Michigan fraud case shows vulnerability of seniors to scams

On Behalf of | Nov 29, 2021 | Uncategorized |

Financial crimes are growing more prevalent in Michigan and across the nation and seniors are frequently the most victimized demographic. Securities fraud is problematic because is difficult to detect before it is too late. This goes beyond simple acts of theft and extends to making unsuitable recommendations, brokers making excessive trades without a client’s approval or knowledge, negligence, violating fiduciary duty, having a conflict of interest and more. If a person has lost money because of fraud or other unscrupulous behaviors by a person who is working as a financial professional or claims to be, it is imperative to know there are options to seek justice.

Michigan investment advisor arrested for defrauding elderly woman

A recent case involving an elderly woman who was scammed out of more than $300,000 is a prime example of the financial challenges older people face. The Securities and Exchange Commission (SEC) asserts that a 57-year-old man working as an investment advisor took the woman’s money and used it to pay for his own personal items and bills. The man had run his own unregistered firm and been affiliated with a registered firm in the state until February 2020. The previous four years were spent getting checks from the woman. He had his own management firm from 1992 to 2015 when he joined another company.

He oversaw the affairs of approximately 50 people for the new company, but was still running his own firm on the side. His new firm was unaware of this. The purported scam started in March 2016. The woman paid him checks that surpassed $305,000. He had told her he was investing the money so there would be increased value for her grandchildren. Instead, he lined his own pockets and paid his expenses. In addition, he is alleged to have overcharged her by $9,000 for financial services.

Steps seniors can take to avoid being victims of securities fraud

Since seniors are alluring victims for scammers, there are steps that can be taken beforehand to protect them. These include asking viable questions; doing research into the advisor; understanding all aspects of the investment – especially what can be lost; not being fooled by kindness or a sales pitch; being automatically skeptical no matter how good the offer sounds; taking time to be fully versed in what the investment entails; looking cautiously at unsolicited ideas from unknown individuals; keeping track of the investment after making it; feeling free to complain if there are problems; and knowing exactly where the money is and when it can be retrieved.

Obviously, there are warning signs that should be taken seriously. In the case of the woman who was allegedly scammed out of more than $300,000, the investment vehicles sounded too good to be true. In these circumstances, it is usually wise to hesitate. Guaranteed returns on an investment are generally anything but that. It is crucial to think about what is being offered, if it makes sense and to ask incisive questions about it. Having protection through loved ones, legal professionals and government entities can avoid losing money in these illegal schemes.

Seeking recovery after securities fraud may require experienced help

When illegal financial acts have taken place, one of the main strategies to recover what was lost is through securities litigation. There are many ways in which a financial advisor, stockbroker, money manager and others can manipulate clients and commit wrongdoing. To address this and have a chance to recover what was lost while making certain that the person does not have the chance to do this to others, it is wise to have legal advice from the outset. Consulting with those experienced in these types of cases can be essential.