FBI Uncovers Billion-Dollar Investment Scam

A group of fake investment advisors should have paid closer attention to the investors who they targeted with their fraudulent business scheme.

An undercover FBI agent, posing as a wealthy investor, caught the con artists in the midst of pitching their investment scheme, which involved targeting victims with offers of substantial returns on their investments with very little risk. And, just last month, the remaining members of this scheme were sentenced to federal prison for the role in the scam.

Project Collateral Monte

These criminals and the high-yield investment programs they were pitching were under the watchful eye of the FBI since 2005, when they began a two-year undercover operation dubbed Collateral Monte, which was created out of previous complaints, witnesses and victim referrals.

Collateral Monte took place in Orange County, California, where wealthy investors are plentiful. They focused their sights on residents there, which included many doctors and retirees.

The con artists began their scheme by setting up a fake financial advisory company. The FBI started their operations by responding to an Internet posting that said the company had access to a “private placement program.” The scam told victims that their $10 million investment would result in a $100 million return after 50 weeks. The company also promised several other private placement programs that offered even higher returns based on higher investments.

Upon contacting the company, the FBI undercover agents were introduced to a number of official-sounding members of the bogus investment team, many of whom referred to themselves as banking experts, compliance officers, and federal trade administrators, among others.

The ultimate goal of the con artists was to gain the victims’ money and ultimately run with it, all the while telling them that only a “privileged few” were invited to participate and that the investment was regulated by the Federal Reserve Bank

By 2008 the FBI had enough evidence to seek a criminal indictment against the co-conspirators.


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