How to Protect Yourself from Investment Fraud - WBAY

How to Protect Yourself from Investment Fraud

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How can you tell a legitimate investment opportunity from a scam? A father who was saving for his kids' education learned a valuable lesson.

"I really thought it was my ticket out of working four part time jobs, I really did."
 
Nathan Amsden spent years saving so he could start making modest investments to prepare for a college education for his children.
 
Then Nathan met Bill Orestis, who began laying the groundwork to lure Nathan into an investment scam.

"What they were saying is they wanted to put a pool of people together to pool all their money together so they can get into the market to trade the Euro," said Dan Forristal, U.S. Postal Inspector
 
Orestis was very persuasive and offered to put in his own money.
 
"'If I come up with 15, and you come up with 5, that will close the deal, and 'cause the market is going really crazy right now and I want in on this…' So he hooked me in. We closed that deal. I came up with $5,000, and he gave me a note, a personal note promising to pay me back," Amsden said as he described the fraud.

Orestis showed Nathan documentation illustrating what appeared to be the investment's track record.
 
"The victims would have a chance to look at what looked like real documentation from a website that is real, from a company, that actually traded the Euro, and it would look like there were profit margins when in fact, no money had been traded," said Forristal.

Meanwhile, the con artists continued to ask Nathan for more money.
 
"I was always adding small amounts of principle to an imaginary figure that was snowballing in value," Amsden said.

Nathan wasn't alone. Eighteen victims lost nearly $1.5 million in this scam.  

By the end, Nathan had invested $60,000.

"It was all I had, all I had saved up for the girls' education," said Amsden. "Life insurance policy, the college fund, everything in cash, everything in the checkbook. At that point, that was the end of our dealings because I had nothing left, he knew I had nothing left."
 
Postal inspectors say to remember one very important thing.
 
"The big thing we always see is 'no risk'," said Forristal. "The term investment, in general, implies risk. They go side by side. There is no investment you can make that doesn't have risk."

Orestis was sentenced to prison for the fraud.

Before you invest you'll want to do your own research.
     
You can check out brokers and investment advisors online at the U.S. Securities and Exchange Commission.  You can see whether they're registered or licensed and if they've had any disciplinary problems.  Just click this link: http://www.sec.gov/investor/brokers.htm

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