ST. GEORGE — “The best way to help people with fraud is to help them avoid it in the first place,” Richard R. Best, regional director of the U.S. Securities and Exchange Commission, told those in attendance at a recent seminar.
More than 50 people attended the free public event, organized and sponsored by the Financial Fraud Institute and held at the Dixie Center St. George Nov. 2.
The three-hour program’s two keynote speakers were John W. Huber, the U.S. Attorney for the District of Utah; and N.B., a local fraud victim who requested that her full name not be used by the media.
In her tearful remarks, N.B., an 84-year-old great-grandmother from St. George, related how she’d been victimized by a woman who had called her last year and told her she’d won $11.5 million in a sweepstakes contest.
Shortly after that first phone call in February 2016, the caller, posing as a 64-year-old woman named “Kimberly,” insinuated herself into N.B.’s life as a supposed friend and confidant, calling and messaging her hundreds of times over the next few months. All the while, N.B. was told not to tell anyone else about her upcoming windfall, lest she violate its confidentiality clause.
“Kimberly” managed to get N.B. to to send her most of her life savings and also got her to liquidate other assets, eventually conning her out of more than $150,000.
Eventually, however, N.B. confided in her family members, who then alerted the authorities. Shortly thereafter, the FBI set up a sting operation to catch the culprit, who was eventually identified as a 27-year-old Massachusetts woman named Raven Shakes.
In federal court in July, Shakes, who is originally from Jamaica, was convicted and sentenced to 51 months in prison. Shakes was also ordered to pay N.B. back $161,000 in restitution.
N.B., however, knows she is unlikely to see any of her money again.
“I will get that money back when pigs fly,” she said during the seminar.
N.B. called the ordeal “humiliating” and “life-changing,” and acknowledges she should have recognized the red flags as they were happening.
“I had the strangest feeling that this was a scam, but I ignored that,” N.B. said.
“I’m OK, but it’s still hard to talk about,” she said, adding that she doesn’t answer her phone anymore unless she knows the caller.
“I still get four or five (solicitation) calls a day,” she said. “I’m not as trusting as I used to be.”
Best said that the fear of embarrassment often makes victims not want to disclose their situation to others, even spouses or other close family members.
During his speech, Huber touched on similar themes, explaining how fraudsters exploit the kind and generous nature that many Utahns share.
“Many of our victims have a sense that something’s wrong,” he said. “But still, they persist in giving money and trusting that person.”
Huber encouraged those in attendance to inform themselves about the methods commonly used by scammers, in order to better recognize “red flags” when they go up.
“We can’t fall victim to the swindlers,” he said. “We need to protect ourselves and protect others.”
The seminar featured two separate hourlong panel discussions, each with representatives from government and consumer-protection agencies. Each of the eight panelists shared information and insights about fraud and answered questions from the audience.
“If it sounds too good to be true, it is,” said Don Lopezi of the Financial Industry Regulatory Authority, an independent, nongovernmental regulatory organization. That mantra was repeated several times during the seminar.
Cheryl Mori, senior adviser for the SEC, talked about the methods used by notable scam artists, including former Riverton resident Curtis L. DeYoung, who was convicted of defrauding some 5,700 victims in retirement-fund schemes involving more than $25 million. DeYoung is now serving a 10-year prison sentence.
Panelists also identified some of the most common types of scams, most of which involve variations on the idea of getting rich quick, with supposedly little or no risk. These may include Ponzi or pyramid schemes, day trading and stock options, foreign exchange schemes, advance fees and new tech startups, among others.
Woodwell said when it comes to investing, the principles of risk and reward are inseparably linked, but most con artists attempt to break that cardinal rule, promising high returns and little to no risk.
“If someone was making so much money, why would they need your money?” he said, noting that many people are drawn into such schemes.
“At the end of that rainbow, the pot of gold’s not there,” Woodwell said.
Woodwell also advised against making hasty decisions regarding money and investments.
“Don’t be rushed,” he said. “Negative emotions always lead to bad financial decisions.”
During the second panel discussion, Daniel O’Bannon of the Utah Division of Consumer Protection explained several common scams, including impostors who spoof a phone’s caller-ID feature to pretend to be someone else, such as a grandchild, a fellow member of a church or a representative from a utility company or government agency.
One such scam recently surfaced when two area residents reportedly received calls appearing to be from the Washington County Sheriff’s Office, warning them to send money or they would be arrested on outstanding warrants.
O’Bannon said caller-ID information can be easily manipulated by scammers to make people think the call is originating from a legitimate source and number.
Other similar types of scams commonly involve charitable donations, utility payments, IRS tax bills and unsolicited lotteries or other types of prizes that require payment of a fee to collect.
“There’s a reason these keep coming back, and that’s because people keep giving them money,” O’Bannon said.
David Sonnenreich, deputy attorney general for the Utah Attorney General’s Office, said that ID theft takes many forms, including electronic methods like email and website spoofing, phishing and cyber-attacks that breach large databases.
Still, he said, “Most ID theft is actually still done in the traditional way,” meaning stealing objects such as wallets and purses, credit cards and mail.
Jamie Hipwell, special agent for the IRS, reminded taxpayers not to give out personal information, including Social Security number, over the phone. Anyone legitimately connected with the IRS would already have that information, he said, encouraging recipients of any tax-related calls to be skeptical and ask questions. Suspected fraudulent calls should be reported immediately to the IRS Impersonation Scam Reporting website. You can also call 800-366-4484.
Also during the seminar, FBI special agent Michael J. Pickett encouraged consumers to remember the “Four R’s” related to protecting themselves from scams, namely: (1) red flags, (2) resources, (3) research and (4) reporting.
Pickett also admonished the audience members to not only educate themselves, but to reach out and help others avoid becoming fraud victims.
“I want you to share this (information) with as many people as you can,” he said.
The event marked the Financial Fraud Institute’s third such seminar in Utah; the group plans to continue presenting the information at locations around the state, Best said.
Here are a few basic tips to avoid becoming a victim of fraud or scam, courtesy of the SEC:
- Ask questions and check out the answers.
- Research before investing.
- Know the salesperson, and don’t judge their integrity based on appearance.
- Take your time, don’t be rushed into investment decisions.
- Be wary of unsolicited offers.
- Don’t lose sight or control of your investments.
- Don’t be afraid to complain.
- Financial Fraud Institute’s website.
- Federal Trade Commission’s online scam-reporting tool.
- Better Business Bureau’s Scam Tracker.
- National Do Not Call Registry.
- Financial Industry Regulatory Authority website.
- U.S. Securities and Exchange Commission website.
- Utah Division of Securities website.
- Utah Division of Consumer Protection website.
- State of Utah Adult Protective Services.
- AARP’s Fraud Watch Network.
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