Is it a Money Trap?

Date : June 17, 2008

Dear Valued Reader,

Occasionally, when two and two doesn’t equal four, we ask a client, “Is there anything we should know about you or your assets that you have not told us?” It is a genuine question on our behalf to determine what we can and cannot do from a legal standpoint. We also must determine if there is any chance of liability lingering from a person’s past.

Recently, we have had quite a few phone calls from people wanting to know if we could set up trusts for money that people were expecting. On the surface, that sounds reasonable. Our next question is, “Where is the money coming from?” This seems to be where the answers go haywire.

Not everyone in a scam is a scammer. Often many of the people in the scam are believers. Somewhere along the line, there is a creator, “the con” and often the others either need or want to believe that “too good to be true” is only true 99 percent of the time and that they are the exception holding the winning lottery ticket. To exemplify our point we acquired a true story testimonial for you who want to know, “Are High Yield Investment Programs Real”?

Here is an excerpt from a true story from a person we will now call Lynn. Lynn’s story is not unique, and it is not the only one that I have personally verified. This is the tip of the iceberg in the scam and only touches on the many forms that continue to morph as I write.

A note from Lynn

It was back in 1997 when the Internet just came out and no one really knew where it was going to go. Everywhere you looked it was said that the Internet was going to change the way we communicated and networked. It was global access for the first time.

I found an Internet site for matching funding, investments and business financing. After some emails, I found a new network. They all called themselves “intermediaries.” I was not sure why they were not brokers. Their response was either A) their work was overseas so they did not need to be brokers or B) they represented private transactions that did not require licenses and sometimes I got A and B.

In any event, they had all sorts of deals and investments: MTNs, bank debentures, table top closings, currency deals, gold deals, Morgenthau Bonds, Railroad Bonds, gold deals, diamond and ruby deals, Chinese construction bonds, bonds from the Bank of China, the lost Marcos fortune, trades with the Sultan of Brunei, extravagant paintings from artists such as Picasso and Monet and finally to the granddaddy, the High Yield Investment.

I was sucked in. I went with a person’s investment to enter a secret trade in London. Well, the program was canceled, and I went to another investment program, and then another and every time I went to a different hotel. I asked, “Why are we going to a hotel?” The answer, “Because it is illegal for banks to deal with other banks in investment transactions.” Then I heard the whole story about the Brentwood conferences and the secret meetings for rebuilding Europe after WW II.

After the dry spell of zero success, I was sent off to Paris to meet a real trader. I was told about the Grand Master and how only seven people in the world could trade on these High Yield Investment Programs. This trader actually traded for a Grand Master (boy was I lucky). That seemed more than impressive. I gave him the money waiting for my astronomical returns of 1000 percent in a year. The reason the investment was so high was that these investments were always attached to philanthropy or humanitarian projects.

When the money did not come into my account, I tried everything. I tried a diamond and ruby deal from an exclusive mine in Africa with the De Beers family, I went to the Rothschild office in Switzerland with bonds from the Vatican (they were confirmed by a bank and were secret). I went to London to meet an attorney from Seattle who had Morgenthau Bonds. I met with an X-Central Banker from Yugoslavia who introduced me to no less than fifty currency deals, Iraqi dinars, Kuwaiti dinars, Italian lira and you name it, I was a full-blown intermediary. Not one deal was less than 500M. One day I was in a New York hotel to meet a trader and a Chinese man came up to me and said, “Are you here for the trade?” I thought he knew who I was and I said “yes.” He pulled out a bank draft for 3M, right in the lobby.

I went to a lady named Carolyn Minkus who was supposed to be the only trader allowed to trade in the US for Citibank. I took a gentleman to her Park Avenue apartment and he gave her a 1M-dollar bank draft. Carolyn Minkus was arrested for maintaining a bank balance of over 27M of investor’s money and living off the interest while she ran this trading scam. She got something like 13 years. All of this to get the money back that I put into a High Yield Investment for an investor.

So what did I get? Scammed, that’s what I got! You know what I got for the scam? I got four years in federal prison, a ruined life, financially and emotionally, and a long road to recovery. Who could ever believe my story? Did I get anything positive? I did get something positive out of all this. I learned all of the standard lessons about losing everything.

I traveled the world looking for the real deal and the answer to the question. I found the answer (and I didn’t get a movie deal).

Sincerely,
Lynn
(Name alias to protect the innocent)

What are we to glean from our victim Lynn?

First and foremost, people involved in these deals will tell you that “our writer Lynn” just did it wrong and therefore got in trouble.

Without question, these investment scams are some of the most brazen, in your face, financial games I have witnessed to date. A perfectly written docu-drama set up to separate you from your money.

Most of the calls I receive that reference this type of scam, are from very thoughtful, very smart, well intentioned people who believe that they are going to receive a large sum of money right here, right now.

Unfortunately, for you, the perpetrators of these scams have wrestled with the savviest of investors, and as such have a well-rehearsed diatribe of FAQ’s that sound awfully convincing. For example, their paperwork in and of itself looks so good, you would think you are dealing with a very highbrow government agency. Their pitch is undeniably filled with reason, care and common sense. Having said that, isn’t that the very definition of a scam?

All of the greatest investment scams in history are crafted with the human condition “greed” being the centerpiece to the story. It’s as though the scam resembles a perfect Italian Operatic tragedy with ‘you the human” on center stage.

One fellow I know lost all of his money in the same type of scam our writer details, and still believes that the scam is a real business transaction, ten years later.

WHAT TO DO IF YOU ARE SOMEHOW INVOLVED WITH A SCAM?

Seek advice from attorneys and advisors outside the focus of the scam.

Consider that “a good story does not make it a true story.”

In essence, just because you can do it, does not mean that you should do it!

Here is the answer to the question; Do High Yield Investment Programs really exist?” Believing in something does not make it happen.

Answer, stick with the golden rules of life and you will be well on your way to avoiding a possible financial meltdown.

If it sounds too good to be true……need I go on?

Until next time,

John

ABOUT THIS EDITOR:

John Dietz is a strategic advisor at Trustmakers.com with a passion for client solutions that can encompass your business, your real estate, and your personal assets. Mr. Dietz serves to educate you on the latest in asset protection planning.

Full Bio - Email John