I am a financial fraud investigator. I see it all, from forged property documents to cryptocurrency scams. There are smart people out there who go to lengths to defraud well-meaning investors.
Sadly, I can summaries 6 observations, from experience.
1) Fraudsters have already worked out an escape plan before they take your money - hiding it offshore, in the name of a relative, in cryptocurrency (now very common), or just spending it then declaring bankruptcy. They make it hard for you to get your money back.
2) It is so much easier to detect and stop a fraud before investing, than trying to recover money once it has been defrauded.
3) The police and the courts don't really understand and don't really care - "You're rich, you lost, we don't care.."
4) Lawyers are always very super keen to take your case, will charge a lot of money over time, often not really understand the case, and generally will give you bills, not your money back..
5) The more countries are involved in the scam, the less chance of recovery - cross border crime has a very high success rate of escaping a prosecution.
6) The closer you are to retiring, the more a financial loss hurts - often destroying retirement plans.
Whether it is a friend of the family, or even a super-regulated investment fund, nobody is safe.
I've been in the finance game for 40 years, and now help defrauded investors who have been ripped off. I trust very few institutions, no matter the name - banks, courts, regulators, I have looked them all in the eyes. I am currently working on a project in Luxembourg involving €100 million ripped off from over 300 unsuspecting investors, 4 funds all prize-winning, audited by a big 4 accounting firm, overseen by the regulator, making money month after month for 3-5 years - then boom, all gone to zero. Suing big firms is expensive, they have deep pockets and fight for years, hoping to exhaust your depleted funds.
So please think twice, and again, and again...
There are simple investments, like an investment property near to where you live; there are difficult investments like binary options, online trading or cryptocurrency. And remember, if you can't afford to lose it, don't risk it!
