ATTORNEY NEWSLETTER
The Securities and Exchange Commission recently issued an investor alert to inform investors about a type of investment scam. Affinity fraud is a form of investment scam that targets members of identifiable groups. The groups targeted could be religious, elderly, ethnic, or any other group that shares common characteristics. California securities and whistleblower attorneys remind the public to consult with a registered financial planner before investing.
Affinity fraud schemes typically involve an investment where the scammer lies about crucial details, or where the entire investment is fictitious. Ponzi and pyramid schemes can be affinity frauds. In these types of schemes, money paid to the promoter of the scam is given to earlier investors to create the illusion that the investment is providing returns. Once there are no more new investors to be found, the money source is expended and the scam collapses. Typically, after the money runs out and there are no more new investors to dupe, the perpetrator of the fraud disappears. California securities and whistleblower attorneys get calls about these kinds of fraud on a regular basis.
With Affinity fraud scams the perpetrators are members of the group that they are trying to defraud, or they pretend to be. The group targeted for the fraud could be an ethnic or immigrant group, a racial minority, a religious group, members of the military, or any group with common characteristics. Those who commit affinity fraud will target any group they think they can get to trust them. The fraudsters take advantage of the trust and friendship that exists in groups that share common traits. Those who commit affinity fraud utilize a number of methods to gain the trust of group members. One typical way that fraudsters do this is by convincing trusted leaders of the group to help them spread the word about the scam. Usually these leaders are unaware that the investment opportunity is a fraud. Groups that are targeted in affinity fraud schemes often neglect to inform authorities or pursue legal action. Many times they will try to work things out within the group. California securities and whistleblower attorneys want to hear from those who may have been victims of affinity fraud.
Evans Law Firm, Inc. handles Qui Tam (whistleblower/false claims), IRS tax fraud, securities fraud, consumer fraud class actions, insurance and banking fraud, consumer product liability, elder abuse, retaliation and employment, and personal injury cases. If you think that you have witnessed or are the victim of financial fraud by an insurance company, bank or individual then, contact Evans Law Firm, Inc. at (415) 441-8669 for a free and confidential consultation, or email info@evanslaw.com.
