Local residents fall victim to illegal investment scheme
by TIMOTHY MITCHELL - Ravalli Republic
The Bitterroot Valley has some victims or potential victims of a pyramid scheme being investigated by Montana State Auditor's office.
"We have received reports that residents in Ravalli and Hill counties have been solicited by companies that may be participating in what appears to be a pyramid scheme involving offshore investments promising extremely high returns," according to Montana State Auditor's Office Communication Director Stacia Dahl.
The group uses the names of Caruba International, LLC of Plantation, Fla., or Tradewind Holding Co. of Aruba, Fla. Neither company is registered to conduct business in Montana.
"Montanans should look for specific warning signs when presented with an investment opportunity," wrote Montana State Auditor John Morrison.
"Red flags include: 1) 'guaranteed' double-digit returns, 2) promises of high yields over a long term, 3) 'risk-free' investments and 4) salespeople emphasizing the exclusivity of an investment opportunity and the importance of keeping the investment a secret from friends and family."
Undersheriff Kevin McConnell called it a typical scam.
"There is a lot of language that is right out of the scam manual," he said.
Like other pyramid schemes, individuals are approached to participate and must be recommended by someone else. Once they agree they are given a Web site and a password, according to McConnell.
"It looks legit, but it isn't," he said.
Anyone who has been approached to participate or who has questions, information or who believes they may be a victim of the pyramid scheme is asked to call the Montana State Auditor's office at 1-800-332-6148.
A cease-and-desist order was served on at least part of the group in Alabama, according to Dahl.
"Never send money out without looking into it," McConnell said, "Not everything on the Internet is real."
Typically, pyramid schemes require more and more people to get involved, paying to participate and the funds of the newcomers go to enrich those involved in the scam earlier on.
Morrison reminded everyone that they could face criminal charges if convicted of promoting a pyramid scheme.
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