Scam Watch: Cars and investment fraud
Investment advice -– In his new book, “The Vigilant Investor,” former Securities and Exchange Commission attorney Pat Huddleston offers a list of tips to help investors avoid Ponzi schemes and other scams. Among them:
-- Check with state regulators to make sure the salesperson is properly licensed. If the person is not licensed, it’s probably a fraud.
-- Check federal court records (available for a fee through www.pacer.gov) to see if your investment broker has been sued or criminally prosecuted.
-- Don’t be blinded by celebrity power. Avoid investing with people who like to drop names.
-- Avoid high-pressure sales pitches. Anyone who pressures you to invest does not have your best interests in mind.
Fake website -– Kelley Blue Book, which provides information on new and used cars, is warning online car buyers to be wary of a scam utilizing a website that uses its name without authorization. The Irvine company warned that the website solicits funds from car buyers by offering an escrow-based buyer-protection program that Kelley Blue Book does not offer. Buyers are told to wire payments to a third party, which absconds with the victims’ money, Kelley Blue Book said in a news release. The company said it is working to have the website removed. In the meantime, car buyers should be aware that Kelley Blue Book does not offer such a service.
Ponzi scheme -– A man who operated a Ponzi scheme that targeted Korean Americans throughout California has been sentenced to more than six years in prison. Euirang “Chris” Hwang had pleaded guilty in 2010 to charges that he collected about $8.5 million from 65 victims through a company called Pinupito in Irvine. He promised investors returns of up to 45% per year, saying he made huge profits by buying and selling small companies in Korea. But rather than using the money for such purposes, he used it to pay returns to early investors and on personal expenses, including leasing expensive cars, the U.S. attorney’s office said in a news release. In addition to the prison sentence, Hwang was ordered to pay more than $7 million in restitution to victims.
-- Stuart Pfeifer
Photo: The 2008 Honda Accord was one of the most-searched used cars on Kelley Blue Book's website. Credit: Honda