Suckered by a pyramid scheme
Question: I invested $1,000 with a company called MTE in 2006. At a church meeting, MTE claimed to invest in securities and promised a monthly return of 25%. Before I got any payment, the state froze MTE’s funds, saying it was a fraud. Will I get my money back? – Steven Collins, South Holland, Ill.
Answer: Oh, dear! You let yourself get snared in a classic pyramid scheme, where scam artists recruit investors with promises of humongous returns, pay the early investors using money from the later ones – and spend the rest on themselves. Usually, by the time you realize you’re involved with no-goodniks, they’ve skipped town.
But thanks to the Illinois attorney general, you may get something back. According to prosecutors, Roy Fluker Jr., the founder of MTE (short for More Than Enough Wealth Creation Institute), and his cohorts hosted recruitment meetings at African-American churches on the South Side of Chicago eight to 10 times a month. They offered attendees “opportunities” to invest up to $20,000 a year for an ultrahigh return – 25% a month for 12 consecutive months – and said the money was going into stocks, real estate and foreign currencies.
But prosecutors say MTE invested in nothing. Most of the money went to repay early investors and to reward MTE’s principals with cruises and other trips. Illinois froze MTE’s accounts, valued at more than $3.1 million, shortly after you invested. “They were offering returns that you know can’t be real,” says Tom James, the lead prosecutor. Fluker and friends have pleaded not guilty and are awaiting trial.
While Illinois has dissolved MTE and banned Fluker and co-defendants from selling securities, no money has been returned to investors. The AG’s office is sending claim letters to the 3,000-plus victims and has posted claim forms on its Web site at illinoisattorneygeneral.gov. With limited funds remaining, you’ll probably get only a portion of what you invested. Still, you’d be lucky to get anything back in a deal like this one.
Tip: The stock market’s long-term return is about 10% a year. Any deal that “guarantees” lots more is suspicious. A promise of an outsize return on an investment should set off an alarm in your head.
So far Money Helps has saved readers $193,989.03
Having a financial nightmare? E-mail Donna Rosato at money_helps@moneymail.com.
- Reporting by O.C. Ugwu
One more thing I forgot to mention. This is for the guy who said if its too good to be true it must be, YOU ARE AN IDIOT! Have you ever heard anyone say its too bad to be true? Dont make any sence does it? Who tought you that by the way, your broke parents? If it sounds too good to be true, do the research and get your info from a good source.(not Uncle Jim who works at the local wal-mart) Thats why people fail financially, its because they get thier advice from other broke people who dont know nothing about nothing when it comes to business or making and investing money. They learn things like "If its too good to be true it must be" and "money is the root of all evil". How can you have something that you think is evil?
who ever said 10% should raise red flags is an idot! There are s&p stock index mutual funds that have averaged 13% over the last 30 years. Its not the timing in the market its the time in the market. Most of the people that post on this site really need to do some research and get their information from someone who really knows what they are talking about. Instead most people just state thier opinion. Thats why most people are broke!
The scams are more prevelant than ever before and the suckers that the scam artists are preying on are the millions of cash strapped people from all economic income levels out there looking for a quick fix to get out of debt . Buying into these scams will only bury you deeper into debt . They're even aware of the people who were smart enough to haved saved their money hoping to get them to part with their retirement or any other savings they have preserved . I just pulled one of many repeat mailings out of my mailbox a few hours ago titled , " how to turn my portfolio into a perpetual money machine " . These scam artists are very clever and creative . I'm clever enough to shred their offers in my paper shredder . I'm debt free and will retire comfortably within 5 months . I paid off thousands off $$ of debt by working hard and have stayed out of debt by paying my bills and not living beyond my means . I avoid the scams that reach my mailbox and delete the offers as spam that are in my email . There's not much room for trust in this society especially in times that are upon us .
The correct term is a Ponzi Scheme not a pyramid scheme. A little knowledge is dangerous…do some research before you call a spade a spade! Oh yeah…The guy is still an idiot for believing in a 25% return!
What's the deal?
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I didn't click on this… I'm sure there are qualifiers and "fine print", but don't blame your readers if we get confused about what to believe anymore!
it should set off an alarm that your reply of 10% a year over time in the market is the new pyramid scam
You're an idiot!
Did you really think you can get a legitimate return of 25% per month?
You're probably one of the same idiots that we are bailing out in this financial mess because you bought a house you can't afford and you did it with an interest only loan with a variable rate!
Fleeced while attending a meeting at his local church. Classic. Like Chief Wiggum once stated, "Where's your messiah now?"
I'm sure you've heard the expression, ‘If something sounds too good to be true, it probably is.’ Well, in the investment world, I say, ‘If something sounds too good to be true, it definitely is.’
[1997 Washington Times 3 June B7]
When I read the headline 'Suckered by a pyramid scheme' I thought that Al Gore's carbon credit nonsense was finally recognized for what it is. Silly me.
Ask yourself this very simple question, "If I can get 25% a month (300% for the year), by investing with these guys, why isn't everyone on the planet doing it?" What's more likely, that you found a secret gold mine or that your gullible? Have you ever heard the concept of "If it's too good to be true, it probably is." Maybe you should have your money taken from you to learn this lesson.
Any investment that "guarantees" returns even close to the stock market's long-term average return of about 10% is also suspicious.
A pyramid is when the top guy makes all the money and the bottom guy gets pennies ?? what about your job? do you make more than your CEO…??
I put my money in a investment firm and they collapsed. The only difference is it took them 30 years. MTE 6 months. Investment firm invested in the same thing as MTE claims they did… I wonder if MTE was still around would they ask for $700 Billion???
These pyramid schemes always go after religious people because they have that "blind faith" thing going on and are more gullible. Sorry, I think this guy who fell for it is pretty dumb. Pyramid schemes have been a joke since the 80s.
DREW,
Do you believe that everyone that disagrees with your opinion an idiot?
Also, please do not talk about someone's education level while you make grammatical/spelling errors in your comment (i.e. “Dont make any sence does it?”).