ATTORNEY NEWSLETTER
How do dishonest investment advisors target seniors?
Seniors are often targets of various kinds of investment fraud or securities fraud including Ponzi schemes, where money collected from new investors is used to pay existing investors, and there really is no actual investment of funds. Like the infamous Bernie Madoff case, investment fraud schemes like Ponzi schemes can go on for years until they finally collapse or are detected by law enforcement or perceptive investors. Fraud doers cover their tracks with fake statements, and distributions which are in fact the invested money of other, newer investors.
Is investment fraud on seniors a type of financial elder abuse?
Yes. Fraudulent investment schemes violate securities laws and, when the victims are seniors, also constitute financial elder abuse and may involve other crimes, including federal and State prohibitions of securities fraud. See Penal Code § 368 and Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse). Evans Law Firm, Inc. can represent you if you lose money in investment fraud or securities fraud or financial elder abuse here in California. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
What is an example of investment fraud on elderly investors?[1]
An unlicensed “investment advisor” was sentenced last year to 75 months in prison for fraud in connection with his scheme to defraud investors, many of whom were elderly. “It is heartbreaking to read the victim statements describing how their lives have been dramatically altered – no retirement, no funds to care for disabled children, in one instance a victim’s home placed at risk of foreclosure,” said U.S. Attorney Nick Brown. “From the mid-1990s until 2021, [defendant] led his victims – mostly friends and family members — to believe that he was successfully investing their funds for retirement. He sent fake statements showing significant gains. In truth, since at least 2013, the investment fund was insolvent and losing value, and [defendant] took more than $1 million in fees for his own benefit.” As the financial picture worsened, defendant allegedly paid off earlier investors with money from new investors –a classic Ponzi scheme. Speaking in court today, one elderly victim said defendant is a “pathological liar.” Another wrote to the court “He is a con, nothing more than that in my eyes.” A 91-year-old victim wrote “He needs to be held accountable for the many lives he has shattered.”
What are some red flags of fraudulent investment schemes to watch out for?
- High returns with little or no risk. Be especially suspicious of any “guaranteed” investment opportunity.
- Overly consistent/guaranteed returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.
- Unregistered investments. Fraudulent investment schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company’s management, products, services, and finances.
- Unlicensed sellers. Federal and state securities laws require investment professionals and firms to be licensed or registered. Most fraudulent investment schemes involve unlicensed individuals or unregistered firms.
- Issues with paperwork. Account statement errors may be a sign that funds are not being invested as promised.
- Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Greedy promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.
Contact Us
If you or a loved one has been the victim of investment fraud or securities fraud or financial elder abuse in California contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:[email protected]”>[email protected]</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).
[1] Evans Law Firm, Inc. was not involved in the case in any way. The case was reported on in a newspaper article.
