FIGHT BACK\Investment scams aimed at retirees.

Byline: David Horowitz 

Many people, when they get toward the end of their working years, suddenly realize they don't have quite enough saved to maintain their standard of living. So they begin looking for higher yields on their IRA investments. Unfortunately, tens of thousands end up losing their savings to con artists who promise huge returns with little or no risk.

Last year, state securities investigators broke up a nationwide pension scam that defrauded an estimated 20,000 people out of their retirement savings. Through slick direct mailing and TV infomercials, these con operators were promoting investments in developing wireless cable operations, mobile radio licenses, interactive video and other high-tech communications services.

They promised returns of up to 600 percent over five years. Risk was supposedly minimal, since these investments were described as "IRA-approved" and endorsed by the IRS. In fact, the IRS neither approves nor disapproves individual investments.

The truth is that investing in any sort of emerging technology is highly speculative. The industry is changing so rapidly that no knows for sure which ventures will pay off and which ones will fail. These particular investments turned out to be worthless, and fraud investigators say it's extremely unlikely the victims will ever get their money back.

These scam operators know exactly whom they're targeting: older people with substantial savings who are looking for some sure way to increase the value of their private retirement funds. The victims know very little about the markets in which they are investing and are willing to believe the promoters' exaggerated claims about potential earnings.

That profile applies not only to high-tech investment, but to oil and gas leases, gold mines, rare stamps and coins, fine art and similar exotic "opportunities." True, some people do make money in these fields. But those people know the markets, the risks and the value of their investments. Most importantly, they are not investing their entire savings in highly speculative ventures.

There is a basic rule of economics that should raise a warning flag whenever someone promises high returns and no risk. The higher the return, the higher the risk. Anyone who claims they can bend that rule and wants to bring others in on the deal is almost certainly running a scam.

Think about it. If these people really knew some safe, sure way to double or triple their investments, they wouldn't waste their time and money promoting it to other investors. They'd put up their own money and keep the profits themselves. Instead, they get rich by brokering worthless investment products to people who have no idea where their money's really going.

You spent a long time earning that money. You can certainly afford the time to check out the offer before you invest. (If someone says you have to act now, that's another warning that it's probably a scam.) People who sell securities are supposed to be state-licensed and registered with the Securities and Exchange Commission. That's a good place to begin.

Ask for a detailed written prospectus and read it carefully - especially the disclosure of risk. If it seems vague or unrealistic, then there's a very good chance the promoters are trying to hide something from you.