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Investor Fraud Schemes Swindle Americans of $20 Billion
A staggering rise in investment fraud schemes has left thousands of Americans reeling, with the FBI reporting losses topping $20 billion since 2011. The scammers, who used a variety of tactics and schemes, often guaranteed high returns and provided falsified investment documents to their victims.
According to the Justice Department, approximately 800 defendants have been charged, tried, pleaded or sentenced in approximately 500 federal prosecutions involving investor fraud since 2011. The victims, who ranged from retirees to military survivors, lost retirement savings, family death settlements, and money set aside for college tuition and mortgage payments.
At the forefront of the investigation is Attorney General Eric Holder, who said, “Investor fraud crimes can erode faith in our financial markets, threaten our nation’s ongoing economic recovery, and undermine the fabric of our communities.” To combat this growing problem, the Financial Fraud Enforcement Task Force’s Securities and Commodities Fraud Working Group, along with the FBI, Securities and Exchange Commission (SEC), and other agencies, is holding investor fraud summits across the country.
The summits, which kicked off in Stamford, Conn., Nashville, Tenn., San Francisco, Denver, Cleveland, and Miami, will provide consumers with information to protect their hard-earned money from fraud. “Whether a cold-call, polished website, or email solicitation, fraudsters will use every means at their disposal to convince investors to part with their money,” said SEC Director of Enforcement Robert Khuzami. “That is why investor education is so critical — in maintaining financial health as much as physical health, an ounce of prevention is worth a pound of cure.”
One defendant, who was sentenced to up to 50 years in prison, exemplifies the severity of these crimes. The SEC, a partner agency of the Financial Fraud Enforcement Task Force, has charged 887 individuals and entities in 359 actions involving retail investor fraud since 2011, with nearly $9.7 billion alleged to have been lost by over 1.2 million investors.
In an unprecedented event, the Victims’ Rights Committee of the Financial Fraud Enforcement Task Force will host an event in partnership with the Justice Department, the Certified Financial Planner Board, and the Foundation for Financial Planning to offer free financial consulting services to 8,000 victims of a Chicago-based investment fraud scheme. The defendant, who falsely guaranteed high rates of return in a Ponzi scheme, caused the loss of more than $300 million of investors’ funds, leaving many retirees with irreparable damage to their families.
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Key Facts
- State: Federal
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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