Tuesday, March 15, 2011

Be Wary of Investment Fraud Schemes

If It Sounds Too Good To Be True, It Most Likely Is

ORILLIA, Ontario, March 14, 2011 /Canada NewsWire/ - If you have been promised big returns for minimal investments, Ontario Provincial Police (OPP) suggest it may be the work of heartless fraud artists.

March is Fraud Prevention Month. There are many qualified professionals who can provide investment and financial advice and recommend suitable investments. Members of the OPP Anti-Rackets Branch know that many people seek out alternative investment products through a variety of investment schemes, often with international connections, that do not have your best interests at heart.

Many of these schemes lure victims by promising high rates of return. The perpetrators are usually vague about the details of where the money is invested. They may tell the potential investor that providing too much information may result in getting under-cut and loss of the investment opportunity. In fact, the investor's money is often not invested, and frequently moved to offshore banks which do not honour Canadian banking regulations or procedures. Usually, the money invested in these schemes is not recoverable.

"The harm that can be caused by perpetrators of fraud who prey upon vulnerable people is staggering. The money taken is often funnelled back into criminal organizations to fuel illegal activities, further victimizing the unsuspecting public." - Deputy Commissioner Scott TOD, OPP Investigations and Organized Crime.

A well-known example of fraudulent investments is known as a "Ponzi" scheme. Primary investors are paid exceptional dividends as "interest cheques" or sometimes cash. These unbelievably high returns are not, in fact, actual dividends, but come from the deposits of new investors as they come on board.

The perpetrators of Ponzi schemes can keep them going through a variety of ruses and attracting others until the perpetrator has either accumulated his target amount and flees with the profits, has lost the investors' money in other business ventures, or is incarcerated for similar crimes. These types of schemes can go on for several years before the investors realize that they have been defrauded.

"No one is immune to fraud. Common sense is your best protection. Always do your research, talk to others and never be rushed into making an investment decision. If someone is offering you an investment opportunity that sounds too good to be true, then it probably is." -- Detective Inspector Bernie Murphy, OPP Anti-Rackets Branch.

Investors should always exercise caution and carry out due diligence before making investment decisions. If someone is offering you more than the bank is willing to pay, then there is always a risk. The greater the dividend promised, the greater the risk.

FRAUD…Recognize it…Report it…Stop it.


OPP - March is Fraud Prevention Month

Canadian Anti-Fraud Centre (formerly Phonebusters) -

For more information on schemes involved with Investment Fraud, visit the Ministry of Government Services website at www.ontario.ca/consumerprotection

OPP www.opp.ca

Follow us on Twitter at: www.twitter.com/OPP_News

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