.44 Magnum Investment Scam Was Intended to Be a Real Killer
Sometimes it seems like the phrase "savvy investor" is an oxymoron. After all the times people have been duped by Ponzi schemes and Nigerian scams, they still fall for similar cons. But some investors recently found a way to lose their money with a real bang.
It's the case of the .44 Magnum Leveraged Financing Program.
Some 70 investors gave fake financial firm Dresdner Financial $5.77 million based on a pitch that was much too good to be true. According to the SEC:
"[T]he Magnum Program offered guaranteed profits through a process that involved leasing and monetizing bank instruments. Although the timing and amount of the promised payouts varied, many of the contracts that the Defendants entered into with the investors stated that an investment of $44,000 would yield a return of $2 million after 10-12 banking days."
No surprise, those were empty promises. The rest of the case has a plot line that could have been lifted from the pages of a dime novel. Geoffrey H. Lunn, a defendant in the SEC's case, is accused of giving more than $1 million to "a one-eyed man who used the alias Robert Perello," the scam's putative kingpin, according to the New York Observer. Perello's cronies were reportedly handsomely rewarded, and the cyclops spent nearly a million bucks on call girls in Sin City.
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This was an investment stick-up at its most brutal. And worse, it was intended to be. In its filing, the SEC notes: "According to Lunn, Perello told Lunn in the fall of 2010 that he named Dresdner's program the Magnum Program because 'when people found out they'd been ripped off, they would buy a .44 Magnum and shoot themselves in the head.' "
All we at DailyFinance can say is, when an "investment opportunity" seems too good to be believed, be extra careful before you pull the trigger.
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