these federal agencies based on the type of fraud:


Report Scams and Fraud

  • Common scams and fraud - Contact the Federal Trade Commission (FTC) or use the Online Complaint Assistant to report various types of fraud, including counterfeit checks, lottery or sweepstakes scams, and more.

  • Census fraud - Contact your regional office of the Census Bureau about scammers who pretend to collect your personal information for the government.

  • Food stamp (SNAP) fraud - File a report with the USDA’s Office of Inspector General about individuals or retailers committing fraud in using, selling, or accepting SNAP benefits.

  • Financial fraud including credit, loans, and mortgages - Contact the Consumer Financial Protection Bureau about problems with mortgages, credit and loan-related fraud including money transfers, student loans, credit reports, and other financial services.

  • Identity theft or data breaches - Report identity theft, when someone steals your personal information to apply for credit, file taxes, and commit other fraudulent acts, to IdentityTheft.gov. This service can also help you develop a recovery plan.

  • Immigration fraud - Report the illegal use of documents or illegal actions to get around U.S. immigration laws to U.S. Immigration and Customs Enforcement.

  • International scams - File a complaint about e-commerce (business or trade that takes place on the internet) or travel scams to econsumer.gov.

  • Internet fraud - Submit a complaint to the Internet Crime Complaint Center (IC3) about phishing or spoofing, when a scammer uses fake email, text messages, or copycat websites to try to steal your identity or personal information. You can also report malware, dangerous software designed to disable computers and computer systems, and other related issues to the IC3.

  • Investment fraud - Contact the Securities and Exchange Commission or your state's securities regulator about scams related to offers using fake claims to get someone to invest.

  • IRS and other government imposter scams - Report someone pretending to be from the IRS to the Treasury Inspector General for Tax Administration (TIGTA) or by calling 1-800-366-4484. File a complaint about other government imposter scams with the Federal Trade Commission.

  • Mail fraud - Contact the U.S. Postal Inspection Service about scams or deceptive ads delivered through postal mail, stolen mail, and other related fraud.

  • Medicaid fraud - File a Medicaid fraud complaint with your state's Medicaid program office. Use the Fraud and Abuse Reporting Directory (PDF, Download Adobe Reader) to find the contact information for your office.

  • Medicare fraud - File a report with the Department of Health and Human Services’ (HHS) Inspector General about scammers who try to get your personal information or Medicare number to steal your identity and commit Medicare fraud.

  • Misuse of federal funds - Contact the Government Accountability Office through their FraudNet form.

  • Moving fraud - To report a dishonest moving company within the same state, file a complaint with your state utility commission. For complaints about interstate moving services, file a report with the Federal Motor Carrier Safety Administration.

  • Social Security fraud - File a complaint with the Social Security Administration's Inspector General about alleged fraud, waste, or abuse.

  • Telephone Scams - Submit a complaint to the Federal Communications Commission about mysterious charges on your bill (cramming), an illegal switch of your service (slamming), or other unwanted calls including telemarketing.

  • Welfare (TANF) fraud - Contact your nearest welfare agency or call the HHS Inspector General at 1-800-HHS-TIPS (1-800-447-8477) to report program fraud or abuse.

For ACTIVE LINKS to the above mentioned Agencies websites, please go to: https://www.usa.gov/stop-scams-frauds