If It Sounds Too Good To Be True....

How many times have you heard about “fraud”? Has it happened to you? I know plenty of people it has happened to, and this blog is going to be a bit of a departure from some of my customary themes as today I share two different, real time, fraud events. These are actual events… People I personally know.

The first fraud involved a woman who was contacted by an undisclosed “law enforcement” agency that shared that her husband was in “major legal trouble”. She was instructed not to discuss this situation with her husband, police nor any other agency, as it would jeopardize the “investigation”. She was further instructed to gather $40,000, comprised of $50 gift cards and then mail them to this “group”. Out of utter concern concerned for her husband’s welfare, (mind you, they were newly married), she complied. She literally went around town, sourcing gift cards totaling $40,000 and proceeded to mail the $40,000 in gift cards to the “group”. Days later she learned the fate of her money and then reported the crime to local authorities, however, her money was gone. By using fear, the element of surprise and then threats, this person was manipulated into doing something she later saw was absurd.

The next fraud involved a foreign bank agent who contacted a local doctor and informed him that his great nephew named him as a beneficiary of an insurance policy with a $17 million dollar death benefit. He received several documents including a copy of the check made out to him. Several foreign financial firms were involved in processing the claim, from New York to Ontario to Toronto, to London to Charlotte, NC. He was instructed to wire over $800,000 to cover the unpaid charges associated with collecting the $17 million dollar death benefit. He complied, and over the course of six weeks sent six wires from his local bank to the requested foreign recipient. After he exhausted most of his bank holdings he called me to initiate withdrawals from his Raymond James accounts. I started probing, uncovered this costly fraud, and reported this for further investigation to our fraud department. I encouraged the doctor not to transfer any more funds. The red flags were this: His great nephew’s death was 10 years ago… why is this policy just becoming known? If transaction fees exist, which should never be for an insurance policy payout, why not just withhold the fees from the benefit? So, it would be $16.2M paid out – not $17M. However, they did not offer that and hence, well, life has been forever altered for this doctor. He brought me in too late.

There are several key take-a-ways with these two events.

  1. Fraud is real and it is most effective when unleashed with fear and threats.
  2. Discuss all financial issues with your financial advisor before taking any action. When you allow us time to help you with the enormous amount of tools and expertise we have, we become priceless in keeping your hard-earned nest egg intact. Once you send money out into the unknown, it is gone. This is a crime. 
  3. Know that there are many different angles fraudsters use: Winning a foreign lottery, holding your grandchildren or family member hostage until you send funds, your banking accounts are frozen until you send funds… and please do not click on links to emails suggesting you need to supply your name, SS# and date of birth to “fix” anything. Go to the bank. This is called “click bait”.
  4. Pause for a moment and ask yourself---If it sounds too good to be true, it likely is. The proverbial “silver bullet” does not exist. Question everything… and be patient. Do not be bullied. 

Please be safe out there and never hesitate to contact me as a prudent sounding board. Just one of the many services we provide.

We Remain …. At your service,

Steven T. Wilmarth, CEP®, WMS
Senior Vice President, Investments
Managing Director
Wealth Management Specialist