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Investment Frauds & Criminal Charges: 6 Key Legal Facts to Understand

The majority of us have either personally fallen victim to financial fraud or know someone who has. If something like this happens to you, there are ways to repair the damage.

You may be dealing with the fallout from identity theft, credit damage, and financial loss following an instance of investment fraud, in addition to a variety of negative feelings like anxiety, annoyance, and rage. Financial fraud can have far more negative effects than just money lost.

Even if it could be challenging to recover fully financially, you must report the crime as soon as you can. No matter how little the scam, reporting it helps government agencies, regulators, and law enforcement in stopping the fraud, protecting more consumers from harm, and pursuing those responsible for it.

Investment Frauds & Criminal Charges: 6 Key Legal Facts to Understand
When someone is desperately trying to persuade you to invest somewhere (business, stock, etc), that is fraud.

What is fraud?

When someone is desperately trying to persuade you to invest somewhere (business, stock, etc), that is fraud. They may want you to invest in real estate, bonds, notes, commodities, stocks, or even currencies.

You might be deceived by a scammer or given false information regarding an actual investment. In this case, experienced criminal defense lawyers serving Pittsburgh can help you better understand it, notice it and if needed, fight against it.

Scammers may invent a fictitious investment offer. Scammers who commit investment fraud may pose as financial counselors or telemarketers. They exude charm, intelligence, and friendliness. They might tell you there’s an urgent need for an investment. To get your money as soon as possible and with as few questions as possible, they aim to gain your trust.

Signs of investment fraud

  • Unsolicited approaches via a knock on your door, a text message, an email, or a phone call.
  • When a business won’t let you return their call.
  • Situations in which you feel under pressure to decide quickly.
  • The only contact information they provide or have on their website is a PO box address or a mobile phone number.
  • Although it’s said to be little risk, you are being offered a huge return on your investment.
  • Hang up or leave if they tell you that you don’t need a prospectus or offering circular. Never invest before you’ve read up on the business and the venture and taken the time to research it.

Common frauds

    Recovery Room Schemes: scammers demand payment upfront in exchange for their assistance in helping you recover the money you lost from other investment schemes. They do nothing after you pay them. 

    Affinity Fraud: scammers attempt to deceive those who belong to a group that was founded on a shared attribute, such as age, race, or religion. Scammers believe that if the group leader invests, then other people will follow. 

    High-Yield Investment Programs: scammers promise that if you invest with them, you will receive large returns on your capital. They promise that the investment will provide profits. These investments are frequently fraudulent or, more accurately, equities that are being sold for nearly nothing.

    Pyramid Schemes: scammers will claim that you may make a big payout or profit from a tiny initial investment. However, you also need to locate other investors. In reality, the “profit” you receive is merely the money that other investors have paid. When the con artist runs out of new victims, he takes the entire amount and flees.

    Pump and Dump: scammers buy cheap stocks and lie to potential purchasers about the quality of the stocks to raise their prices. You are thinking that investing in a stock is a good thing, so before the scammer sells it to someone else, he will make you buy it for one price after he is going to sell it for a much bigger one and leave you with no money and worthless stock.

    Look for some tips if you have already decided to invest in something. You should calculate every step for you to be successful.


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    Make a file on investment fraud

      Begin by gathering all pertinent evidence related to the scam into a single file that you store in a safe place. The name, phone number, and internet address of the offender should be included in the filing.

      Add a timeline of events, which may span years, including the fraudster’s alleged regulatory registration numbers, if it is available. Any reports you filed with law enforcement, along with any pertinent notes or evidence regarding the scam, should be included in your file.

      Include your most recent credit report from each of the credit reporting agencies. This is an additional crucial piece of information.

      Recognize your rights

        Crime victims have rights under federal and, occasionally, state legislation. To better defend yourself, become aware of your rights. Check with your state attorney general and the U.S. attorney’s office that is closest to you to find out more about your rights as a victim of crime and the resources that are available to you.

        Inform regulators about fraud

          States, federal, and national regulating bodies for investment professionals and products can be of assistance. Reporting investment fraud to as many agencies as possible could be beneficial.

          Recommended Read: Shielding Your Finances in the Trading Landscape

          Inform the police about the fraud

            It’s critical to notify law enforcement about the investment scam to start the recovery process, guarantee that those guilty are looked up, and stop additional harm from occurring to other people.

            Think about your choices

              Recovering assets lost to investment fraud can be challenging. However, there are respectable paths to follow. Through arbitration, mediation, or a civil lawsuit, you might be able to recover some of your lost assets. Civil lawyers with experience handling financial fraud cases can advise you on the possible remedies for your case if you decide to file a civil claim.

              However, you should be aware that filing a civil action can be expensive and time-consuming. Furthermore, it could still be challenging to collect on a judgment even if you prevail.

              Recovering assets lost to investment fraud can be challenging. However, there are respectable paths to follow.
              Recovering assets lost to investment fraud can be challenging. However, there are respectable paths to follow.

              In the future, be cautious about becoming a target, especially if you have money taken through fraud.

              This could be used by dishonest businesses who offer to assist you in getting some or all of your money returned. Anyone who contacts you and says they can assist you get your money back is someone you should ignore.