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seamusTX wrote:I would like to think that if someone offered me a 25% annual return on an investment, I would know better. But if you read interviews with people who fell for these schemes, you can see how they work. The scam artist initially gets some people into the scam who have credibility in the community and a large audience. Smaller-scale scam artists often put pastors into that role. That person then draws in other people who think he is acting in good faith (which he is, in his own mind).

Madoff succeeded by duping some well-known investment advisers and other prominent people.

- Jim

seamusTX wrote:This actually happened to someone that I know last week. Names have been changed to protect the innocent.

"Otis" asked his friend "Joe" to deposit a check to Joe's bank account and write checks to several other people. The amounts were in the thousands of dollars. Otis had a song and dance about why he didn't have a bank account, and he didn't want to pay the fees at a check-cashing place. Joe did what Otis asked.

This kind of transaction was repeated a couple of times.

Joe, much to his surprise, got a visit from the police, who arrested him for felony theft. Otis had been running a scam.

Now Joe has to hire a lawyer and try to prove that he did not know what was going on and he did not profit from these dealings.

I try to be prudent, cautious, paranoid, or whatever; but I never imagined this kind of hazard.

- Jim