Investment Scam?

[ShawnBron24]

What is the name of your state (only U.S. law)? Pennsylvania

My wife told me that at her job there is a person who was involved with a phone card business. Apparently this guy had been encouraging people at her work to invest into this company. People would invest $5,000, wait 3 months, and then begin to receive a $2,500 return each month for the following year totaling a return of $25,000. I thought this sounded a little strange but my wife told me that she had personally seen her co-workers collecting personal checks from this person every month for $2,500. So we decided to get in on it and gave this person $5,000 in July and we were told that in November we would receive our first return of $2,500 and then another one each month until the following November. When November came she got a call from this person and he said there was a problem with the checks and we would need to wait until January to begin receiving the returns. When January came around it was the same story. The person is still in contact with us, and from what my wife has told me other people at her job are still waiting. A few weeks ago the guy contacted my wife and gave her $500 in cash. It is now May and we still haven't received our money back. He keeps calling and saying "just a little longer." I am beginning to get very nervous that this has been a scam the whole time, and even if we do get the money back, this doesn't seem legal anyway. Do I have grounds to sue this person, or call the police on him? Would I be held liable if this is some type of illegal operation? I really don't know what to do.

 

[Mass_Shyster]

I am beginning to get very nervous that this has been a scam the whole time, and even if we do get the money back, this doesn't seem legal anyway. Do I have grounds to sue this person, or call the police on him? Would I be held liable if this is some type of illegal operation? I really don't know what to do.

Yes, this is a scam. The first few that received payments were paid to lure in more "investors". You should call the police immediately, and file a small claims suit against this guy before he disappears.

Unfortunately, I seriously doubt you will ever get any money back.

 

[swalsh411]

This is a classic ponzi scheme.

Foolish greedly people are usually the ones who fall for it.

 

[antrc170]

You should also file a report with the IRS. They love to go after ponzi scheme criminals who fail to pay taxes on their ill gotten gains.

 

[OHRoadwarrior]

WOW, amazing. Guy developed a way to turn $5,000 into $25,000 in a year and everyone is dissing him cause he wanted to share the love, instead of becoming independently wealthy.

 

[Hot Topic]

What is the name of your state (only U.S. law)? Pennsylvania

My wife told me that at her job there is a person who was involved with a phone card business. Apparently this guy had been encouraging people at her work to invest into this company. People would invest $5,000, wait 3 months, and then begin to receive a $2,500 return each month for the following year totaling a return of $25,000. I thought this sounded a little strange but my wife told me that she had personally seen her co-workers collecting personal checks from this person every month for $2,500. So we decided to get in on it and gave this person $5,000 in July and we were told that in November we would receive our first return of $2,500 and then another one each month until the following November. When November came she got a call from this person and he said there was a problem with the checks and we would need to wait until January to begin receiving the returns. When January came around it was the same story. The person is still in contact with us, and from what my wife has told me other people at her job are still waiting. A few weeks ago the guy contacted my wife and gave her $500 in cash. It is now May and we still haven't received our money back. He keeps calling and saying "just a little longer." I am beginning to get very nervous that this has been a scam the whole time, and even if we do get the money back, this doesn't seem legal anyway. Do I have grounds to sue this person, or call the police on him? Would I be held liable if this is some type of illegal operation? I really don't know what to do.

You and your wife have known this was a scam since the very beginning. At least she got $500 in cash. Just cross your fingers that the money isn't counterfeit or stolen. Call the police and report "the person." Don't expect the money back. Or anyone to feel sorry for you.

 

[QueenofEngland]

Where did the phone cards actually come in to play?

Are you familiar with how a pyramid scheme works?

How it works is you give $5000. In a few months, after he's had the chance to lure in more "investors", you get $2500/mo from the money they "invested." The problem with schemes like this is that eventually the new "investors" will dry up.

When I was a kid, a $1-version of this was going around to the kids in my neighborhood and the nearby schools. In the pre-computer days, we wrote out the note six times by hand, wrote our names and addresses on the bottom of the list, sent a dollar to the person who was on the top (and remove their name), and pass the six new notes on. By the time it got to me, I had a hard time finding anybody willing to take the six new notes because so many of my friends had already received one. Since it looked like I wasn't going to be able to make anything, I decided why bother sending the dollar?

Well, "investors", as you can tell, dried up, and if the people on the list above me sent any money, they weren't going to get it back.

I was 8, and able to understand the scheme. I get some leeway in attempting to participate because I was just 8. But I still was ultimately able to understand it.

Amazing to me now how so many adults can't understand what I learned as a little kid. Especially post-Madoff, there's no excuse to fall for this.

OP, you were suckered. Your $5k went partly to the people at the top of the list (seeing co-workers getting some money is how scammers get new investors, and so this is their own "investment"), and the scammer pocketed the rest.

Contact the IRS and the police. You probably won't recover any money, but at least you can stop others from being victimized. In the future, look into a business before giving money, and run away from those that guarantee a certain amount of return on a regular basis especially ones that sound too good to be true, or that promise to make you semi-rich fast. Any legit business will have its ups and down, its months of slow growth or even negative growth, and maybe even some months of doing very well. There's simply no guarantee. So a guarantee is a sure sign of a scam.