Fraud from abroad
Pyramid schemes. Advance-fee swindles. Religious-affinity-loan scams. Look what the Web dragged in.
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This African-based scam has taken to the Internet to reach a wider audience. "Any crook who doesn't use the Internet ought to be sued for malpractice," jokes Alabama's Borg. Not all online swindlers operate from abroad. His state is prosecuting a Phenix City, Ala., businessman who, working from a storefront with just computers and no other advertising, convinced 33,000 people from all 50 states and 32 foreign countries to send him $300 each in a loan program during a four-month period in 1999-2000.Skip to next paragraph
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The Alabama case was part of one of today's faster-growing swindles: religious affinities.
Hustlers will often direct their work toward members of a certain religion and tell them, for instance, that they have developed a loan program based upon Christian principles and are in need of seed money, or loans that promise quick and profitable repayment.
Officials in Florida are still trying to find much of the $500 million that the self-proclaimed Internet missionary church Greater Ministries International, of Tampa, Fla., swindled from people in what has been called a classic Ponzi scheme.
Its operatives have been given long prison terms for bilking some 27,000 victims worldwide; Amish and Mennonites of Pennsylvania were favorite targets.
Offshore investing is another popular way of extorting money. Here, the bad guys rely upon ignorance on behalf of the investors.
Ms. Baker of NASAA has a videotape of a crook telling victims that European checking accounts pay 20 percent interest per year.
Would-be investors should ask themselves: "How much do [I] know about the German banking system?" says Baker. "The common sense detectors should go off on that."
Unless they speak German or know which sources to talk with overseas, the average investor really can't easily check these claims, she adds. So a heaping dose of skepticism is needed.
Vaughn Nelson was offered promissory notes and insurance policies to entice him into prime-banking loans.
He got them, but they were phonies. And he admits that he should have done some more checking to ensure that both the security provider and the seller had registered with state securities commissions.
If you find the regulators in the dark about a deal, Nelson says, "don't [just] walk away from it. Turn your back and run."
SEC website alerts people to various investment scams including "prime banks" and Nigerian swindles. Site also provides advice on how to protect yourself.
National Association of Securities Dealers website is another good place to visit before opening your checkbook.
Florida Office of the Comptroller gives a good rundown on a number of scams.
A virtual encyclopedia on everything from money laundering to chain letters to telemarketing fraud.
www.scambusters.com Rundowns of the latest scams, such as this season's "tax audit" e-mail. It claims to be from the IRS and demands you give your Social Security and bank account numbers. (Sorry folks, the IRS already knows this information.)