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Seven Indicted in Slick International Securities Scam


Graphic for Fighting Global Securities FraudToday, two pieces of common sense advice on those "tempting" investment deals.

1. From U.S. Attorney John Suthers, District of Colorado: "The best protection for potential investors is to understand that HIGH YIELDS and LOW RISK are NOT typically found in the same investment."

2. And from Denver FBI Special Agent in Charge Phillip Reid: "The investing public should be warned ... that if they are offered LONG-TERM FULLY PROTECTED INVESTMENTS ... promising UNBELIEVABLE RATES OF RETURN, ... be SUSPICIOUS."

These two law enforcement officials are adamant for a reason: last week, in their jurisdiction, seven individuals were charged with conducting a "gigantic" investment scam that defrauded more than 1,000 investors worldwide out of $56 million.

Just so you know what to beware, this is how the scheme worked:

  • Investors were promised monthly returns of up to 400 percent by companies with official sounding names like "Capital Holdings" and "Reserve Foundation Trust";
  • They were sent fake financial statements showing grossly inflated earnings; and
  • They were told their money was "safe" and insured from loss by high profile insurance companies and were given legal sounding documents to back it up.

It was a huge scam, and it took an equally mammoth effort to unravel the crime. Working hand-in-hand over the past several years, criminal justice professionals and investigators from the FBI, IRS, and the State of Colorado Securities Division:

  • Conducted more than 800 interviews;
  • Reviewed some 100,000 pages of documents;
  • Executed search warrants in four different states;
  • Called on the help of seven different countries, including authorities in Great Britain, Canada, New Zealand, Australia, and the West Indies island of St. Vincent; and
  • Seized 60 bank accounts, 8 NASCAR race cars, and $24 million in assets, including a castle in the Colorado mountains.

Final words of advice. Until we stop investigating cases like this, we can never say it often enough: "If it sounds too good to be true, it probably is."

Related links: Press Release | White Collar Crime page