Going Undercover to Bust an Investment Scam - WBAY

Target 2 Consumer Alert

Going Undercover to Bust an Investment Scam

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You hear about them all the time, investment schemes that cost drain victims of their life savings.

Now, we're getting a look at what it takes to catch the masterminds behind these scams.

U.S. Postal Inspectors went uncover to bust a scheme run by Kalin Dao. She ran a scam that cost more than 500 investors at least $7 million.

"She offered a number programs, either penny stock type investments, or investments in commodities, precious metals, things like that," said Robert Strande, U.S. Postal Inspector.

Postal inspectors invested in Dao's company to learn more about her business.

"She gladly took my money, sent me regular updates, investment statements categorizing how my investment was doing," said Strande.

Those documents were all fake.

Strande traveled to Las Vegas to attend an investors meeting with Dao and brought a hidden camera. He spoke with her about the transparency of her records:

Strande: "As far as reviewing the books, how, where are you located as far as doing that or sitting down and having a one on one meeting."
 

Kalin:  "Yeah, we, we can have one on one meeting.  That no problem.  But, it have to be member."
 
Strande: "Okay."
 
Kalin:   "You're not a member right now.  Ah, I can't disclose that information to you."

 
Strande: "Okay. Well, that's what I don't quite understand as far as bringing on new investors, but, you're not disclosing a lot of information to the new investors."
 
Kalin:  "We not bringing on new investor.  That what we trying to tell you."
 
Strande:  "But, I mean, if you were, I mean, how, how do you source of investors if you're not putting out information?"

Strande says there's an important takeaway here for every potential investor.

"Don't accept answers like 'This is a private company, you're not entitled to look at the financials, I don't have to show you the financial records.' Don't accept answers like that."

Strande also said another potential red flag was the presentation Dao gave to the group.

"She provided a PowerPoint presentation to the entire investment group and it looked as though a second-grader had done the art work."

Postal inspectors say victims were devastated.

"It completely wiped them out financially. Most of them did not have disposable income," said Strande.

Postal inspectors say Dao used the money to finance her lavish gambling trips to Las Vegas.

She pleaded guilty and is serving a 12-year prison sentence. She was also ordered to pay $7 million in restitution.

For more information on investments and scams, click here for the U.S. Postal Inspector web site.

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