FOUNTAIN HILLS, Ariz. — “Do not trust anyone that you meet online.” This was the advice that FBI Special Agent Martin E. Hellmer emphasized to attendees of a special presentation about elder fraud at Fountain Hills Community Center on Monday night. 

Agent Hellmer specializes in investigating white collar crime, which includes corporate fraud, money laundering and securities and commodities fraud. However, Monday’s presentation focused primarily on high yield investment fraud (HYIF), a type of securities and commodities fraud where fraudsters often target small-time investors. 

“High-yield investment frauds are frauds in which subjects (fraudsters) lure their victims into investing in ‘pie in the sky’ investment vehicles (investment schemes) that they typically say have guaranteed returns in short periods of time — and returns that are more than what you could expect anywhere else in the world,” Hellmer said.

According to the FBI, millions of elderly Americans become victims of financial scams every year, costing them $3 billion annually. Hellmer said fraudsters often view elders as attractive targets because they typically have money saved up and are looking to invest.

Hellmer outlined a few of the most common fraud schemes and scams that people fall victim to, and gave advice on how to avoid them. 

Ponzi schemes are a type of HYIF scheme where fraudsters lead their victims to believe that their money has been invested in “something” that will return high profits in a short period of time; however, no money is actually invested, Hellmer said. 

A famous example of this is Bernie Madoff’s ponzi scheme — the largest in history — which he ran through his investment firm. In 2009, Madoff was sentenced to 150 years in prison for defrauding thousands of investors, many of whom lost their life savings.

Another common type of HYIF scheme is advance fee schemes. Hellmer said that perpetrators of advance fee schemes ask their victims to send them a small fee with the promise of large investment gains in the future. 

To avoid becoming involved in a ponzi scheme or advance fee scheme, Hellmer said to avoid investment opportunities where the other party is guaranteeing no-risk investments and returns that seem too good to be true. 

There is also government impersonation fraud. Perpetrators of this kind of fraud claim to be IRS agents or other government or police officials and tell victims that they will go to jail if they don’t send money, Hellmer said. 

Luckily, avoiding this type of fraud requires one piece of advice. “A law enforcement or legitimate government official will never contact you over the phone,” Hellmer said. 

Romance scams are a type of scam where perpetrators often target widows and widowers, Hellmer said. Although a romance scammer and their victim usually will never meet in person, their relationship will escalate quickly and the scammer will start making requests for money based on various tall tales, Hellmer said. 

Hellmer said that romance scams can have dire financial consequences for victims, with some losing everything. However, they can also have legal consequences. 

“In many cases, after the criminals have drained their victims out of all their money, they then start asking them to essentially serve as money launderers,” Hellmer said. 

The scammer will typically have more than one victim at the same time, and use their unknowing victims to launder money through each other, said Hellmer. Victims who unknowingly launder money will generally be given a warning by the FBI, but if they continue to do it, they can face criminal charges, Hellmer said.

Hellmer said that recognizing the signs of romance scams — a belle or beau that can’t meet in person due to living overseas, tells fantastical tales, moves the relationship too quickly, and requests money due to various issues — can help you avoid being involved in one. Most importantly, not trusting everyone you meet online is important for avoiding not only romance scams, but many types of scams and fraudulent schemes, Hellmer said. 

If you suspect that you or a loved one is a victim of fraud please file a complaint with the FBI’s Internet Crime Complaint Center www.ic3.gov.