Skepticism pays with investments

NEW YORK – If someone whose family once owned the New England Patriots, an independent director of several Dreyfus funds and a man who said he was a respected South African banker promised you above-market returns, would you hand them your money?

You might say you’d be skeptical, but administrative and civil proceedings around Brite Business Corp. show that many investors weren’t. They invested at least $52 million with a gang of frauds. A piece of the Securities and Exchange Commission’s case against the crew, which began in 2002, moved ahead on July 28, when one of the participants settled with the commission.

The proceedings are a reminder that when anyone, no matter how pedigreed, how important sounding and how well-connected, promises you extraordinary returns, your response should be ice-cold skepticism. Once the bad guys have your money, you may never see it again.

Some deals that come your way may simply be too risky for normal middle-class investors. Others are outright frauds.

If you want your financial statements to stay accurate and complete, avoid name droppers with big promises and hard-to understand plans.