I-Team 10 Consumer Alert: Striking it rich

Posted at: 03/14/2013 4:27 PM
Updated at: 03/14/2013 6:01 PM
By: Brett Davidsen

If you have money tied up in investments, you'll want to pay attention to this I-Team 10 consumer alert. It comes with a warning that can't be emphasized enough.
Investors get tricked into parting with their savings, lured by the enticement of big returns. In reality, they're using your money to try to keep their scheme going.

Dennis Sindrey, fraud victim, said, “They said they had this investment opportunity and it looked really good deal."
Dennis Sindrey was one of many victims of an elaborate investment scheme. The conman was previously an attorney in Houston, who owed over $30 million in back taxes. Immediately after getting out of prison, he took up with some of his old friends and claimed he had ownership interest in oil and gas wells in Texas. He promised a return of 16% of your money.

Matthew Boynton, U.S. Postal Inspector, said, “The salesman was an out of work broker at the time, affable, genuinely friendly, ate dinner with these folks, hung out at their home, spent time in their homes, went to parties with them, really introduced them into their lives and vouched for these investments."

Sindrey said, “The first 10 months, I started receiving the checks, the intermittent, then not at all. And that's when we realized it was a Ponzi scheme.”

A similar case occurred here in Rochester, when federal authorities say more than 120 people invested money with this man, Ashvin Zaveri. Investors thought their money was going toward oil and natural gas exploration through his company. In reality, investigators say the proceeds were being used to pay off previous investors. Zaveri was indicted on money laundering and fraud charges but died in 2010 before the case went to trial.

Sindery says in his case, he felt like he failed his family.

Sindrey said,  "As you get older, you're not making money for yourself, so much you're making it for your children and grandchildren. I felt like I had let them down and lost their money."

In the Zaveri case, the government was able to return about $9 million to investors after going after his assets, life insurance policies and bank accounts. But postal inspectors warn that re-couping losses like these can be very difficult. 

Here's what you can do. First, do a thorough check on anyone you invest with. Value the references you get, but check them out out anyway. Also, verify their credentials from their education to the various license they have. Review litigation complaints filed by current or former investors are often times the first warning sign that trouble has been brewing.