NASAA Marks Military Saves Week by Taking Aim at Fraud Targeting Military Members

WASHINGTON, D.C., February 21, 2012 – The North American Securities Administrators Association (NASAA) encourages military members and their families to shore up their defenses against investment fraud during Military Saves Week (February 19-26). 

“State securities regulators stand ready to help the men and women who serve our country protect their hard-earned dollars,” said Jack E. Herstein, NASAA President and Assistant Director of the Nebraska Department of Banking & Finance Bureau of Securities. “Unfortunately, military families may be targeted by con artists who exploit their ties to the military community to gain the trust of their victims.” 

State securities regulators have taken action in fraud cases involving military investors. For example:

  • A trio of men who called themselves the “3 Hebrew Boys” traveled the Southeast holding seminars in homes, churches and hotels near military bases to convince investors, including soldiers deploying to Iraq and Afghanistan, to put more than $80 million into their currency scheme. Less than $1 in every $10,000 they were given was actually invested. State regulators acted on an anonymous tip and the men were ultimately sentenced to three decades in federal prison.
  • A former Army sergeant in Colorado was sentenced to 12 years in prison for running a million-dollar Ponzi scheme that depleted the retirement and college savings of nearly 100 of his fellow soldiers. The former combat medic, who built close ties with his victims during two tours in Iraq, was not registered as an investment adviser or broker with the Colorado Securities Commission. He promised returns of 18 percent, but instead falsified quarterly reports and spent investor money on luxury vehicles and island vacations. 

“Before you invest, you should contact your state securities regulator to determine if the investment and the person recommending it are properly registered with the appropriate authorities,” Herstein said. To find your state securities regulator, visit www.nasaa.org

The NASAA website also features several resources designed to help military families learn how to avoid investment fraud, including: 

  • Salute to Smart Investing. This guide to saving, investing, retirement planning and fraud prevention, prepared especially for the Armed Forces, is available in an online “flipbook” format. 
  • Conversation Starters for Military Families. Click through this series of open-ended questions to help your family kickstart an ongoing dialogue about budgeting, saving, investing and avoiding scams and frauds. 
  • Investor Resource Library. Learn more about the Top 10 Investor Traps threatening investors and explore additional resources to help you invest safely. 

NASAA is a proud partner in Military Saves Week and America Saves Week, a national public awareness effort led by the Consumer Federation of America to motivate people to start saving for their financial future. To learn more about America Saves Week, visit www.americasaves.org.  

NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico.  

For more information:
Bob Webster, Director of Communications
Leah Szarek, Manager of Communications
202-737-0900 

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