LAS VEGAS (KSNV MyNews3) -- The president of an investment firm is behind bars after lying to investors and stealing nearly $8 million. In tonight's Rip-Off Alert, there is information for all consumers on how to avoid getting caught up in a Ponzi scheme.
Postal inspectors say dozens of investors were duped by an investment firm that tricked them into believing they were funding development projects.
The problem -- the deals didn't exist.
"He took the clients that he built up over 25 years and started selling fictitious loans and overselling loans,” said U.S. Postal Inspector Amy Kerkoff.
Instead, the president of the firm used the money to pay off other investors whose money he had already stolen -- a typical Ponzi scheme.
"He had a fleet of cars for his business. He spent a month in Hawaii with 20 family and friends and footed the bill for that, and he sponsored hydroplane races," she said.
Postal inspectors say some victims were left with nothing.
"Ultimately, they have lost everything,” she said. “They've lost their life savings and retirement. Many of them are older and will have a hard time recovering those funds."
Inspectors say there were red flags such as important paperwork that was never received.
"They get too comfortable and didn't follow up,” Kerkoff said. “Do your homework and make sure you get everything linked to your investment."
Often, one of the first signs of a Ponzi scheme is the promise of unusually high returns. Keep in mind, con artists can fake the paper work. Research is key. Check out the actual investment to make sure it's real.
