How To Avoid Losing Your Credit
The Salt Lake Tribune has an interesting story about how a $20,000 scam costs victim much more.
According to the story, "Dan Anderson did not lose his money in some sophisticated Ponzi scheme or extravagant securities fraud. The scam Anderson succumbed to was simple: He gave $20,000 to a business associate to invest, but the associate spent it on things such as rent and a boat. He claimed he was putting the money in a mutual fund but he just out and out took it," said Charlene Barlow, an assistant Utah attorney general."
Interesting, but how does the $20,000 become "much more.'? Well, " Anderson said he met Jones in the summer of 2003. Jones was operating a Salt Lake City-based business called Monarch International Holdings Inc., which brokered freight loads over the Internet. Anderson's brother and cousin were partners in the company. The businessmen asked Anderson if he would like to obtain capital for Monarch. Anderson said he had no experience in venture capital or investments. His background was in sales. But Anderson's credit score was good and banks would issue loans that he personally guaranteed. In return for the capital, Anderson said, Jones and Monarch agreed to pay him monthly fees through which he could repay the debts. Anderson also became an officer in the company. " (my emphasis)
Oops, this story is not going to have a good ending.
" In March, Jones pleaded no contest to one county of securities fraud. A judge on April 27 sentenced Jones to six months in jail, three years of probation and ordered him to begin repaying Anderson the $20,000. But much damage has already been done. Anderson filed personal bankruptcy in May 2005. Between the bogus investment, the loans for Monarch and personal expenditures, Anderson and his wife accumulated $481,000 in liabilities, according to the bankruptcy filings. That was about $150,000 more than the couple's assets. Anderson was able to keep his house and car but is trying to pay back his creditors. Anderson said he wants to make sure Jones will not try to scam anyone else. "If this guy gets out in six months, I'm thinking he's going to go right back to doing this," Anderson said. "I'm trying to help people avoid being victims in the future, especially with Dale Jones," Anderson said."
Hmm, six months and Dale is off to the races again. Be good to remember this name, "Dale Jones".
