The Top Scams Targeting Seniors

Seniors investors over the age of 50 control over 70 percent of the wealth in the United States. Because of this and the perception that senior investors can be taken advantage of, many scammers often target them. Below is a list of some of the most common schemes targeting senior investors, and what to look out for.

1. Medicare/Insurance Fraud

Every citizen or permanent resident over 65 is eligible for Medicare. Perpetrators often pose as Medicare representatives or establish bogus businesses to bill Medicare and pocket the money.

2. Telemarketing

Telemarketing has proven to be one of the more common scams, due to the fact that the elderly make twice as many purchases over the phone than the national average. With no face-to-face interaction and no paper trail, it can be fairly difficult to trace some of these scams. Successful scammers might pretend to be a friend of a relative “in need” of money, asking the victim to wire or send money – others will pretend to represent a fake charity to defraud you of your money.

3. Investment Schemes

With so many planning for retirement, investment scams are typically in the form of a Ponzi-style arrangement, promising significant rates of return.

Call a Los Angeles Fraud Lawyer Today

Don’t be embarrassed; if you believe you or someone you know has been the victim of one of these schemes, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles fraud lawyer today for a consultation.

Protecting Your Savings From Investment Fraud

When planning for retirement, saving up to live comfortably after you stop working cannot be overstated. Investing your money with an eye toward growing your nest egg is always prudent, if done safely. Below are some tips to consider to help you avoid investment fraud:

 Be Wary of Undue Pressure to Buy a Security

Some con artists will try to force you into making an immediate decision. Do not act rashly when making a decision involving your money.

Monitor Your Investment and Remain in Charge

Do not hesitate to ask tough questions about an investment and to stay on top of how your investment is performing. Insist on written reports on a regular basis, and be wary of anyone pressuring you to turn over full control of your account. 

Don’t Let Embarrassment Cloud Your Judgment

Con artists know you might hesitate in reporting a scam because you are embarrassed. Every day that passes is another day that someone else can be victimized or another day the scammer is allowed to operate. And as time passes the scammer could hide your money offshore or spend it.

Beware of “Reload” Schemes

After discovery of a scam or a failed scheme, some con artists will promise to “make good” on a follow-up investment. Do not make a bad problem worse by doubling up with the same person who lost your money the first time.

Call a Los Angeles Investment Fraud Attorney Today

If you believe you have fallen victim to a con artist’s scheme, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment fraud attorney today for a consultation regarding your rights.

How to Recognize a Bad Financial Advisor

Most investment brokers are honest, hard working individuals, but there are a few bad apples who give the rest a bad rap. Certain brokers may commit intentional fraud while others just don’t do their job very well. Knowing how to identify a bad financial advisor can make the difference between a sound investment strategy and suffering major losses. Here are some tips to follow in order to avoid problem advisors:

Check Brokers’ History

Advisors are divided into stockbrokers or Registered Investment Advisors, depending on their fee structure. The Financial Industry Regulatory Authority (FINRA) has a “Broker Check” tool to see if your advisor or potential advisor has a checkered past.

Ensure the Use of a Clearinghouse

Most brokers use a third-party institution to hold money and report issues regularly about the performance of your investment. Some institutions take care of their own reporting, but third-party clearinghouses can minimize the possibility of fraud. One of the most famous Ponzi schemers in history, Bernard Madoff, did not use a clearinghouse.

Pay Attention to Your Advisor’s Style and Advice

Your advisor should provide advice based on your own risk profile, which should be thoroughly discussed before any investment is made. Do they push you toward certain investments outside of your comfort zone, or make transactions just to generate commissions? These can be potential warning signs, even if your broker has a perfectly clean record.

Call a Los Angeles Investment Fraud Attorney Today

If you believe your advisor may have committed fraud with your investment, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment fraud attorney today for a consultation regarding your rights.

How to Spot and Avoid Elder Financial Abuse

Elder financial abuse is the illegal or improper use of an older person’s funds or property for any reason other than what would benefit the owner. This type of financial abuse can involve a broad spectrum of misconduct, including recommending unsuitably risky investments or forgery, deception, or coercion to get an older person to sign a deed, will or power of attorney.

Who Should You Look Out For?

Perpetrators can be someone close to the victim, such as a child or grandchild – even a spouse. The family member may feel they have a “right” to their older relative’s assets. Predatory individuals do not have to be a family member, but they will share certain common characteristics, such as expressing their care and concern for the older person. Some predators aim for employment in fields that put them in close contact with elderly investors, such as stockbrokers or financial advisors.

How Do You Know if You or a Loved One Has Been a Victim?

There are several indicators that you or a loved one may be the victim of elder abuse, including:

• Dramatic investment losses in a brokerage account
• Unexplained bank account withdrawals or transfers (real estate, financial, etc.)
• Legal documents, including powers of attorney that give someone else control over an older person’s assets
• Suspicious signatures on checks or other documents

Call a Los Angeles Fraud Attorney Today

If you or someone you know has been the victim of elder abuse, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles fraud attorney today for a consultation regarding your rights.

 

Turkish Bond Scheme Shuttered in California and Chicago

The FBI has charged three men with fraudulently obtaining more than $28 million from approximately 120 investors through estate planning seminars aimed primarily at retirees in Illinois and California.

Robert Pribilski (currently deceased), John Burns, and Mahmut Durmaz of Los Angeles (currently a fugitive) conducted seminars to convince wealthy seniors to invest their money with them, selling purported promissory notes for investments in Turkish bonds. Instead, the accused fraudsters used investor funds to speculate in real estate ventures that have failed, to pay themselves, along with friends and family members, and to pay “investment returns” to other investors.

According to the indictment, the defendants operated their scheme between 2005 and 2010, selling promissory notes offering rates of return between 4.75 and 11 percent annually. Durmaz operated the scheme, using funds from later investors to pay supposed “investment returns” to earlier investors without disclosing that no Turkish bonds had been purchased. All three defendants misrepresented to investors that they had several years of investment banking experience involving Turkish bonds and that they had personally profited from Turkish bond investments.

Call a Los Angeles Investment Fraud Attorney Today

If you or someone you know invested with Pribilski, Burns or Durmaz and suffered losses as a result, you may have certain legal rights available to you. Contact an experienced Los Angeles investment fraud attorney today for a consultation regarding your rights.

 

Three Indicted in $1.5 Billion Investment Fraud Scheme

Authorities are on the hunt for the former executive of a Las Vegas-based investment company and two of his Japanese associates who have been charged with running a $1.5 billion Ponzi scheme. Edwin Fujinaga of Las Vegas, and his associates Junzo Suzuki and Paul Suzuki, of Tokyo, were indicted on eight counts of mail fraud and nine counts of wire fraud through MRI International Inc.

According to the indictment, the men allegedly defrauded thousands of unsuspecting Japanese investors. Victims were told that their money was being held and managed by an escrow agent in Nevada. But the three accused actually used investors’ money to pay for gambling, travel and other personal expenses.

Investors bought in through the company’s service center in Tokyo, and were promised a significant rate of return and low risk through a method known as “factoring.” The company was supposed to purchase accounts receivable at a discount from medical providers and then attempt to collect on the accounts receivable in amounts greater than what was paid for the receivables. Later investors’ money was used to pay supposed “investment returns” to earlier investors.

Call a Los Angeles Investment Fraud Lawyer Today

If you or someone you know invested with Fujinaga or the Suzuki’s and suffered losses as a result, you may have certain legal rights available to you. Contact an experienced Los Angeles investment fraud lawyer today for a consultation regarding your rights.

FINRA Issues New Investor Alert for “Smart Betas”

In an effort to educate investors about financial products – particularly exchange-traded funds (ETFs) – FINRA has published a new Investor Alert called “Smart Beta – What You Need to Know.” The alert is linked to and tracks the performance of alternatively weighted indices, commonly referred to as “smart beta” indices.

A smart beta index takes an alternative approach to more popular indices by weighting the index with a non-market-capitalization-based measure, such as earnings or volatility. The S&P 500, by contrast, uses a company’s market capitalization to determine how much weight a particular stock will have in the index, and the Dow Jones uses price weighting.

It is important to remember that just as with any investment, smart beta indices offer certain advantages and risks. FINRA’s new tool offers investors an overview of smart betas, ranging from products that track equal-weighted indices to products linked to fundamentally weighted indices, in which the index components are determined based on a companies’ revenues, dividends, or other financial metrics.

The alert gives users six “smart” questions before investing in a product linked to a smart beta index. These questions will ask about the strategy, cost, advantages, risks, liquidity, and performance of the index.

Call a Los Angeles Investment Attorney Today

Investing in ETFs is a complicated process, and you should educate yourself beforehand. If you have suffered ETF losses, you may have certain legal rights available to you. Contact an experienced Los Angeles investment attorney today for a consultation regarding your rights.

 

SEC to Receive $40 Million to Settle Mutual Fund Probe

Mutual fund company First Eagle Investment Management agreed to pay the SEC $40 million to settle claims that it had misused investors’ mutual fund assets to pay for marketing and distribution costs. The settlement is the first of its kind filed under an SEC initiative designed to protect mutual fund investors from this type of activity.

An investigation revealed that First Eagle and one of its subsidiaries passed certain marketing and distribution costs to its investors, causing shareholders to pay $25 million – costs that should have been paid for by First Eagle. In addition to the $25 million, First Eagle agreed to pay interest as well as an additional $12.5 million penalty.

The case stems from a rule requiring mutual fund advisers to use their own resources to cover certain marketing and distribution costs. Prior approval is necessary if advisers wish to use investors’ fund assets instead, which was not done in this instance.

Call a Los Angeles Mutual Fund Attorney Today

If you believe your mutual fund advisers have been inappropriately using fund money, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles mutual fund attorney today for a consultation regarding your rights.

Wild Price Swings Indicate Potential Risks of ETFs

The stock market took a dramatic turn on Aug. 24 when the Dow Jones Industrial Average dropped nearly 1,100 points in a matter of minutes. According to several monitoring agencies, it appears that ETFs played a large role in that day’s swing.

ETFs, or exchange-traded funds, are securities that purportedly track an index, commodity, bond or combination of assets, like a mutual fund. Unlike a mutual fund, however, ETFs trade similarly to common stock on a stock exchange.

Although designed to mimic an index and remain relatively stable, ETFs became an even riskier investment on Aug. 24. On that day, failure to properly price stocks led to confusion and volatility in ETF valuations, causing the market to have its worst day since the “Flash Crash” of 2010. As a result of this, new rules kicked in to pause trading of the plunging stocks, however it only seemed to make matters worse. Many ETFs lost more than 50 percent of their value, only to rebound throughout the day and end up with slight losses or even reported gains.

Even though ETFs were designed to be low-cost, efficient ways for investors to diversify their portfolios, they are providing some investors and market trackers pause, and for good reason: of the $631 billion that changed hands on Aug. 24, ETFs accounted for roughly 40 percent of the trading volume.

Call a Los Angeles Stockbroker Attorney Today

If you invested in an ETF and have suffered losses as a result, or if your broker has provided you with false or misleading information about an investment, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker attorney today for a consultation regarding your rights.

UBS To Pay $34 Million Over Puerto Rico Bond Funds

The SEC has fined UBS’s Puerto Rico brokerage firm $34 million for failing to supervise a UBS Puerto Rico broker Jose Ramirez Jr., who allegedly misled investors into borrowing money to buy UBS’s risky, closed-end Puerto Rico bond funds.

Along with FINRA, the SEC brought charges against Ramirez Jr., accusing him of duping investors into using lines of credit to buy up nearly $50 million in closed-end bond funds that went belly up in 2013.

UBS’s policy and customer agreements prohibited the use of the loan proceeds to buy the UBS bond funds. Ramirez allegedly tried to circumvent the UBS policy by having customers transfer the money to unaffiliated third parties, waiting and then using the money to purchase the UBS bond funds. UBS fired Ramirez in 2014.

UBS has agreed to pay $15 million in disgorgement, along with interest and penalties. FINRA has also fined UBS Puerto Rico an additional $7.5 million over its alleged supervisory failures, and ordered an additional $11 million be paid to the 165 customers who suffered losses on the fund sold to them by Ramirez.

Call a Los Angeles Investment Attorney Today

If you invested in and lost money in UBS Puerto Rico bond funds, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment attorney today for a consultation regarding your rights.