Home » Business » Management

Don't Become The Next Victim Of A Scam

Jan 11, 2008
The best defence against scams is knowledge. There are so many scams, but in all cases, a little research and patience will prevent you becoming the next victim.

Corporate Sole/Church Organization Scam

WASHINGTON, D.C. - Eric Messier was permanently barred by the federal court from marketing a tax fraud scheme. According to the Department's Tax Division, Messier advised customers that, by using a "corporation sole," they could avoid paying federal income tax. Messier conducted his business through the Liberty Fellowship and the Liberty Holdings Trust.

Customers paid Messier $2,500 and $10,000 to participate in the scheme. He used a loop hole that authorizes religious leaders to hold property and conduct activities in a corporation sole, but only religious or charitable organizations qualify. Messier falsely told customers to create a "church" with no tax-return filing, and still use the assets and income for their personal benefit.

Messier must give the government a list of member names, addresses, phone numbers, and taxpayer identification numbers.

Tax Haven Abuse Scam

James L. Tolbert of Los Angeles, is banned from preparing federal income tax returns for others. He promoted a tax scheme by representing, that their members are not liable for federal income tax because they are "citizens of another state or country."

There are some alternatives to this scam that catch investors. The 'secret to success' is the fact that the investments are made on the Chinese Stock Market, and as they are not in the US, but foreign income, the investor does not need to pay income tax or be ruled by US regulations.

It is easy to fall victim to this scam because the person organizing the scam usually has a legitimate status in the financial or investing community. They are people who should know the loopholes.

One of the most common is where wealthy Americans are encouraged to hide stock and cash in offshore companies by disguising his ownership of the corporations that hold those assets. Victims of this scam are told they can hide their wealth, avoiding taxes, avoiding Capital Gains, and even avoiding losing the money in a divorce.

Most investors steer clear of emails that promise new opportunities in offshore investing or prime banks. Offshore company will promise huge returns from offshore investments that are bogus.

A typical offshore service provider sets up corporate formation agents and trust companies. These service providers establish the offshore corporations and trusts that serve as the recipients of assets that are transferred offshore. The client never needs to travel to the
jurisdiction, and the client's name typically appears nowhere on the formation documents.

Of course, this is illegal. It doesn't matter where your income is earned, and what currency you are paid, it is subject to income tax. The biggest concern with offshore scams is that they pop up, and disappear without notice, taking all their investor's money with them. As the investor was involved with an illegal practice, they cannot ask the government for help. In fact, if they do report the scam they may find themselves faced with high fines and even jail time for tax fraud.

Prim Bank Scams

Another scam involves prime banks. Prime banks are the top 50 banks in the world. Internet hucksters ask for investors money so they can invest in risk-free, high yield prime bank financial instruments. However, they invest in high risk, speculative investment vehicles that have absolutely nothing to do with prime banks. Avoid prime bank schemes like the plague.
In fact, some bold con artists make it sound easy to start your own off shore, prime, bank.

People fall for these scams because they drop terms such as 'guaranteed certificate,' Prime bank letters of credit, and pension funds. The victims are told that institutions will buy "Prime Bank letters of credit" from banks, but regulatory restrictions prevent the banks from selling directly to institutional investors. This is where the victim falls prey. They are told that a middle man is required to handle the transaction at a contractually prearranged profit.

Sometimes they are told the person will be 'hired' for a position, other times they are told they will be a middle man. They are told about the amazing opportunities made possible by pooling. And that the original company is old, and respected by industry leaders, Sheiks, and Kings.

Any program that asks an investor to step out of the protection and regulatory bodies of their country are always suspicious. If it also demands a certain level of secrecy, then the investor knows they have uncovered a scam.
About the Author
Mark Walters is a third generation entrepreneur and author. He offers free training and investing videos designed to speed you towards financial independence http://www.cashflowinstitute.com/videosignup.htm
Please Rate:
(Average: Not rated)
Views: 111
Print Email Report Share
Article Categories