- Investment pays unrealistically high returns with little or no purported risk.
- Promoters lead extravagant lifestyles and use their wealth as sales tool.
- The actual investment lacks transparency and involves secretive investment strategies.
- No audited financial statements, or annual reports are issued by small, local firms.
- Investment managers are the subject of past fraud allegations or numerous civil lawsuits.
- Promoters utilize word-of-mouth or affinity marketing through religious and social groups.
- Promoters mask the identity of other investors.
- Investments in foreign currency transactions or cash businesses.
- Investment targets one type of person such as seniors or school teachers.
- Promoters over-emphasize their credibility through use of education degrees, titles or status.
Kathy Bazoian Phelps, a partner at Danning, Gill, Diamond & Kollitz, LLP, specializes in representation of trustees and receivers, debtors and creditors in reorganization, and in liquidation of estates. She is a recognized expert on Ponzi schemes.