LAS VEGAS (KSNV MyNews3.com) — It had all the markings of a scam: the promise of astronomical returns on an investment, without any losses.
But in this Rip-Off Alert from San Francisco, a large group of investors trusted it was all true because the ringleader was family.
Robert Hollins says one of his friends lured him in into a foreign currency investment opportunity that promised generous returns.
“The pitch I got was because it was foreign exchange, they could make money regardless if the dollar went up or down,” Hollins said.
The two men running the investment promised returns as high as 20 percent or 25 percent, and investors saw that to be true in their monthly reports.
“You get a false sense of security when you are getting monthly statements showing earnings,” Hollins said. “I should have realized that there were no months with losses; that should have been an absolute red flag.”
The problem was that those notes — the monthly reports along with the investments themselves — were part of a fraudulent scheme. The victims – 50 of them who lost more than $1 million — were all friends and family of the ringleaders.
“They were not only hit financially — many of them lost their life savings — but they were also hurt by the fact that they were taken in by someone who meant so much to them,” said U.S. Postal Inspector Jason Crowe.
“I defended him with vigor until it finally dawned on me it was a scam,” Hollins said. “I just couldn’t believe it because I trusted him and I trusted what he told me, because he hadn’t given me any reason not to trust him.”
“They lost homes, they lost businesses and they lost the opportunity to have the retirement they planned on having,” Crowe said.
Postal inspectors say consumers must research all investments. Hollins says he already has a new approach.
“I am invested with some big-name companies, and I personally think it’s a much safer route than dealing with individuals,” he said.
Both suspects in this case were charged with conspiring to commit fraud charges and are spending 2 to 3 years in federal prison.