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Howard Ain, Troubleshooter: Beware of Guaranteed Returns on Investments
CINCINNATI (Howard Ain) -- If an investment opportunity seems too lucrative to believe, it probably is.
Anytime someone promises you a guaranteed return on your investment, be cautious. As you'll see, investors lost tens of millions of dollars because they believed a conman who recruited them at their church.
Advertising is one way for businesses to attract customers. As long as there are companies seeking to sell something, advertising of some sort will likely be part of the equation.
So, when the company, Mobile Billboards of America, started looking for investors it had no problem finding them.
"They basically told investors that they were going to secure advertising from major advertisers and put billboard frames up on the side of trucks."
To be exact, investors were told their initial investment would be $25,000 dollars and they would make 14% on their investment.
"They took in about $70 million dollars from investors all over the country and unfortunately very little of that got back to investors."
The mastermind behind the scam was using the money from new investors to pay old investors.
"The payouts get too big and it collapses and that's what happened in this case."
Based on how investors were recruited, postal inspectors say this was what's called "an affinity scam".
"Basically making someone comfortable with you by telling them they that they are part of something you are a part of."
In this case, church groups.
"He would get pastors himself or herself to invest, which would in turn lend a whole new level of confidence to anyone who attended that church."
The impact on the lives of victims was devastating.
"I know several of the victims have gone back to work at 70 or 75 years of age trying to make ends meet and provide for their families."
Seven people were arrested in this case. Their jail sentences ranged from 5 years to 22 years. Some advice from postal inspectors: always be wary of anyone promising a guaranteed return on your investment. Every investment has risk and you need to determine how much risk you can tolerate.