Affinity Fraud: Deaf Con Preys on Hearing Impaired
Ripping off the elderly is high on the list of disgraceful financial frauds, but it gets worse than that.
Recently the Commodity Futures Trading Commission clamped down a Honolulu resident who was allegedly running a Ponzi scheme focused on scamming members of the deaf community.
Marvin Cooper and Billion Coupons Inc. defrauded 125 deaf individuals out of $4 million, the CFTC claims. The operation involved promises of 15% to 25% monthly returns through foreign exchange and commodity trading, it said.
Cooper’s situation illustrates the predatory nature of affinity scams, cons that capitalize on the interconnections among a well-established group of acquaintances.
Cooper himself is deaf, so he had a pre-networked group of individuals that were ideal victims because the all shared a disability with the con man.
The Securites and Exchange Commission began warning of affinity fraud in 2006, when it noted past scams focused on Jehovah’s Witnesses, African Americans, Koreans, Latin Americans, and senior citizens in Texas. Nonetheless, the SEC and the CFTC continue to unearth such despicable schemes on a regular basis.
While scams that pitch 25% monthly returns seem like the sort of the thing only unsophisticated investors fall for, some pretty smart people have fallen for some pretty dubious cons.
Perhaps the brilliance in Madoff’s scheme was that he didn’t offer bogus yields as high as those of the many Ponzis that got nailed during his tenure. His was an affinity scam tuned to the affluent.
For those less well-heeled but more knowledgeable, affinity is still at the core of many stock manipulation schemes, especially those relying on chat boards and the Internet to disseminate phonied-up information.
No one will admit to trusting anyone on a stock trading chat board. But this odd sense of community just sneaks in sometimes… and that’s when they get you.
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