Small Story Teaches Big Lessons

You can learn how to protect yourself and those you love.

Part of my challenge in writing this blog is paring down long, detailed stories to a size that won’t deter you from launching into the story. That means that I sometimes have to leave out details — including good writing by the reporters who write these stories — that a different medium would allow. But the story for today is short. Even so, it is full of lessons that can mean the difference between a secure, well-funded retirement and penury. According to Eyewitness News 4, in Albuquerque:

RIO RANCHO, N.M. (AP) – A Sandoval County grand jury has indicted a Rio Rancho businessman on numerous charges for allegedly stealing $125,000 in an investment scam.

The state Taxation and Revenue Department says Russell Dils faces 16 felony charges that include securities fraud, selling unregistered securities, selling and soliciting to sell unregistered securities without being a licensed broker and racketeering.

Starting in November 2009, Dils allegedly sold unregistered promissory notes to five victims from several different states.

He’s also accused of trying to sell a promissory note to an undercover agent.

At the time, he was the owner of Southwest Machinery and Equipment. Authorities say Dils was also ordered by the Pennsylvania Securities Commission to stop offering and selling unregistered securities in 2009 and that he was cautioned by South Dakota and Oklahoma officials to stop offering to sell securities.

Although the charges, at this point, are only allegations (the defendant is presumed innocent until proven guilty) frequent readers will see two big lessons for vigilant investors. First, notice the use of promissory notes. They are so often the investment vehicle of choice for investment fraudsters that we could easily change the name of this blog to Promissory Note Watchblog and still have something to write about every day. No matter how long you have known the person offering you a promissory note investment, no matter how stellar his or her reputation in the community, no matter his or her faithful service at your house of worship, do not invest in any investment involving a promissory note until you have gotten a professional due diligence investigation or learned how to do one on your own.

Second, notice that this was not the defendant’s first brush with securities regulators. It’s a fair bet that none of the victims of this alleged scam even looked for prior problems. The first chapter of The Vigilant Investor covers why none of us is inclined to make that search, and how we can train our brains to do what does not come naturally. Please learn how to search for prior problems.

The stakes are high. You are outmatched. But you can learn how to protect yourself and those you love. What’s more, you can play a big part in making sure that investment scamsters get shut down before they victimize others. This is a time for heroes, and you can be one. Please get in the game.

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