Pyramids

Often disguised as multi-level marketing opportunities or even charitable endeavors, pyramids require victims to go out and recruit a certain number of new participants in order to “rise up” the pyramid and collect their promised reward. In this way, pyramid schemes spread through families and communities, preying on the mutual trust people have in their friends, neighbors, and co-workers.

Limited Partnerships

These are investment vehicles in which investors purchase a share in a business venture such as drilling oil or gas wells, making
a movie, or developing a real estate project. While partnerships may be genuine investments, con artists can defraud investors by misrepresenting the risks and potential profits, or by manipulating the enterprise to drain off the revenues in “expenses.”

Pump-and-Dump Stock Scams

In this fraud, unscrupulous promoters obtain large blocks of stock in a small, publicly traded company. With high-pressure telephone sales, mass emails, and phony newsletters, the promoters use false rumors about the company’s prospects to drive up the stock price. When the
promoters dump their shares at a profit, the other investors are left holding worthless stock.

Ponzi Schemes

In a Ponzi, the con artist attracts investors by promising unrealistically high returns, and uses some of the money obtained from new victims to pay earlier participants some return. The scheme lasts only as long as the promoter can continue to lure in new victims.

Promissory Notes

Promissory notes can be a legitimate tool for businesses that need to borrow money for short periods. It’s not investment fraud as long as the borrower discloses all the risks, and provides you with the information you need to make an informed decision. It is fraud when backed by a nonexistent company, or promoted by promising high returns with little or no risk.

Global Bank Schemes

In these scams the promoter offers a ‘risk free’ opportunity to earn high returns by investing in exotic-sounding financial instruments traded in the global financial markets. The investment is often presented as a secret strategy shared only by very wealthy, sophisticated investors. In fact, the ‘major world bank’ may be no more than a fancy letterhead or a fake web page. Although the con artist may move the money overseas through foreign banks to cover his tracks, there is no real investment.

Affinity fraud is a crime. In recent years it has caused hundreds of honorable people to lose millions of dollars of their hard-earned money to individuals they believed could be trusted. “You can trust me” says the con artist, “because I’m like you. We share the same background and interests. And I can help you make money.”

The tight-knit structure of many religious, community, and social groups is a perfect environment for the con artist.

Beware of the use of names or testimonials from other group members
Scam artists frequently pay high returns to early investors with money generated from later investors. As a result, early investors might be wildly enthusiastic about a scheme that collapses once you’ve invested.

Get proof in writing
Obtain a prospectus or other form of written information that details the risks in the investment, as well as procedures for getting your money out.

Protect yourself
The New Mexico Securities Division strongly urges every New Mexican, particularly seniors, to investigate before they invest. Check out the investment opportunity and the person selling you the investment before you give them any of your money. Always ask for written information about investment opportunities and keep this information in your permanent records.

Ask for professional advice from a neutral outside expert
Consult with someone not in your group — an accountant, attorney, or financial planner – to evaluate the investment.

Contact the New Mexico Securities Division
Ask for information about the firm and the person selling the investment, including whether they’re registered. Any investment and the person selling the investment must both be registered with the New Mexico Securities Division. 1-800-704-5533 

Be wary of any investment that seems closely tied to a particular religious belief.

It makes little sense that an investment opportunity would be available only to members of a specific church or faith. Many religious scriptures warn of those who would exploit faith for personal enrichment.

Be cautious if the promoter of an investment opportunity tries to capitalize on connections or leadership within a religious group.

The success of the investment is unlikely to be linked to the promoter’s inside contacts. Exercise the same caution and skepticism that you would with any other investment.

Ignore claims that religion-based investments aren’t regulated.

Almost all investments, including church bonds, are regulated by state and federal securities or commodities laws.

Beware of a new member of your church who springs up out of nowhere with a sure-fire investment scheme.

Some con artists will waste no time ingratiating themselves within a religious circle. Find out about their background, if any, within the church.

Don’t give a break to a swindler who hides behind religion.

Don’t be victimized for a second time by letting an investment scammer off the hook. He might take the opportunity to take advantage of new victims elsewhere.

Identity theft is one of the fastest-growing crimes in the U.S. and around the world.

This form of fraud costs American businesses and consumers an estimated $400 million a year. The average victim spends about $1,400 in expenses and 600 hours in time to clear their name after personal financial information is stolen and misused.

The identity thief may loot your bank account, run up huge bills on your credit cards, obtain new credit cards in your name, or use your credit history to buy a car or borrow money from a bank. Using your Social Security number, a thief can even obtain a driver’s license or passport in your name and use those documents to commit other crimes that you could be blamed for.

Secure personal information at home.

Keep bank statements, credit card bills, tax returns and other financial records locked up where a thief is unlikely to find them.

Guard your mail and shred your trash.

Keep track of your monthly bank and credit card statements to make sure you receive them. Foil “dumpster divers” by shredding or burning financial info before discarding it.

Don’t give out confidential information over the phone.

No bank, mortgage lender, or government agency will call and ask you for your Social Security number, bank account number, PIN, or other private financial information. Be suspicious of anyone who does.

Clean out your wallet and purse.

Don’t carry PINs, checking account statements, Social Security card, or other confidential information with you.

Be wary online.

If you use your home computer to access the internet, install anti-virus and anti-spyware software and update it regularly. Don’t store confidential financial information on your computer hard drive.

Order a copy of your credit report.

At least once a year order a copy of your report from each of the three major credit rating agencies and review it carefully.

Learn More About Identity Theft 

Identity Theft Resource Center: https://www.idtheftcenter.org/

Federal Trade Commission: https://consumer.ftc.gov/features/identity-theft

• They steal your wallet or purse containing your driver’s license, credit and ATM cards, and other personal identification.
• They trick you into revealing information over the phone by impersonating government agents, law enforcement officers, bankers, or mortgage lenders.
• They pilfer your mail, including bank and credit card statements, pre-approved credit card offers, new checks, and tax returns.
• They file a bogus “change of address form” with the Post Office to divert your mail to another location.
• They rummage through your trash, or trash discarded by restaurants, stores, and other businesses, in search of personal data.
• They pose as a landlord, employer, or someone else with a legitimate need for the information to obtain your confidential credit report.
• They burglarize your home to steal cancelled checks, tax returns, credit card bills, and other personal files.
• They scam you over the internet by using email to lure you to a legitimate-looking but fake web page that pretends to be a bank, mortgage lender, or government agency site.
• They steal files out of offices where you’re a customer, employee, client, or patient, sometimes by bribing an employee, or by hacking into the company’s computers.
• They secretly plant spyware and other hidden software on your computer to copy files, track your internet use, or capture PINs and passwords stored on your computer.