A free chicken dinner can cost you a lot more than the time it takes to eat it.
That’s what a bunch of retirees in Florida learned, according to a civil fraud case filed by the Securities and Exchange Commission.
The commission has charged 4 investment advisers of scamming $3.9 million from more than a dozen investors, many of them retirees. The advisers recruited their victims via “free dinner” investment seminars at a Tampa restaurant, the commission says.
Joseph Andrew Paul and John D. Ellis Jr. — both from Philadelphia — cut and pasted marketing materials from another firm’s website to create a fraudulent pitch to investors, according to the commission. 2 others — James S. Quay of Atlanta and Donald H. Ellison of Palm Bay, Florida, misled seniors who responded to their free dinner offer, the commission charges. Quay is a felon as well as a disbarred attorney.
A more than 56% return promised
Paul and Ellis falsely claimed that their firm managed as much as $164 million in client assets and that its investment strategies generated annual returns ranging from 8.5% to more than 56%, the commission’s civil complaint says.
“A large portion of the money was never invested and instead was split among these self-described investment experts whose real expertise was stealing other people’s money,” said Sharon Binger, director of the commission’s Philadelphia Office.
Florida is a target-rich environment for scam artists who prey on senior citizens, but it can happen anywhere.
Tips to preserve your retirement savings
Bankrate offers these tips to keep you from losing hard-earned retirement savings:
- Know the score: Remember that even if it’s legitimate, they are there to sell you a product.
- When they say “act now,” respond with “maybe later.” They’ll leave a number or email address for you to respond later.
- Before signing anything, check the background of the seller. Start with the SEC website, but there are also court sites to check for lawsuits against people.
- Be alert to dubious promises: When terms like “guaranteed return” or “no market risk” are used, skip dessert and run for the door.
For more information, read 5 ways to avoid “free lunch” investment scams.
Have you been to a free dinner for investment tips? Did you get a hard sell from the advisers to buy an investment product?