Financial fraudulent schemes

Need for overcoming financial fraudulent schemes

Most investments are legitimate and the majority of registered salespeople are considered by the US customers to be honest. However, some salespersons are not honest and some “investments” are phony which once again present a fraudulent financial scheme. Everybody should thoroughly research any “investment opportunity” , especially if it is an attractive one prior to writing a check or wiring anyone money.

In the article by Thompson Richard called “The Need for overcoming the financial fraudulent schemes” it speaks about the fraudulent scheme called “High tech”. This is a very interesting financial fraud scheme that uses the phone soliciting or mail to lure the investors promising them guaranteed 100% to 100000% (or whatever) revenue over a short period of time. These people claim that such high returns are possible because of their gobbledygook technology that drastically increases productivity and revenues. These people usually state that such technology is equal to the invention of electricity, personal computer or an aircraft and therefore will not only change the face of the whole economy but will also provide high revenues for the everyone who wills to invest.

Satellite Broadcasting Corporation is the most famous case of this “high tech” scheme that claimed to sell a special technology and satellite dishes to people in another state. These people stated that they had support from another legitimate company and applied to become National Rural Telecommunications Cooperative members.

After the investigation took place it became known that the company did not have any license at all to engage in the high tech satellite dish business This scam was shut down by a joint state-federal action. What needs to be noted is the fact that people lost in this scam over 2.5 million dollars before the scheme was shut down, while the creators of this scheme got only a 3 year term in prison.

From this article I learnt that if purchasing a technology in some service area, one should make sure the licenses or marketing territories actually exist and are indeed owned by the legitimate company. One also should find out which companies are competing for the same area and for pure curiosity contact them and investigate the nature of the business and whether or not such opportunities are possible in the given industry.


Thompson, Richard, The Need for overcoming the financial fraudulent schemes, Harvard Business review, vol 12. 34a.

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