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Howard Ain, Troubleshooter: Man Invests In Fake Start Up Business

Updated: Wednesday, November 27 2013, 04:31 PM EST
NEXT TIME YOU THINK YOU'VE FOUND AN INVESTMENT YOU THINK IS FOOLPROOF-- YOU SHOULD PROBABLY THINK AGAIN.

LOCAL 12 TROUBLESHOOTER HOWARD AIN SAYS YOU CAN NEVER DO ENOUGH RESEARCH BEFORE INVESTING YOUR HARD EARNED DOLLARS. 

START UP BUSINESSES ARE BIG THESE DAYS.  EVERYONE IS LOOKING TO GET IN ON THE GROUND FLOOR OF THE NEXT GOOGLE OR APPLE.

BUT, AS ONE MAN LEARNED, IF YOU'RE NOT CAREFUL-- YOU COULD GET BURNED.

WAYNE KING:  "If the guy is good, you have a good investment - If he's bad - you have a problem."

UNFORTUNATELY - FOR WAYNE KING - HE HAD A BIG PROBLEM.

THE REAL ESTATE DEVELOPER DECIDED TO TAKE OUT A LOAN FOR $400-THOUSAND OLLARS TO INVEST IN A START-UP POWDER COATING BUSINESS.

TAMMY MAYLE:  "Mr. King thought it sounded like a great opportunity."

POWDER COATING IS THE PROCESS OF COATING METAL WITH PAINT IN A POWDER FORM THAT IS CONSIDERED MORE ENVIROMENTAL FRIENDLY.

THE CONMEN TOLD KING THE BANK WAS ALSO LENDING THEM A MILLION DOLLARS TO GET THE BUSINESS OFF THE GROUND.

MAYLE:  "So, Mr. King thought if the bank and the SBA is backing the loan I should be able to give $400-thousand dollars and be fine."

BUT, NOTHING WAS FINE.  TURNS OUT THE CONMEN LIED ON THE BANK APPLICATION.

KING:  "I did due diligence on myself, but the bank authorizing this didn't do due diligence on this guy."
             
WHILE KING WAS BEING STRUNG ALONG BY EXCUSES AND DELAYS - POSTAL INSPECTORS FOUND OUT THE BUSINESS WAS NEVER OPERATIONAL.

MAYLE:  "There was never one job produced out of the business.  Both suspects used the money to live off of - to pay personal debt - to pay all of their expenses and within nine months the money was gone and filed for bankruptcy."

KING: "You should know the people you are dealing with... find out what their personal finances are..."
              
INSPECTORS SAY KING'S LIFE HAS BEEN TURNED UPSIDE DOWN.

MAYLE:  "He was devastated, this was his livelihood, his retirement, he is 73 years old and he still works 8 to 10 hours a day to repay this loan."
                     
THE SUSPECTS WERE CONVICTED OF BANK FRAUD AND ORDERED TO PAY RESTITUTION.

Howard Ain, Troubleshooter: Man Invests In Fake Start Up Business


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