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-- know how that works and then of course you've heard of Ponzi schemer Bernie Madoff who swindled his clients out of billions of dollars but check this out many investment fraud cases.
Fly under the radar and they happen every single week.
In just -- last month take a look at judge sentenced the mastermind of an oil and gas Ponzi scheme.
Million dollars that people were taken for a Long Island based investment firm charged with.
400 million dollars in fraud.
And Scottsdale Arizona accountant was indicted in a 66 million dollar scheme so how do you protect yourself from fraud which is happening every single thing.
Here to tell us out of Ponzi proof your portfolio is Michael -- president of the wall financial group.
Great to see you here thank you for being with us that's a good topic because it's happening all the time.
It just amazes me that people continue to get sucked into these Ponzi schemes.
Why -- they show -- able to pull people and is believers.
You know it's a great point good to see you -- You know it's it's all the uncertainty it's going on today.
People are scared they want to move they want to find something that's better than they're used it you know.
And so they're looking for better opportunities and I think the biggest thing that -- and in.
Quite honestly is -- -- actually -- get excited about returns -- excited about things.
And they don't do the due diligence -- they don't go through some ground you know steps they need to really take to make sure that the investment suitable.
Or their idea of due diligence is oh I know one guy who's in it and he's very successful and I think it's a good -- I mean yeah what Bernie Madoff.
All -- start yeah we're in there everyone from Steven Spielberg's foundation.
-- -- shuts out Los Angeles who just heard from the next guy.
Can't believe this guy's performance owned by the way he won't let you and a maybe he will -- talk to him so there was the cool factor there -- -- right let's get to the four steps people need to take to Ponzi proof their portfolio.
The very first one you talk about is to make sure there's third party involvement please explain to people what that means.
-- -- you know I think this out of all of them is probably the biggest you know most of the time when people are a situation where.
They're looking for help they're they're generally looking for an advisor financial Coach to help them in life you know help them do what they need to do with their finances.
Usually what happens is most of the time when they invest money somewhere.
That money's doesn't stay at the advisor -- generally goes to a third party custodians like Fidelity or Schwab or insurance based company where the money's goes to them.
So you you know you we've heard of that term before cook the books that sort of thing in some of these schemes.
And what they'll do -- that what they're able to do as they're able to send out statements from the advisors firm basically saying.
You know this is what you returns of -- and and even sometimes give returns to people.
So when you have a third party custodian there's additional suitability there.
That make sure it's suitable for the clients right probably the biggest one.
-- at all and folks at what Bernie Madoff did was he had his own clearing firms so you got your statements from burning it -- saying oh -- -- Microsoft at -- at nineteen and now it's 31.
When it was all -- completely -- look.
First -- but I am with -- clear sir Charles Schwab I feel better about that.
OK number two you say track record double check the returns.
Yep I you know at the end of the day it's it's all about if it sounds too good to be true.
You know it might be too good to be true so I think you need -- track you know what's happened to -- what's going on where's the return coming from.
And you know -- what's backing it up in general so that's kind of what we're talking about -- don't just step in and say well that sounds good.
Just like you said about some of the folks with Madoff and other people -- he's doing she's doing it.
So check track and see where it's coming okay but this is where I disagree with your fourth one and that says check references.
Yeah but don't have any what does it references what do you mean by that.
I don't -- when -- when I say that it's not that's probably why it's the fourth white list it's not a safe fall if you help them.
It's just something where you -- say hey you know if if you're gonna -- -- by 2000 dollar TV.
You -- at least a little shopping and I think if you're investing your future portfolio.
You need to do the same thing and I in my opinion.
It warrants finding two or three or four clients that that they can refer -- to that they've been with.
For at least let's say five to seven years at least there's a little bit -- tenure there again it's not a safe fall and and all that goes with that but if you do some of the initial steps like -- -- some of those other things at least that in addition -- Help these -- jurors or -- it tricking you everybody's so -- our FaceBook page were writing it all out for you the for ways to Ponzi proof your portfolio Michael Walt thank you very much for educating and you and by the by the lately is that.
That will be in a chapter in our book coming out in August just say good good thank you so much hyped comeback at that -- -- they give David over immediately -- our.
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