Your weekly ScamWatch
A roundup of alleged cons and iffy arrangements to watch out for.
Gym memberships -- Have you resolved to lose weight in 2011? If joining a gym is part of the plan, the Better Business Bureau has some advice to avoid unexpected expenses. Be sure to ask the gym whether your membership will renew automatically, how long your introductory rate will last and what happens if you move or the gym goes out of business, the BBB said in a recent bulletin. Before signing a contract, you should consider whether you’re feeling pressured to join, can afford the monthly dues and are getting everything in writing, the BBB said. “Regardless of how eager you are to start losing weight in the new year, take the time to do research before joining a gym and don’t give in to high-pressure sales pitches,” said Alison Southwick, a BBB spokeswoman.
For-profit colleges -- Enrollment at trade schools and Internet-based colleges has skyrocketed in recent years. These programs are not always a wise investment, the BBB said. When applying to a for-profit school, students should be wary of recruiters who use high-pressure sales tactics or guarantee jobs or future income or if the degree seems too easy to obtain, the BBB said in a news release. The BBB also suggested that students research whether the schools are accredited by the U.S. Department of Education and how their tuition compares with competitors'. One school charged $14,000 for a certification in massage therapy while a similar certification at a public college would have cost only $520, the BBB said.
Insider trading -- A registered investment advisor has pleaded guilty to conspiracy and securities fraud charges in connection with an insider-trading scheme. Alexei P. Koval admitted that he obtained inside information about mergers and acquisitions from a former investment banker at UBS and used the information to make profitable trades on involved companies, the FBI said in a news release. He then paid a portion of the profits to the investment banker, according to the FBI. Koval, 36, who kept residences in Chicago and Pasadena, pleaded guilty to three counts of securities fraud and one count of conspiracy. Combined, the charges carry a maximum sentence of 65 years in prison and more than $15 million in fines.
Author sentenced –- The author of a book about investing has been sentenced to 18 years in prison for stealing more than $4 million from dozens of investors in a scheme that lasted 10 years. William Arthur Sassman II used his book, “Secrets of a Worry Free Retirement,” to entice investors, many of them retirement age, to invest with him. He said he would use the money to purchase foreclosed properties and commercial real estate and to develop a laptop computer stand, but instead spent it on an extravagant lifestyle, the California Department of Justice said in a news release. Sassman, 42, charged more than $1 million on American Express cards and spent $300,000 on automobiles, including two Ferraris, the state officials said. As part of his sentence, Sassman was ordered to pay $4.45 million in restitution to 48 victims.