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stock investment fraud and scam

Stock Investment Crimes, Fraud and Scam Exposed
Don't Be the Sucker Who Falls for this Confidence Game

Foreward: This is the story of a real stock investment fraud, scam and crime. You could call it scheme, a swindle, or a confidence game, but by any name it's still a crime. For the purposes of this article, all names have been changed. The names of people, companies and products involved in the stock investment fraud have been changed because of ongoing criminal investigations. All names are fictional and any resemblance to actual people, companies and products is purely coincidental. Don't be the next sucker who falls for this stock investment scam.

The Set-Up For Stock Investment Fraud

Recently, Jerry, a good friend of mine, saw first-hand a stock investment scam. It was a crime, and he fell for the fraud. He was invited to an evening seminar at the home of a friend of a friend. It turned out to be kind of a Tupperware party, but without the Tupperware. What they were selling was stock in a new start-up company, Stucker Research.

At the seminar, Conrad K., the smooth-talking, traveling CEO of a brand new company, introduced himself. He made a convincing presentation of his business concept and the opportunities for profit. He showed off his prototype product, which was a natural supplement called Brain Bliss. Brain Bliss came packaged attractively with slick graphics, endorsements, and convincing health research. Brain Bliss promised to enhance your brain and memory, to improve focus, restore cognitive function and make you smarter. But the kicker, according to Conrad, was that Brain Bliss was the first cure on the market for Alzheimer's disease, a major medical breakthrough at Stucker Research. “Restore your brain power” the package says. “Enhance memory and learning skills that you thought were lost forever!” Brain Bliss sells for $119.95 MSRP. So far, so good. You can imagine the buzz at the party when Conrad said that it cured Alzheimer's disease, the most common form of dementia.

The Scam and the Pitch

Charismatic Conrad, the CEO of Stucker Research, made a presentation for a once-in-a-lifetime opportunity he was offering new investors. He was giving Jerry the chance to buy shares of stock in his jewel of a company. Jerry could get in on the ground floor for a modest investment of $10,000. In exchange, he would receive a 1/10,000 interest in the company. It was almost certain that his investment would double in value immediately. If my friend had stopped to do the math, the price he was offered meant that the unproven company with no sales and a prototype product was valued that evening at a cool $100 million. And that very evening, he could also buy cartons of Brain Bliss at the wholesale price of $119.99, to resell for profit, to use as gifts and to promote the company. Conrad just happened to have the trunk of his car full of Brain Bliss. And Conrad failed to mentioned that the product had never been tested or approved by the Food and Drug Administration as a cure for Alzheimer's disease. Of course, the research results were bogus.

The Sucker Who Fell for the Stock Fraud

It so happened that my friend Jerry did have just over $10,000 saved up for his retirement. And it was burning a hole in his bank account. “I really can’t retire on just $10,000,” he told himself. He knew in his gut this was his big chance. Conrad the promoter sounded so convincing, the product was amazing and he was hungry for some action. So, with no financial data, no credit check and no research, without consulting anyone, he took the bait, hook, line and sinker. He ponied up his nest egg and signed on the dotted line. In return he got a gilt-edged stock certificate.

The Swindle

Maybe you think I’m being too hard on Jerry. Conrad was a lot harder on him. Shortly thereafter, the phone for Stucker Research was disconnected. The amateurish two-page website was taken down, and the one and only online vendor says that they no longer stock Brain Bliss. Conrad left town without saying goodbye. It was the oldest game in the book, a con game.

The Game

Right now I’m looking at a bottle of Brain Bliss, the memory cure-all. Jerry gave away bottles to all his friends. It is a convincing little product, bright colors, strong promotion, and it might even be good brain food. Recommended for ages 18 and up, for everyone who wants to improve his/her intelligence and memory. I’m reading the box promo. “Builds your powers of focus, observation and perception, strengthens brain health, memory and cognitive skills. The resuls are remarkable!” Jerry has asked me to tell everyone that you can have your own bottle of Brain Bliss for the value price of $119.95, just what he paid for it. Unlike Stucker Research, he still has a few dozen bottles in stock.

How to Smell a Stock Investment Scam

Jerry learned his lesson the hard way. He took it on the chin and in the pocketbook. From the get-go, there were obvious clues that this offer wasn’t on the up and up. First off, he was promised an astronomical return on his investment. “A medical breakthrough. We’ve found the money-tree,” Conrad told him. When something sounds too good to be true, it usually is.

Conrad pressured him into an immediate decision. “It will be too late if you don’t act now,” he hustled. Conrad wanted him to act while his enthusiasm was high. A week later the euphoria would have settled down and the voice of reason would have said, “No way, Jose.” What was the necessity for speed, after all?

Conrad painted a rosy picture of the future, when the money would roll in. He had no business plan, no marketing strategy and no FDA test results to show. Yet, he claimed to see the future as plain as day. How reliable was this prognostication? Couldn’t Jerry see through the charade? In fact, everyone wanted it to be true, so no one questioned the proposal sensibly. It's possible that Conrad didn't even own the rights to Brain Bliss, but simply repackaged an existing product.

That’s the way scams operate, cloaking everything in mystery. In this case, the business was all smoke and mirrors. There were no financial statements or other evidence of the company. Jerry could have run a credit check or a police check. He could have asked for references. His attorney or accountant might have been the voice of reason. The State Attorney’s office and the Better Business Bureau are also good sources of information. Even a quick Google check would have made him wiser. This information is a bit too late to save Jerry’s $10,000 stock investment, but it’s not too late for you.

Everyone wants to ride a winner. But Brain Bliss was a stock investment fraud, swindle, a hoax, a confidence game. And wise people, who should know better, are taken in every day. As for Jerry, he found a new interest. He started playing online poker, expecting to break the bank. Just a few months later the FBI shut down all online poker sites. Jerry is still trying to get his money back from his poker account.

I wish you much success in life.
I hope you have a very happy day.

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