Wednesday, February 24, 2010

Scam leads to jail time

Sometimes it's hard to understand what "fraud" is all about when studying for your exam. Remember that fraud always involves an element of deceit or manipulation. If somebody sells you securities under false pretenses, you have been defrauded. For example, if I sell you stock in my company and never tell you that we owe American Express $800,000, use your money to pay them off, and then close down our office, you would be sort of upset, right? Or, if I pretended to be your investment adviser but was really just withdrawing money from your account and covering it up with bogus account statements, you might want to, you know, talk to me?
Just the other day, a gentleman in nearby Oak Brook was sentenced to 4 1/2 years after he sold stock in his company to 6 investors. Unfortunately for the investors, the gentleman's company had already been dissolved by the Illinois Secretary of State's Office when he sold the "stock", and he simply took their money to pay off his own bills and personal expenses.
Nice. If you want to see a press release, Google "Dion H. Welton." And never give your money to someone for any type of investment opportunity without checking things out first.

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