Investment Question?????????

wcc · 06:29 AM

I know that all investments are risky!!! EVERY TIME I invest I assume I'm going to lose money. Which is ok, cause if I do there's no loss. So I invested with a "Energy" company that deals in oil.

I'll leave names out, & didn't invest much. But all along they said they we're making money and that if I kept it in I'd make more. So I left it in. Now it comes time for the payment and all of a sudden they don't have any money to pay out investors. So they stonewall me and say the money is there but they are waiting on a Purchase agreement.

I say BS, and I've already written the money off so now it's the principle of it. Man this is gonna be fun dragging them through court (MUD) and F'in around with them, when they could have just paid us up front.

I don't even care if I win, but I have all the initial people's(investor taker's) \home addresses, business addresses. I have access to the Attorney General's/ BBB office's to just mess up their day and slow down their payment/sales it would make it worth it to me. I say F-'em if they want to play games I'm all into it!!!!! I've already written off and made up for my initial investment. So if they pay me or not, it's fun knowing that they paid a TON to resolve this issue instead of paying me off.

Am I being too hard on them? The money to me is already lost in my books so might as well try to have some fun or get paid off. Or am I being a *****?

I can afford my loss. But how would you deal with a loss? Before you answer,r say how much you could throw out the window before classifying it as a loss..

I'll post my loss in couple of days..........

schamp · 10-31-2006, 07:23 PM

To me it would depend on their attitude and I guess we can forget about their honesty. Once they lied I would consider changing their names to defendant.

wcc · 10-31-2006, 07:34 PM

I wish I could respond to their attitude. They rarely answer the phone and it usually take tricks to get them to answer their phone. Like changing my number to so when they get caller ID they call back wondering who called and so on..... IT'S BS!!!!!

the · 10-31-2006, 07:43 PM

From the info you've given, it sounds like an outright scam.

If that's the case, you could go after them, but you won't get anywhere. They'll stay around long enough to keep the other pidgeons who came in after you going as long as possible, but once the heat gets too hot, they'll just pack up and disappear.

But if you do have individuals involved and they don't disappear, and the scam is big enough, there's a chance that some of them may get caught and prosecuted. But probably no chance for monetary recovery, there usually isn't.

Are they based in Florida?

Dottore · 10-31-2006, 07:58 PM

I assume this was a private placement of some sort. If so, read the Information Memorandum very carefully before trying "to get even". Leave emotion out of this. Be very clear about your rights and then act accordingly.

widgeon13 · 11-01-2006, 02:56 AM

unless you can prove outright fraud, you can probably kiss the money good-bye at least for now. it may cost more to get something back than what it's worth.

Big Ed · 11-01-2006, 04:40 AM

You invested in that free electricity generator that was making its way around these boards recently? Sorry to hear it didn't work out for you.

competentone · 11-01-2006, 05:28 AM

Quote:

Originally posted by wcc
I know that all investments are risky!!! EVERY TIME I invest I assume I'm going to loose money. Which is ok, cause if I do there's no lose. So I invested with a "Energy" company that deals in oil.

.... Now it comes time for the payment and all of a sudden they don't have any money to pay out investors. So they stonewall me and say the money is there but they are waiting on a Purchase agreement.

I'm not sure if you're going about your investing activities correctly if you are assuming you are going to lose money every time you make an investment -- you should clearly see BOTH the risks factors and profit potentials when you make an investment and understand exactly what needs to happen for you to make money and what could happen for you to lose money.

As others have said, with the limited information you post, it does sound like you may have been suckered in to some sort of investment fraud. Depending on the specifics about what they are doing, you may want to be talking with Federal law enforcement agencies if it looks like there is criminal activity in this.

If it does represent some sort of legitimate company and a real business has been built, then your position in the business might not be immediately liquid, but that should be very clear to you.

Have you looked at their books, before making your investment or now? What exactly were they going to do with your money when you made the investment? Do you know exactly how your money was used? How did they find you? Are you regularly involved in venture capital situations? Or did you respond to some advertisement about an "investment opportunity"?

wcc · 06:38 AM

Let me see if I can clarify some things for you guys.

This investment opportunity was brought to me through my accountant and other reliable sources. The person that represented the company put on a demonstration and we were allowed to see the companies financials. I let our attorney and our accountant look over the documents and they both liked what they saw and they even invested. They put in more than I did and they have received some money from the company, but I haven't seen a penny. Anyways, we invested the minimum amount just to try it out, because I kept saying the return on our investment was unrealistic and to me it was too good to be true. However all their documents supported the facts and the return.

The company buys real estate for oil exploration. They have offices here (MI), TX, LA, FL and some other places. Apparently from what I have heard through the grapevine, no real facts on this, but they made a bad purchase and there wasn't the amount of oil they thought was there. So now I do know that they are trying to sell the property. They keep tell me about these buyers and they string me along for months and then the deal falls through.

Now with the oil companies recording largest profits in history this company can't pay back investors. Just doesn't seem to add up for me.

I normally weigh the risks to the returns, but I also don't put out there more then I'm willing to lose. I guess that's a better way to put it. I've seen people go straight to the poor house cause of that.

I think that answers most of your questions.....

Like I said I already written off the money, it is just frustrating.

competentone · 11-01-2006, 06:54 AM

Quote:

Originally posted by wcc
The company buys real estate for oil exploration. They have offices here (MI), TX, LA, FL and some other places. Apparently from what I have heard through the grapevine, no real facts on this, but they made a bad purchase and there wasn't the amount of oil they thought was there. So now I do know that they are trying to sell the property. They keep tell me about these buyers and they string me along for months and then the deal falls through.

Now with the oil companies recording largest profits in history this company can't pay back investors. Just doesn't seem to add up for me.

When did you make your investment? If they were buying oil leases when oil prices were higher, those leases could now be near worthless since the price of oil has backed off its highs.

There are lots of places where there is oil in the ground, it just hasn't been worth the costs to drill and pump it out until recently when oil had its rally. If this company was buying high cost oil properties, now after oil prices have dropped back down, they are probably holding properties that have very little value.

If they can afford to continue to hold the leases they own, and if the price of oil goes back up, you might make money on your investment.

Of course, I'm still not sure why they needed you, or your accountant or lawyer, -- who I assume are not experienced investors in the oil industry -- for investment capital?

When you have people "promoting" to "the public at large" an "investment" in a sector of the economy that already has a great deal of professional investors in that sector, you need to be very careful about making any investment. If they couldn't sell their idea to the professionals already in the industry, and instead are looking to the public at large for capital, their idea probably represents a pretty poor "investment." The professionals in most industries know what works and what doesn't; they know the risk factors the "new ideas" present -- if they avoid an investment, chances are you should too.

wcc · 11-01-2006, 07:31 AM

We initially invested two years ago. It was a 6month investment. At the end of 6months they gave us the option to cash out or continue at the same rate of return for another 6months. We decided to keep it in there. After the second term of 6months ended we decided to cash out. Then all the excuses started. I wonder if we tried to cash out after the first 6months if we would have been paid or would the excuses have started then. Who knows.

Yeah, I don't know why they needed investments from the general public. This was out of my league, that's why I included my accountant and attorney to review the paperwork. Usually, I invest in funds, IRAs, stocks, etc.... I understand that stuff, but I'm all new at this type of investing. Believe me, I won't be doing it again. I don't like the stress involved, badgering them for payment, and most of all I don't like losing money no matter the amount.

I learned my lesson, so what are the steps I should take now? Do I even have any recourse?

competentone · 08:32 AM

Quote:

Originally posted by wcc
We initially invested two years ago. It was a 6month investment. At the end of 6months they gave us the option to cash out or continue at the same rate of return for another 6months. We decided to keep it in there. After the second term of 6months ended we decided to cash out. Then all the excuses started....

I learned my lesson, so what are the steps I should take now? Do I even have any recourse?

How were they supposed to generate the "return" they said you could make in 6 months? This still sounds like a scam, not any type of oil lease deals -- most legitimate investment in businesses will not be for just 6 month periods. It sure sounds like some sort of Ponzi scheme.

As for the next step, I'd be talking to your attorney. Perhaps a different attorney than the one who "invested" in this too. (This assumes your losses are significant enough to justify the cost of an attorney.) There may be nothing criminal that they've done, but things sure smell fishy from what you've related here.

Edit: Additional thought: There are two ways you can play it if your attorney tells you they have violated laws. You can either go to the authorities, in which case you'll probably get nothing back, or go to them and tell them that you've spoken with an attorney and he thinks they've violated such-and-such laws and that you're considering going to the authorities with that information if you don't get your money back. There is a slight chance you might scare them into giving you back your money.

pwd72s · 11-01-2006, 08:28 AM

Buy the old Jimmy Buffett Album "Coconut Telegraph"...play the song "Fins" over and over. Because man, you're a victim of a shark attack!

Sharks prey on those who generally deserve it...fools looking for a quick killing. Usually it's these fools who get killed.

One more time for all interested parties...BUY THIS BOOK!

The Bogleheads' Guide to Investing
by Taylor Larimore, Mel Lindauer, & Michael LeBoeuf
Wiley & Sons, publisher

Become an investor instead of a victim....

the · 11-01-2006, 08:47 AM

Quote:

Originally posted by wcc
We initially invested two years ago. It was a 6month investment. At the end of 6months they gave us the option to cash out or continue at the same rate of return for another 6months. We decided to keep it in there. After the second term of 6months ended we decided to cash out. Then all the excuses started. I wonder if we tried to cash out after the first 6months if we would have been paid or would the excuses have started then. Who knows.

I learned my lesson, so what are the steps I should take now? Do I even have any recourse?

Sounds like the classic Ponzi scheme.

At the end of 6 months, they will give you the option to cash out, and pay you with money from "investors" that came behind you, if they have it.

But the scheme generally works by them simply paying high "interest" to investors. Of course, this interest is coming from the principle of subsequent investors.

They give the aura of a legitimate business, but they really aren't.

Ironically, many of the victims seem to come from referrals from accountants.

Here is a recent one that sounds very similar to your situation. I knew some people that "invested" in this, and they did so because their accountant recommended it.

World Vision Ponzi

In that case, people were solicited to invest money on a short term basis, getting 12% return. Some people collected the returns for years. Of course, these interest payments were paid out of the money from subsequent investors.

Every Ponzi scheme eventually collapses, though, because people start getting nervous and demanding their money back. Some start applying heat, and it falls apart.

In the World Vision/Medical Industry Consulting/First South Financial Corporation scheme above, the entities were eventually put into bankruptcy, and a trustee appointed to try to salvage as much as possible for the victims. At the end of the day, the victims got about a 1% return. I guess getting $1K back out of $100,000 is better than nothing - but not much. There were criminal prosecutions,too, with many of them going to Fed prison for a long time, but that's not much comfort for the victims.

I know some considered suing the accountants that made the recommendation, but I don't know how that went. I think if this turns out to be a Ponzi scheme, you might have your best chance of recovery against your attorney's malpractice policy.

6 month investment, high interest rate, supposed ability to cash out but nonresponsive when you ask, TX and FL connections, and some of the other details you gave are all CLASSIC Ponzi scheme indicators.

wcc · 09:07 AM

That's a good idea. I'm related to a couple prosecuting attorneys so I'll show them the paperwork to see if they broke any laws. That's why I told the guy over the phone about the attorney general's office and BBB. It was a scare tactic to get them to pay.

If this is TRULY a scam and I've been taken, it was a good one. Cause like I mentioned that it came from a couple reliable sources and my attorney and accountant both gave it a green light and they liked it so much that they invested too. That's surprising and not your typical 'scam'. I feel bad for them if it is truly a scam cause they put in way more than I did.

EDIT: The - Interesting post. It sure sounds like that, all I can hope is it is a legitimate investment.

the · 11-01-2006, 09:04 AM

Some of the creditors need to get together and force the company into an involuntary bankruptcy. I think it only takes 3 creditors. A bankrupcty trustee needs to get in as soon as possible to take over, freeze everything and figure out what happened, and where the money went.

wcc · 11-02-2006, 03:15 AM

Quote:

Originally posted by Noah
This would be like a guy buying a parking lot and saying, "Well, Toyota is making a lot of money these days, so my parking lot is a guaranteed winner!"

I don't mean to be harsh, but if what you wrote above represents the level of thinking that went into this investment, well...not smart.

Well that's a stretch but I see what you're saying. But like I HAVE STATED NUMEROUS TIMES in this thread that this type of investment is OUT OF MY LEAGUE, therefore I had an accountant and an attorney to help me make an educated decision. I didn't research it much myself cause I followed the advice of my lawyer and accountant. I made mistakes and I'll admit it. No one's perfect. Their advice has been right on in the past, but this time following their advice was a mistake. So if you don't have anything constructive to add or ideas to what steps I should take now, please don't post. Your post does me no good.

Thanks to those that were helpful.

widgeon13 · 11-02-2006, 03:26 AM

You can take some capital gains (in other investments) up to a certain point to offset the lose, check with your accountant on that. That could be helpful as an end of the year tax strategy. Unless you can initiate a class action case I would expect legal action would be expensive and more than likely not give any return.

Good luck in the future.

pwd72s · 11-02-2006, 10:18 AM

Quote:

Originally posted by wcc
Well that's a stretch but I see what you're saying. But like I HAVE STATED NUMEROUS TIMES in this thread that this type of investment is OUT OF MY LEAGUE, therefore I had an accountant and an attorney to help me make an educated decision. I didn't research it much myself cause I followed the advice of my lawyer and accountant. I made mistakes and I'll admit it. No one's perfect. Their advice has been right on in the past, but this time following their advice was a mistake. So if you don't have anything constructive to add or ideas to what steps I should take now, please don't post. Your post does me no good.

Thanks to those that were helpful.

Bill, I agree with "the"..you got sucked into a ponzi scheme. Now, for the constructive advice. NOBODY, no lawyer, no accountant, no adviser, no broker, will care as much about your money as YOU. They do love the fees they get from you, though.

Self education is the key to successful investing. Keeping your own counsel, doing it yourself. PLEASE buy the book I mentioned earlier. It's written in a language anybody can understand, and the info it contains is valuable. This is a good starting point to becoming your own financial adviser.

widebody911 · widebody911's Garage

Go to home depot, get a 5g bucket, a 90lb bag of concrete and a shovel.

Problem solved...