Protecting North Carolina's Seniors:
AARP Tele-Town Hall to Take On Tax Scams and Financial Fraud
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As the April 15
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tax filing deadline draws near, scams related to the IRS, the NC Department of Revenue and government impostors is on the rise. The advent of new technology is giving criminals a bigger advantage and putting people’s sensitive financial data at greater risk. Older adults remain a top target for fraud and identity theft.
NC Secretary of State Elaine F. Marshall will join NC Secretary of Revenue Ron Penny this Friday (March 6
th
) from 1 p.m. to 2 p.m. for an AARP North Carolina Tele-Town Hall to help our state's seniors recognize and report tax-related scams and other financial fraud, including investment scams.
AARP tele-town halls are a great way for seniors to connect directly with the regulators who protect them. You do
not
need to be an AARP member to participate in this free event. To be joined by phone, please register by going to:
https://vekeo.com/event/aarpnorthcarolina-50833/
. AARP will call you when the program starts and you will be joined to the program. You will be given the opportunity to ask questions. The audio will also be live-streamed on AARP North Carolina's
Facebook page
.
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NC SOS Securities Division Holds Successful CLE
Continuing Legal Education seminars, or CLEs, are vital to the professional development of attorneys, allowing them to stay up to speed with evolving statutes and practices and assuring that the standards of and public confidence in the legal profession remains high.
Our Securities Division staff presented an informative three hour Continuing Legal Education (CLE) seminar last week at the North Carolina State Bar Association.
Senior Securities Attorney Zesely Haislip, Investor Education and Protection Director John Maron and Investor Education Specialist Ann Elmore gave attorneys a thorough update on securities enforcement matters, investor protection, crowdfunding and capital formation.
Feel free to visit our website if you're interested in a CLE on Securities law or other areas in the Secretary of State's purview, including Notary law and eCommerce.
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Former Raleigh Police Officer Gets 10 Year Prison Sentence for Multi-Million Dollar Investment
Fraud Scheme
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Gregory Anthony Christos, 62, of Raleigh was sentenced in federal court on February 11
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to 10 years in prison after pleading guilty to wire fraud and money laundering.
Christos entered a guilty plea last January to two counts of wire fraud, one count of money laundering, and one count of failure to file tax returns.
Christos, who served as an officer with the Raleigh Police Department in the 1980s, later
became the self-described managing partner of Cambridge Global Consultancy, a purported consulting firm through which Christos
fraudulently marketed and sold various investment schemes to victims.
The Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation conducted the investigation in this matter. Assistant United States Attorney Adam F. Hulbig represented the government.
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Former Haywood County Resident Facing Charges in Alleged Ponzi Scheme that Targeted Seniors
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A former resident of Haywood County, North Carolina was indicted in federal court on February 20 on charges including securities fraud, wire fraud, investment adviser fraud and money laundering.
Mark Nicholas Pyatt, 40, who also went by the
alias Daniel G. Randolph,
lured investors – many of them at or near retirement – to invest in futures, forex and energy-related stocks through his limited liability company, Winston Reed Investments.
Investors were promised returns from 15% per month that he claimed could grow to a 100% return in three to four months. Instead, investor funds were allegedly used to pay earlier investors and converted to Pyatt’s personal use to purchase luxury items including jewelry and a Corvette.
Victims who invested with Pyatt while he was living in Haywood County are alleged to have lost at least $218,000 in the scheme.
In making the announcement, Andrew Murray, U.S. Attorney for the Western District of North Carolina, commended the Haywood County Sheriff’s Office, the State Bureau of Investigation (SBI), and Homeland Security Investigations (HSI) for their aid in the investigation of the criminal case, and thanked the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) for their continued cooperation. Assistant U.S. Attorney Daniel Bradley, of the U.S. Attorney’s Office in Asheville, is in charge of the prosecution.
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One Call Could Save Your Life Savings!
Is that individual offering you an investment opportunity licensed to sell securities in North Carolina? Is the investment opportunity itself registered? Know before you sign!
While registration in and of itself is no guarantee against fraud, not being registered is a very big red warning flag.
We urge you to take five minutes to call our NC Investor Hotline at 1-800-688-4507 to see if the person you have been dealing with – perhaps even for years – is properly registered and/or has a disciplinary history. You can also check to see if the actual investment itself is properly registered.
Pick up the phone and call us. You owe it to yourself and your family to check. And please also consider sharing the information in this newsletter with
YOUR
contacts or your social networks. Doing so will help keep your friends and loved ones safe, too. More information can be found at
https://www.sosnc.gov/divisions/securities/for_investors
.
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Public Comment Sought
on Proposed Continuing Education Program for Investment Adviser Representatives
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The North American Securities Administrators Association (NASAA) is
seeking
public comment a proposal to create a continuing education program for investment adviser representatives.
“We are proposing a responsive and relevant continuing education program to help investment adviser representatives better serve their clients and keep their skills sharp by remaining knowledgeable of current regulatory requirements and best practices,” said Christopher W. Gerold, NASAA President and Chief of the New Jersey Bureau of Securities.
You can submit comments
here
. The comment period ends on March 30, 2020.
While IA representatives aren’t currently required to get continuing education training, the Secretary of State’s Securities Division has offered 38 voluntary "best practices" workshops since 2010, which have been attended by approximately 1,000 IA representatives. NASAA's request for comment is your opportunity to make your voice heard one way or the other on this matter. NASAA will publish all comments it receives, but we also encourage you to send your comments on this matter to us at
secdiv@sosnc.gov
.
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Cybercrime is Everybody’s Business
Business Email Compromise (BEC) scams made up nearly half of all cybercrime losses last year, costing victims more than $1.7 billion, according to the FBI’s Internet Crime Complaint Center. One such scam recently cost Shark Tank Judge Barbara Corcoran nearly
$400,000
.
These sophisticated schemes typically involve the electronic transfer of funds. As in Corcoran’s case, the scams typically involve business email accounts being compromised through social engineering to trick victims into unauthorized transfers of funds.
Corcoran took to social media to remind everyone that if it could happen to her, it could happen to anyone.
Some helpful tips to help keep your data safe from cybercrooks: pay close attention to emails and links in emails and avoid providing personal data via email, and use voice verification for substantial wire transfers.
For additional information about how to stay cybersecure in the marketplace, check out the U.S. Securities and Exchange Commission's (SEC) "
Spotlight on Cybersecurity
" webpage. It has links to investor alerts, information for financial firms, and even a short quiz to see how "cyber-savvy" you are.
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State and Provincial Securities Regulators Offer Resources Addressing Unique Investing Issues Facing Women
New Outreach Program Designed to Help Women Strengthen Financial Confidence
I
n recognition of Women’s History Month and the women’s suffrage centennial, the North American Securities Administrators Association (NASAA) has developed an
outreach program
to help state and provincial securities regulators provide investor education that delivers practical tools addressing the unique investing issues faced by women.
Through the “Financial Empowerment for Women” initiative, state and provincial securities regulators in the United States, Canada, and Mexico will work with local partners to offer free workshops to help women think about their financial profile, risk tolerance and financial goals, said Christopher W. Gerold, NASAA President and Chief of the New Jersey Bureau of Securities.
“It is extremely important that women have the tools to plan for their financial future,” Gerold said. “Our goal is to provide resources to help women strengthen their financial confidence and avoid investment fraud.”
“Research shows that nearly all women will be financially responsible for themselves or their families at some point in their lives. But many are under‐prepared to face these challenges,” said Lisa Hopkins, NASAA President-elect and West Virginia’s Senior Deputy Commissioner of Securities.
Women comprise nearly half of the workforce in the United States and are earning more than ever before, with income growth up 75% in the past 45 years. Yet research shows the average single woman has three times less wealth than the average man and one-quarter of all women indicate they have not planned for their financial future.
“All too often the financial deck is still stacked against women due to unique challenges such as longer life spans, filling the role as full-time caregivers for children and parents, and the gender pay gap,” said Lynne Egan, Montana’s Deputy Securities Commissioner and chair of NASAA’s Investor Education Section, which includes the Senior Outreach Project Group that developed the new outreach initiative.
In response,
NASAA has developed new resources
to help provide information to help women plan for their financial future and avoid securities fraud. Resources in the Financial Empowerment for Women program include information sheets and presentations on investment fraud, information on where to get additional assistance.
[
Note
: NC SOS's Investor Education and Protection Team has conducted presentations geared toward the investing issues that women face. P
lease contact Investor Protection & Education Services Program Director
John Maron
if your community group is interested in us bringing our workshop for women investors to your town.] .
NASAA Reminds Investors to Beware of Con Artists Looking to Profit from Fear and Uncertainty
In light of ongoing developments related to the current coronavirus (COVID-19) situation and its impact on financial markets, state securities regulators
remind
investors to beware of con artists seeking to capitalize on fear and uncertainty.
“We know con artists are opportunistic and use current events to cloak their schemes with an air of immediacy and legitimacy. Never make an investment decision without understanding what you are investing in, who you are doing business with, where your money is going, how it will be used, and how you can get it back,” said Christopher Gerold, NASAA President and Chief of the New Jersey Securities Bureau.
The NC Secretary of State’s Securities Division urges North Carolina residents to call the NC Investor Hotline at (800)-688-4507 to check the registration of the salesperson and the investment opportunity before making an investment decision.
Investors should be on the lookout for scam artists trying to use the market downturn and the coronavirus to scare investors into so-called “safer, guaranteed investments.”
“If you have concerns about your retirement accounts or investments, talk to your financial professional,” Gerold said. “Avoid making decisions based on panic or fear.”
To help investors identify common telltale signs of possible investment fraud, NASAA has provided three questions to ask before making a new investment.
- Is the investment being offered with a guaranteed high return with little or no risk? All investments carry risk that you may potentially lose some or all of your money. Anyone who says their investment offer has no risk is lying. No one can guarantee an investment return.
- Is there a sense of urgency or limited availability surrounding the investment? If the offer is legitimate, it will be there later. If someone offers you a “can’t miss” investment opportunity and puts you on the spot, don’t be afraid to walk away.
- Is the person offering the investment, and the investment itself, properly licensed or registered? For the same reasons you wouldn’t go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products.
“Make sure you have all the facts before you hand your money over to someone else to invest,” Gerold said.
[
Note:
The North Carolina Department of the Secretary of State also warns citizens that these same tactics are used by fake charities claiming that they are raising money to help victims of disasters like this. For information about how to be a smart donor, visit our website at
https://www.sosnc.gov/divisions/charities
. Charity Navigator also has a
page
dedicated to nonprofits assisting in the response to coronavirus.]
CFTC Becomes First Federal Agency to Adopt NIST Privacy Framework
On January 28
th
, in recognition of Data Privacy Day, the Commodity Futures Trading Commission announced it will become the first federal agency to adopt the National Institute of Standards and Technology (NIST)
Privacy Framework
. The framework is a voluntary tool designed to improve privacy through enterprise risk management. The CFTC will integrate the framework into its enterprise risk portfolio and use it to better manage and communicate privacy risk throughout the agency.
NIST is a physical science laboratory housed within the U.S. Department of Commerce that is dedicated to promoting U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve Americans’ quality of life.
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- On December 10, 2019, the U.S. Attorney’s Office for the District of New Jersey announced the arrest of three men in connection with a cryptocurrency mining scheme that defrauded investors of $722 million. The North Carolina Secretary of State's Securities Division conducted an investigation into a fraudulent cryptocurrency mining scheme known as the BitClub Network. Due to the multi-jurisdictional complexity of this scheme, the Division's investigation was coordinated with the United States Attorney's Office in New Jersey as well as the Internal Revenue Service Criminal Investigation Division (IRS-CI). According to the indictment, from April 2014 through December 2019, the defendants operated BitClub Network, a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors. For more information, please see the U.S. Attorney’s press release. On May 30, 2018, the Securities Division issued an investor alert regarding BitClub Network and its activities. Click here to read the alert.
- On November 21, 2019, United States Attorney Robert J. Higdon, Jr. announced that a federal grand jury had returned an Indictment charging ANTHONY WAYNE MARCH, 48, of Wake Forest, North Carolina, with one count of Securities Fraud; three counts of Wire Fraud; one count of Bankruptcy Fraud; one count of Obstruction of Bankruptcy Case; three counts of False Oaths; and four counts of Money Laundering. The indictment follows an investigation by the NC Secretary of State’s Securities Division and the IRS Criminal Investigation Division. For more information, click here.
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NC Department of the Secretary of State
Securities Division
Investor Protection & Education Services
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