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Thursday, February 5, 2009

DFI's Director Of Securities Reminds Investors To Verify Licenses

Today, Bellevue resident Robert Miracle was arrested at his home and charged in connection with a $65 million oil and gas investment “Ponzi” scheme. Miracle and two other men face a 23-count indictment alleging conspiracy, mail fraud, wire fraud, money laundering and tax evasion.

When asked about the arrest and charges, DFI's Director of Securties Mike Stevenson reminded investors that they should be vigilant.

“While we are pleased to see these men brought to justice and facing charges for deceiving and defrauding investors, this case only exemplifies the need for consumers to be even more vigilant,” DFI Division of Securities Director Michael Stevenson said. “It is more important than ever for consumers to investigate brokers and investments before parting with their money.”

Protect Yourself By Asking Questions
Before you invest, protect yourself from fraud by asking these questions:
  • Are you and your firm registered to sell investment products?
  • Are you registered with the SEC?
  • Are you registered with Washington’s Department of Financial Institutions?
  • What is your license number?
  • Is this investment registered with the SEC or Washington DFI?
What Are Ponzi Schemes?In a Ponzi scheme scheme investors are told a cover story about how the business will earn money to allow it to pay high returns to its investors. In fact, the business is earning little or no money. Instead it repays early investors “profits” which are really money raised from new investors. Eventually the scheme collapses when the pool of new investor money runs dry. The scam artists often blame government intervention as the reason why new investors did not get their promised returns.

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