Checking In On Fraud Prevention Month

March is Fraud Prevention Month in Canada and the Alberta Securities Commission (ASC) wants investors to be on alert for any potentially fraudulent schemes disguised as too-good-to-be-true investment opportunities.

To show Albertans how easy it is to become a victim of investment fraud, the ASC orchestrated a scheme of its own to raise awareness about the red flags that you should watch for when considering a new investment. A fake company called “Maplestock Investments” was created and an investment seminar was advertised online through sites like Facebook and Kijiji with the promise of a ’can’t lose’ investment opportunity.

The seminar was a set-up, a fact that was revealed to the 22 attendees halfway through the session. The entire event was filmed and turned into an educational video for Fraud Prevention Month.

The point is, fraud is all around us and that’s why it’s paramount for investors to check the registration of companies or people offering investments before they hand over their hard-earned money. The ASC has free resources available on its website – – to help investors learn ways to increase their investor education and detect a scam.

It’s Easy To Fall Victim To Fraud

There’s a good chance that you or someone you care about has been approached by someone offering a shady investment deal. In fact, one-in-five Albertans believe they have been approached with a possible fraudulent investment, according to the ASC.

When I worked in the hospitality industry, a co-worker named Ricky always seemed to be falling for some type of investment scam. The worst part was that he’d try to convince his co-workers to join him at seminars and in get-rich-quick schemes.

Yes, Ricky, who buried a couple bars of silver in his backyard after the financial crisis, got caught up in an online pyramid scheme where investors contributed $2,000 with the promise of succulent monthly returns in the neighbourhood of 10 to 12 percent.

From what I recall, if Ricky managed to convince others to sign-up under his name then his returns would skyrocket. The scheme quickly unravelled and poor Ricky only got back a few hundred dollars of his initial investment.

Then there was the investment seminar that Ricky attended where he was convinced that the country of Spain had yet to discover the convenience of ATMs. Ricky and a small group of investors would each put up $10,000 and corner the Spanish ATM market – pocketing monthly dividends from ATM fees.

The first warning sign was when the slick-talking lead investor said he was having trouble getting the ATMs into the country – perhaps these “new” cash dispensers were being held up at the border for further inspection. It turns out he was just buying some time before skipping the country himself and leaving with poor Ricky’s $10,000.

Finally, Ricky wanted in on a proposed real estate development in Crowsnest Pass. Investors had to come up with big money to get in early on this scheme, which pegged the Pass as the “next big resort development.”

Thankfully, either Ricky got cold feet or he couldn’t pull together the $20,000 minimum required for a down payment on this speculative project. This was a blessing because it turned out that 864 Alberta investors lost more than $33 million before the RCMP charged two Calgary men with investment fraud and theft.

Fraud Prevention Month

Spotting the Crooks

If you find yourself listening to an investment pitch that sounds too-good-to-be true, you can be sure that it is. Warning signs to watch out for include the “exclusivity” of the investment and the “limited time offer” or pressure to invest immediately.

At that point you need to excuse yourself and walk away. Tell the pitchman that you need to do more research before you’re willing to invest. It’s true, after all. You need to fully understand how the investment works, how it generates money, and how those involved will get paid.

According to the ASC, by the time a scam is revealed, in most cases the money has either been spent or moved offshore. The best way to protect yourself from fraud is to avoid handing over your hard-earned money to a scam artist in the first place.

Another sign of potential investment fraud is the promise of high returns with little or no risk. There is no such thing as a free lunch and in most cases the higher the promised returns, the higher the risk.

Offshore investments or profits that claim to be tax-free are other red flags to avoid. Taxes can sometimes be deferred, but they can’t be avoided. This tactic is used to get investors to send their money offshore where it is difficult, if not impossible, to get back.

Exclusive offers or insider tips should immediately raise your eyebrows. If the opportunity is only being offered to a select few, ask yourself if you managed to get lucky or if you’re the sucker in the room.

Final Thoughts on Fraud Prevention Month

Years ago investment scams were perpetrated over the phone, through the mail, or even sometimes door-to-door. But investment fraud is more troubling today in the Internet age, where online advertisements that lead to a fancy website can create the illusion of a large and reputable company.

A careless investor can quickly and easily lose their life savings through a variety of scams, including Ponzi schemes, pyramid schemes, advance fee schemes, pension scams, and exempt securities scams, to name a few.

Don’t fall victim to investment fraud. Do your homework before you invest. Speak up and say something to the Rickys in your life who seem drawn to these types of scams like a moth to a flame.

About the Alberta Securities Commission

The ASC is the regulatory agency responsible for administering Alberta’s securities laws. The ASC’s website,, contains a wealth of free information designed to teach Albertans ways to protect their financial well-being. This includes how to check the registration of the person or company offering the investment, and how to identify the red flags of fraud.

If you or someone you know has been a victim of investment fraud, contact the ASC at 1-877-355-4488 or email

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