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Tonya Papanikolas reporting The Utah Division of Securities wants to alert Utahns to the top investment scams of the new year. In 2007, Utah investors lost over $77-million in fraudulent schemes.
We hear a lot about what a great time this is to invest in real estate, but the Division of Securities says investors need to tread cautiously, watching out for real estate promissory note schemes.
Wayne Klein, the director of the Utah Division of Securities said, "Many times the investors expect their name will be on the title, and in fact, it isn't. All you have is a promise from someone else to pay you money."
People are also buying into a new scheme where companies claim they need investor money to fund a secret project for the Department of Homeland Security. "There's a certain mystique at being able to fund something that is involved with a secret government project," Klein said.
Investors should beware if someone claims to have a secret connection with European banks and says your money would be used to get a huge loan. "It's all a hoax. These people do not in fact have access to any pools of money," Klein warns.
Scammers are getting high-tech, loading programs on public computers to retrieve account information from people trading stocks. They've also learned how to appear more legitimate. One scheme involves copying legitimate government information to their own, fake websites.
Klein said, "It solicits people to file complaints about scams where they've lost money; and then these people say, ‘Well, here's a way you can earn your money back.'"
Fraud investigators say to avoid these kind of schemes, people need to make sure the person offering the investment is licensed and the stock offering is registered. And watch for red flags.
Klein says to be wary "any time someone uses certain phrases as 'guaranteed' or 'no risk' or 'I promise to double your money.'"
And if it sounds too good to be true, it probably is. The Division of Securities says the most common victim in these cases is an intelligent, married man who knows a lot about finances and believes he can spot a fraudulent deal; so oftentimes, he may not ask all the necessary questions.
