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Howard Ain, Troubleshooter: Affinity Fraud Alert
CINCINNATI (Howard Ain) -- Some people call her the Bernie Madoff of the Filipino community. In the U.S. she allegedly ran off with a million dollars in a ponzi scheme that targeted her fellow countrymen.
Local 12 TroubleShooter Howard Ain says con artists often succeed in scamming communities of which they are a member.
It's called affinity fraud and it occurs when scammers prey upon members of identifiable groups. It could be the elderly, or members of religious or ethnic communities. Razel Canedo targeted Filipino investors in a scam she pitched as helping fellow Filipinos.
Greg Ghiozzi, U.S. Postal Inspector: "Typically, she would give a victim a pitch about bringing Filipino nurses to the U.S. Once she gave the pitch, many of her potential victims would invest with her."
Canedo sold promissory notes offering a return of up to 50 percent. Investors said they wanted to help fellow Filipinos come to America and create better lives for themselves.
Ghiozzi: "They tended to trust her, because she was another Filipino."
Once investors realized they were not getting checks, Canedo went into hiding.
Ghiozzi: "The victims couldn't find her. They would call her, wait outside her residence. She fell off the face of the earth."
So, inspectors started tracking the money.
Ghiozzi: "We do know she was building a giant house in the Philippines. Some money was going to her relatives. One thing we are sure of is it didn't go to bring nurses coming over to the U.S."
Inspectors eventually arrested Canedo, but said the impact on investors was heartbreaking.
Ghiozzi: "It really affected a lot of people's lives. They gave her their life savings. They were very angry that someone in their community would have violated their trust, so aside from the financial impact it also had a strong emotional impact on them as well."
Canedo was charged with mail fraud and wire fraud. She pleaded guilty and is still awaiting sentencing. So remember, don't trust someone just because he or she is part of your community. When it comes to investing your money, always do your due diligence no matter with whom you're dealing.