Investment Fraud

Investment fraud involves the illegal sale or purported sale of financial instruments. The typical investment fraud schemes are characterized by offers of low- or no-risk investments, guaranteed returns, overly-consistent returns, complex strategies, or unregistered securities. Examples of investment fraud include advance fee fraud, Ponzi schemes, pyramid schemes, and market manipulation fraud.

These schemes often seek to victimize affinity groups—such as groups with a common religion or ethnicity—to utilize the common interests to build trust to effectively operate the investment fraud against them. The perpetrators range from professional investment advisers to persons trusted and interacted with daily, such as a neighbor or sports coach. The fraudster’s ability to foster trust makes these schemes so successful. Investors should use scrutiny and gather as much information as possible before entering into any new investment opportunities. Visit the FBI's White-Collar Crime webpage for additional information.

Tips for Avoiding Investment Fraud:

  • Don’t judge a person or company by their website; flashy websites can be set up quickly.
  • Don’t invest in anything you are not absolutely sure about. Do your homework on the investment and the company to ensure that they are legitimate.
  • Check out other websites regarding this person/company.
  • Be cautious when responding to special investment offers, especially through unsolicited e-mail.
  • Be cautious when dealing with individuals/companies from outside your own country.
  • Inquire about all the terms and conditions.