Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

Scam Watch: Investments, seniors, credit cards

October 2, 2011 |  4:25 am

Here is a roundup of alleged cons, frauds and schemes to watch out for.

Investment fraud –- A Fresno man has been indicted on mail and wire fraud charges related to an investment scheme that raised more than $2.9 million from victims. Janamjot “Jimmy” Sodhi is accused of defrauding investors from 2005 to 2011 through his company, Elite Financial Inc., federal prosecutors said. Sodhi told investors that he would use their money to purchase stocks, bonds and other investment instruments but instead used it for personal expenses and to pay returns to early investors, federal prosecutors said. Further, prosecutors said, Sodhi was not licensed by the state to make such investments and failed to inform clients that he was barred from the New York Stock Exchange in 2006.

Scams against seniors –- The Better Business Bureau said that older U.S. residents continue to be targets of scams. A survey by Investor Protection Trust in 2010 estimated that 20% of U.S. residents older than 65 have been victims of financial scams. The schemes include bereavement scams, in which people whose spouses just died are contacted and told that that they must pay their deceased spouses’ outstanding debts that did not exist. Other popular scams are work-at-home opportunities in which people are instructed to pay a fee to receive an opportunity to work from home or lottery scams in which they’re told they need to pay taxes upfront before they can receive a nonexistent lottery prize.  The Better Business Bureau cautions seniors never to pay for a job and never to wire money to people they do not know.

Small businesses –- The Federal Trade Commission is mailing refunds to about 100 small-business owners across the U.S. who were defrauded by companies that said they could reduce their expenses for processing credit card transactions. The FTC had accused several companies, including Merchant Processing Inc., Direct Merchant Processing Inc. and Vequity Financial Group Inc., of failing to disclose fees, concealed in pages of fine print, to their customers. Under a settlement the FTC reached with the companies, about $345,000 is being returned to merchants, the FTC said. Refunds will range from about $100 to more than $25,000, the FTC said.


Reports of boom-era mortgage fraud on rise

Federal prosecutors call Full Tilt Poker 'a global Ponzi scheme'

Barry Minkow heads back to prison

 -- Stuart Pfeifer