Seniors Take On Scam Artists

By Lookout Staff

The deal seemed too good to be true - invest your life savings in commercial real estate and get a 25 percent return, not per year, but per quarter.

Unfortunately for Abe van den Brock it wasn't true.

"I lost $140,000 in cash," said the retired engineer. "I didn't see even one penny. That money would have allowed me to do many things. To have a nest egg for my retirement."

On Thursday, van den Brock fought back. He was one of dozens of seniors who joined the American Association of Retired Persons, Santa Monica's WISE Senior Services, regulators and law enforcement officials to help blow the whistle on boiler room and telemarketing scams that cost Americans an estimated $1 million an hour.

The seniors, many of them from WISE's RSVP program, manned phone banks in a "reverse boiler room" set up at Santa Monica's Bay View Plaza Hotel. They warned others - many of them already victims on con artists' "mooch lists" - about the boiler room scams, which are mostly perpetuated on seniors who have saved their hard-earned cash.

"From phony ostrich farms to fictional real estate deals, investment scams swindle Americans out of billions of dollars each year," aid Charlie Mendoza, an AARP board member who joined the fraud-fighting effort. "Be ready for the criminal telemarketer. Just hang up. Be alert."

Valerie Caproni, regional director for the Securities and Exchange Commission (SEC), provided some useful tips.

· Check investments with the SEC before parting with your money.
· Get written information. "This is money you worked hard to get," Caproni said. "Don't just give it to some long-haired guy on a motorcycle."
· Invest with a proven company, preferably someone you know.
· Don't invest if you are told to make a quick decision, not to get legal advice or that the government doesn't know about the company.
· Be especially wary of high-risk ventures such as entertainment and the Internet.

"Most calls are scams. Avoid them," Caproni said. "We're in a bull market. A lot of people are making a lot of money. Making 10 percent on a mutual fund is better than losing it all. If it sounds too good to be true, it probably is."

There are 300 illegal, high-pressure telephone sales companies in Southern California, said Bill McDonald, acting head of the California Department of Corporations.

"The cons will follow the headlines," McDonald said, "Internet, entertainment, high tech, oil and gas, biotech, foreign currency. The goal is throwing the worst of the operators in jail and running the rest out of town."

The FBI's Los Angeles Field Office has identified 150,000 persons targeted by telemarketing scams per year.

"We continue to investigate and lock up, but the best method is prevention through education," said James DeSarno, the assistant director in charge of the field office. "Telemarketing frauds routinely prey on the elderly. Don't become a statistic."