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Consumer Alert: How to spot an investment scam


How do you tell a legitimate investment opportunity from a scam? Two words could prevent you from losing your life savings.

Nathan Amsden spent years saving so he could start making modest investments to prepare for his childrens college education. But that was all derailed when he met Bill Orestis, who managed to lure Nathan into an investment scam.

"What they were saying is they wanted to put a pool of people together to pool all their money together so they can get into the market to trade the Euro," explains US Postal Inspector, Dan Forristal.

Orestis was very persuasive, even offering to put money in himself.

"If I come up with 15, and you come up with 5, that will close the deal and cause the market is going really crazy right now and I want in on this…" says Amsden. "So he hooked me in, we closed that deal, I came up with $5,000 and he gave me a note, a personal note promising to pay me back."

Orestis also showed Nathan documentation that illustrated what appeared to be the investment's track record.

"The victims would have a chance to look at what looked like real documentation from a website that is real from a company that actually traded the Euro and it would look like there were profit margins when in fact no money had been traded," says Forristal.

Meanwhile, the conman continued to ask Nathan for more cash.

"I was always adding small amounts of principle to an imaginary figure that was snowballing in value," Nathan explains.

By the end, Nathan had invested $60,000. But he was not alone. At least 18 other victims lost $1.4 million dollars in the scam.

"It was all I had... all I had saved up for the girls' education. Life insurance policy, the college fund, everything in cash, everything in the checkbook," says Nathan. "At that point that was the end of our dealings because I had nothing left, he knew I had nothing left."

"The worst part of the whole investigation, was when they had the opportunity to take money they wouldn't take most of someone's money - they would take all of their money until there was no money left," says Forristal. "It was never ending, they made sure to take every penny they could from people."

Forristal and other Postal Inspectors hope the scam will help consumers remember how to avoid similar situations.

"The big thing we always see is "no risk" the term investment in general implies risk. They go side by side. There is no investment you can make that doesn't have risk."

Orestis was sentenced to nearly three years in prison, followed by three years of supervised release.


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