Scams ranging from time-worn Ponzi schemes to new types of mortgage fraud are on the rise across Washington and threaten to wipe out retirement savings.
And it’s not just the little old ladies getting snookered by con artists.
During a seminar in Spokane Wednesday, AARP showed the results of a study debunking commonly held views about investors and fraud victims. Among the findings: Defrauded people do not fit stereotypes. Most are married men earning more than $35,000 a year.
The problems spurred a new educational initiative by AARP and the Washington State Department of Financial Institutions (DFI) called “Invest Wise” to teach people about investment principles and how to recognize scams.
The problem is made more intense as Americans take more control of their retirement savings.
“We have had a seismic shift away from government and companies taking care of retirement programs,” said AARP state director Doug Shadel. “The burden is now on the individual to know how to save as traditional pension plans go away.”
Martin Cordell, enforcement chief for the state’s securities division, told about 200 people at the meeting that he investigates hundreds of investor complaints each year. Many generate administrative actions that force licensed investment professionals and companies to pay fines or even to agree to censure or suspension.
A handful of the complaints are referred to criminal prosecutors.
One Tacoma man, a retired teacher named Dick Mansfield, lost more than $175,000 to a European banking investment scam that promised a 48 percent annual return with little risk. When the fraud unraveled, investigators learned that Mansfield was among 1,300 investors who lost more than a combined $60 million.
The men who defrauded investors were imprisoned at San Quentin State Prison in California for 27 years.
Some investors Wednesday asked about the Metropolitan Mortgage & Securities Co. collapse and accounting fraud allegations that hit thousands of regional investors.
Cordell called it “one whopper of a case” that remains under investigation by DFI. The agency has fined and censured many brokers associated with Metropolitan for misleading older, conservative investor clients by encouraging them to hold or buy more Metropolitan debenture bonds and preferred stock even though the investments were unsecured and high-risk.