Fraud Stories: Victims and Cons

We've all heard it: "If it sounds too good to be true, it probably is." The trick is figuring out when "good" becomes "too good." Investment fraudsters make their living by making sure the deals they pitch appear both good and true.

Listen to these stories of investment fraud from the victims themselves—and from con artists who have swindled people out of their money. You’ll see that the cons used classic persuasion tactics in each of these cases to get their victims to fall for their schemes.

Understanding these tactics—and what puts you at risk—is your key to spotting and avoiding investment fraud.

IMAGE Fraud Story - Laura Astorga

Be Careful Who You Trust

Laura Astorga lost most of her savings to a Ponzi scheme aimed at the vast Hispanic community in Los Angeles. She wasn't the only victim of Juan Rangel. Rangel relied on his ethnic affinity to defraud hundreds of mostly Spanish-speaking victims through two fraud schemes. See how he lured his victims, and learn to spot the red flags of fraud.

IMAGE Fraud Story - Ruth Mitchell

Retirees Are Targets of Scams

Like many Americans, Ruth and Len Mitchell worked hard to save for their retirement—but they fell victim to a Ponzi scheme, losing $100,000. The fraudster was no stranger either. He was their accountant—someone they socialized with and trusted to handle their finances. How did he do it? Read their story or watch the video, and learn how you can avoid becoming a victim.

IMAGE Fraud Story - Greater Ministries International

Fraudsters Exploit Faith and Trust to Steal $580 Million

As an investor, you may be tempted by a seller's pitch to put your money into the next "hot" investment deal—especially if you hear your friends, family or fellow worshippers are buying it. Called "social consensus," fraudsters use this tactic to convince people it's safe to hand over their money. One shocking example was Greater Ministries International, a Florida-based Ponzi scheme. Learn how these fraudsters used religion to swindle innocent people out of their money.

IMAGE Fraud Story - The Three Hebrew Boys

Everyone Is Doing It, But You Don't Have To

Bonds between groups of people, like those in the military, are not easily broken. Unfortunately, it's these bonds that fraudsters sometimes exploit to get you to invest in a scam. Take the affinity fraud case of "The Three Hebrew Boys." These investment fraudsters preyed on the trust between military service members to con them out of millions of dollars. Read the story or watch the video, and learn how you can avoid affinity fraud.

IMAGE Fraud Story - Steve Sampler

Even Professional Investors May Not Spot a Fraud

Steve Sampler knew a thing or two about finance when he decided to invest in an oil well opportunity. He was a licensed stockbroker with years of experience and knew the ins and outs of investing. But the deal turned out to be a scam—and the $40,000 he invested vanished. How did Sampler fall for a phony investment scam? Hear his story.

IMAGE Fraud Story - Nevin Shapiro

A Wholesale Grocery Ponzi Scheme

Florida businessman Nevin Shapiro defrauded dozens of victims in a multi-million dollar Ponzi scheme. The investors believed they were investing in a wholesale grocery business—instead, investors were funding Shapiro’s extravagant lifestyle. Shapiro knew these people wanted to get rich quick, and he used that against them by promising phantom riches. Continue reading about his scheme and how not to let it happen to you.

IMAGE Fraud Story - Thompsons

How Social Pressure Cost One Family $30,000

When your friends recommend something to you, you tend to take their word for it. But when it comes to investment ideas, you shouldn't just rely on tips. Carolyn and Ray Thompson did just that—and they lost thousands in an investment scam. Before handing over your money to anyone, thoroughly research the investment and the person selling it. The Thompsons learned this lesson the hard way. Read their story.

IMAGE Fraud Story - Robert Kalinowski

Not Asking and Checking Cost One Investor $100,000

Protecting yourself from investment fraud can be as simple as asking if the seller and the investment are registered, and then verifying the answers with FINRA or the SEC. Unfortunately, for some people, like Robert Kalinowski's father, not doing these things can result in irreversible financial damage. Hear Kalinowski's story and plea to always "ask and check" before investing.

IMAGE Fraud Story - Jameson Kauhi

How "Phantom Riches" Cost $82,000

There are phantoms that lurk in every investment scam. Sometimes they take the form of big payoffs; other times they are the security of "guaranteed" returns. Known as "phantom riches," they are the most common tactics fraudsters use to scam investors. Jameson Kauhi was lured by one of these phantoms, and the only thing it led to was an empty bank account. Read Kauhi's story or watch the video and learn how to spot "phantom riches."

IMAGE Fraud Story - Church of Jesus Christ of Latter-Day Saints (LDS)

Faith Alone Should Not Decide Your Financial Security

The bonds of faith are strong, but when dealing with a matter such as your financial security, faith alone should not be a deciding factor. The Church of Jesus Christ of Latter-Day Saints in Utah is a close-knit, trusting community. For this reason, the area is a hotbed for affinity fraud—just ask Jim and Diane Smart, faithful church members and investment fraud victims. Read their story or watch the video and learn how to spot affinity fraud.

IMAGE Fraud Story - Beau Diamond

Don't Just Rely on Someone's Name

Beau Diamond lured investors with his social status and family name. Even smart, affluent professionals were caught in his $37 million Ponzi scheme. These investors learned the hard way not to rely on just someone’s name. Read his story or watch the video to see what red flags to look for when approached with an investment deal.