Seminars teach seniors how to keep nest eggs safe

Staff WriterSeptember 22, 2009 

  • Investment fraud workshops will be held Oct. 14 in Asheville and Nov. 3 in Greensboro.

    If you can't make a workshop, a free 60-minute DVD, "Tricks of the Trade: Outsmarting Investment Fraud," is being released this fall. Copies can be pre-ordered by calling 866-973-4672.

    To verify the registration of securities salespeople and their firm, and to check whether any disciplinary action has been taken against them, call the secretary of state's securities division at 800-688-4507.

William Brock, a retired Duke Energy manager, was satisfied he had done his homework before he invested in Mobile Billboards of America.

Brock looked into the company's investment pitch -- such as a claim that it had insurance policies on individuals' investments -- and it seemed to check out. That, plus a guaranteed return of 13.49 percent and the fact that friends who had invested several years earlier were happy, convinced him to invest about $340,000.

But Brock's investment was wiped out when Mobile Billboards, which told investors they were buying truck-mounted billboards that the company would then lease back, turned out to be a scam.

"Nothing told me they were going to quit making the premiums on the insurance," said Brock, 63, who lives in Western North Carolina. He came to Raleigh on Monday to tell his story at an investment fraud workshop aimed at helping seniors.

The "Outsmarting Investor Fraud" campaign is an outgrowth of research on investment fraud by the AARP and the FINRA (Financial Industrial Regulatory Authority) Investor Education Foundation. Those groups, along with state regulators, are sponsoring the fraud workshops in several states this year.

Their research found that seniors who are scam victims tend to be married, college-educated males who are financially literate and active in their community, said Helene Savage, associate state director of AARP North Carolina.

"While seniors aren't necessarily more vulnerable to investment fraud, they clearly are more frequently targeted" because of the wealth they have accumulated over the years, she noted.

Education is crucial to combat the never-ending stream of investment scams, N.C. Secretary of State Elaine Marshall said.

"While Bernie Madoff taught Americans about the phrase Ponzi scheme, financial crime did not start with, and will not end with, Mister Madoff," she said. The secretary of state's securities division enforces the state's securities laws.

Last fiscal year, the Secretary of State's Office filed criminal charges in eight cases stemming from securities schemes, up from three the previous year, agency spokeswoman Liz Proctor said.

The state Attorney General's Office, meanwhile, received 78 complaints about investments in 2008 and 48 so far this year, said spokeswoman Noelle Tally.

Complaint data, however, understate the magnitude of the problem.

"Most of the time, when people are scammed, they do not share their story because it is such a hard thing to talk about," Marshall said.

One thing Brock could have done, said John Gannon, president of the FINRA foundation, was to check to see whether Mobile Billboard and the executive he was dealing with, Scott Hollenbeck, were licensed by state or federal authorities. A "guaranteed return" also can be a red flag.

If Brock had checked, he would have found that Hollenbeck didn't have a current license.

The Mobile Billboards scam, which bilked hundreds of investors out of $70 million, resulted in a half-dozen criminal convictions.

david.ranii@newsobserver .com or 919-829-4877

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