ATTORNEY NEWSLETTER
California AG Alleges $1.3 Million Fraud
Charges Of Theft, Securities Fraud And Financial Elder Abuse
Six Victims Of Fraudulent Scheme
Largescale fraudulent investment schemes against elderly victims violate securities laws constitute financial elder abuse. See Cal. Corp. Code §§ 25401, 25540 and 25541 (fraud in securities offerings; Penal Code § 487 (grand theft); Penal Code § 368 (crime of financial elder abuse) and Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse). Unscrupulous financial advisors and investment promoters often tempt older investors with promises of high or “guaranteed” returns. Anxious seniors, living on fixed income and worried about inflation and soaring health care costs are susceptible to persons exploiting their anxiety with false promises of greater income. Sometimes the victims are convinced to liquidate all their retirement savings to invest in what’s being promoted, only to end up losing everything when the offered investment turns out to be worthless. Evans Law Firm, Inc. represents victims of financial elder abuse in San Francisco and throughout the State of California. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent Arraignment in Fraudulent Investment Scheme Case[1]
California Attorney General Rob Bonta has announced the indictment and arraignment of an investment promoter for allegedly running a fraudulent real estate investment scheme. As a result of the alleged 13-month scam, seven victims lost over $1.3 million, according to the AG’s office. An investigation by the California Department of Financial Protection and Innovation found that the defendant allegedly offered his private clients an opportunity to invest in various real estate projects. During this time, he allegedly presented himself as a successful investor and contractor, but failed to disclose to his victims facts that his investors had a right to know — including, that both he and the companies owned and run by him had gone bankrupt, that he had been successfully sued multiple times, that both the Internal Revenue Service and California Franchise Tax Board had issued liens against him for failure to pay taxes, and that his contractor’s license had expired in 2008. Instead of investing his victims’ funds according to the terms of the investment contracts, the defendant in many instances took his victims’ money and walked away from the projects, according to the complaint against him. The defendant also allegedly abandoned multiple projects, resulting in the foreclosure of those properties. As a result of his alleged fraud, the defendant’s seven victims lost $1,363,809.80.
Red Flags of Fraudulent Schemes
Here are some of the classic “red flags” of fraudulent investment schemes like the scheme in the reported case:
- High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly 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, or any investment that promises a “guaranteed” return or amount of income.
- Unregistered investments. Ponzi 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 Ponzi schemes involve unlicensed individuals or unregistered firms.
- Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme 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 financial elder abuse by an insurance agent, stock broker, investment advisor, promoter or other person in San Francisco or elsewhere in California contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</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.
