Investor's Watchdog.com: Stock, finance and investment protection for investors

David Wehrs told prospective investors that he would place their money in an FDIC-insured money market fund that guaranteed to pay 10.85 percent interest annually.  Thirteen investors believed him and lost more than $1.9 million.  The U.S. Securities and Exchange Commission has filed an enforcement action against Wehrs and his company, Maryland Title and Escrow Co., and the local U.S. Attorney’s Office has filed a criminal information against Wehr.

There was no such money market fund.  According to the SEC, Wehrs misappropriated investor funds, using them to day trade in a brokerage account, to support a separate company he owned, to make escrow payments for his title company, to buy real estate and personal assets, to vacation in the Virgin Islands, and to make Ponzi payments, which lulled investors into believing that the phantom FDIC-insured fund actually existed.  All of the money is gone.

The SEC also alleges that Wehrs sent phony account statements to conceal his fraud.  An official looking “account statement” is no indication that an investment is legitimate.  It is just a part of the standard scam artist supply kit.

We have been predicting that Bernard Madoff’s record-setting fraud taught would-be scam artists to promise returns more within the realm of possibility.  Ten percent is stretching it these days, but far from the 100 percent returns promised by other scams.  Expect scam artists to continue to promise returns around ten percent, possibly even slightly less.  Because they are not paying you any return whatsoever, the return to them is always 100 percent.  They decide what to promise you based not on what they can deliver, but on what they think will best convince you to invest.

The only way to protect what you have worked so hard to save is to get a pre-investment investigation of any unregistered offering.  When banks move cash, they hire private protection.  Is your nest egg that important?