Friday, March 11, 2016

Safe from Scams: Fraud among Friends

When a good friend offers you an opportunity to double your money in just two months it may sound like an easy decision. Though not everything is always as it seems.

"If you let us borrow $10,000 we will pay you back $20,000 within 60 days," said Allen Langley, Fraud Victim.

Langley made the deal and got the investment returns in two months-- just as promised. "No place in the stock market offers you that kind of return."

He was investing with Chuck Beaver, a businessman who specialized in repairing industrial electronic equipment. "He went out, picked the parts up-- took them and had them rebuilt. Took them and reinstalled them," aid Langley.

The men conducted similar investment transactions three more times. So, when Beaver asked for money a fourth time Langley didn't hesitate. "Again, they had paid the first three investments, I felt good about it. So I gave them the $100,000."

But this time, instead of paying off the investment, Beaver said he needed additional money for lucrative new projects. "Chuck seemed to be like a nice guy, he certainly went to church with some friends of mine, and so, I felt like he was a genuinely good guy," said Langley.

So Langley encouraged friends and family to get involved. "Then, I had my mother invest."

As a group, they invested $280,000. Then, Langley got a call from postal inspectors saying it was all a scam. "He created a Ponzi-style investment by taking money from some people, and then also paying off others," said Christopher Davis, US Postal Inspector.

In all, more than 30 people lost $2 million. Langley admits, though he thought he could trust Beaver, he could have done more homework. "What I should have done was went one step further and called them to see if he was actually taking the parts there to have them repaired."

Chuck Beaver pleaded guilty to one count of securities fraud and was sentenced to more than 4 months in prison.

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