You re all likely familiar with these two schemers that garnered a great deal of media attend in 2008 and 2009.

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2 Bernie Madoff vs. Earl Jones. Would you have been duped? Would I have been duped? Let s explore. You re all likely familiar with these two schemers that garnered a great deal of media attend in 2008 and Bernie Madoff masterminded what is considered to be the largest financial fraud in US history, defrauding investors of an estimated $65 billion dollars, where Jones defrauded 158 people, mostly seniors, of more than $50 million dollars. 2

3 Knowing what I know, being in the media and years in the industry, many people have asked me if I would have been diligent enough to not have been scammed by Madoff and Jones. Let me paint you a picture of both. MADOFF: Let s start with Madoff first here s how it might have gone down. He was a master at creating a cult like web. I would have been at one of his parties all my friends much smarter hedge fund managers, head of charities after all, Madoff was the former chair of the NASDAQ and well respected. Celeb s could I be part of it. No. Call a week later yes, I m in. Wouldn t have done due diligence. Just 10% not totally off the radar. But Earl Jones What are you licenced to sell? Nothing or he would have lied. RCMP call cries for catching these guys, but no one can police everyone that hangs there hat out there to be a FA 3

4 Before I continue, I'll just back up and give you a brief background on myself Was in the financial industry for over 12 years a good portion of that advising HNW at one of the big banks and then had my own firm sold in 2005 to fulfil my own WHY in teaching and supporting what I call Foundational Financial Planning will explain by the end of my talk but why were my clients so messed up with money? I had a client that was worth over 100 million dollars but he wouldn t turn his heat up in the winter and twice, burst his pipes. Hint he lived through the depression. The antithesis was another client I had a baby boomer professional that made a million dollars net a year and was two million dollars in the hole That s why I wrote 9 books Have conducted thousands of media interviews Speak and train for corporations across Canada & U.S. 4

5 My last two books were published by the Chartered Professional Accountants of Canada I did two very extensive national media tours for them and the same question kept popping up from media Why is financial literacy still an issue in 2014? And not just for the average Can for very high net worth as well. I ve done several national tours for private banks to their clients on the basics just because you ve been successful with your investments or sold your business for millions, doesn t mean that you know how to protect yourself from scammers, protect your identity and more. 5

6 I think there s three reasons why So, the three reasons why are 1. overwhelm 2. trust don t know who 3. stigma So why is it still an issue in 2014? I think there s three reasons why And doesn t matter if you re a regular investor, super HNW, sold your biz for $20 mill Overwhelm too much Still an old taboo Don t know who to trust so we do nothing or don t seek advice when we really should 6

7 And why you should care about fraud no matter your age or other specifics in this room because it s changing Even if you re not online, your info is IIROC security breach, our government info mailed out It s all about organized crime Third world countries coming online like never before Easier for the criminals to gather your info over time by what you share and they find They ve very patient who am I to be concerned we all have to be Even if you use 100% cash, you re not protected, and it s tough to live that way booking travel, parking garage or meter we have to have credit 7

8 It s growing in cost my research with the Canadian anti fraud centre For this talk, I involved countless branches to get info on the impact no one knows because only 5% of people report it Remember I said about taboo there s a real embarrassment and shame with fraud young or old but if the latter, scary as you don t want your kids to take power away from you so seniors say nothing. I want that to change so let s learn for ourselves, kids, friends and family, how we can recognize, avoid and report fraud so it can be stopped and Ottawa knows the scope so they can enforce tougher laws. 8

9 Types of fraud I ll cover Many types of fraud and I wrote an entire book on it with 6 months of interviews Not a topic that I can cover in 30 minutes Will give the top frauds, how to spot the red flags and what you can do to protect yourself For you and your family and friends think of my info for your kids, parents, friends and other relatives to protect them We have to become more vigilant against the bad guys and report it! 9

10 Types of fraud I ll cover Many types of fraud and I wrote an entire book on it with 6 months of interviews Not a topic that I can cover in 30 minutes Will give the top frauds, how to spot the red flags and what you can do to protect yourself For you and your family and friends think of my info for your kids, parents, friends and other relatives to protect them We have to become more vigilant against the bad guys and report it! 10

11 You might think that you would never be taken by an investment fraudster, but many of these frauds are affinity frauds, which means the swindler uses their closest contacts, either socially or in business, to create and grow the fraud. We already examined Madoff and Jones and they serve as a lesson to us all to be vigilant when investing our money. There s other types of investment scams such as pump and dump, offshore, securities fraud, Ponzi schemes, bad land deals and more So how do you avoid these? There s some obvious red flags 11

12 Uncle John 2 nd mortgages Elizabeth mortgage broker 5 minute google search would have saved her $150,000 12

13 Meet Krez He invested his life savings in an investment run by the Harvest Group of Companies the founder by Pastor Ron Aitkens bilked investors for over a ½ billion dollars Investors lost more than Krez many mortgaging their homes to invest in what was supposed to be real estate development They don t know where all the money went it was misappropriated and they acted in a Ponzi scheme fashion Krez thought the economy was riding high on oil and gas and wanted to get in How can I go wrong investing with the right people this is what Canada is all about 13

14 Only a formality flashed that it was guaranteed every penny they had could see the dream coming true could reach out and touch it Now his wife has cancer and he can t get any of his money to pay for the experiment medicine that could save her life 14

15 Put your trust in your faith but never trust anyone 100% of the time when it comes to your money These were pastors were they mules or were they in on the scheme? Who do you trust when it comes to your money? No one not fully Some that aren t scams but not fully legit: Reverse mortgages Leveraging Life insurance as an investment Land deals Cashing out in tough times 15

16 There s not get rich quick The promoters of BreX, Nortel or Ponzi schemers will appeal to the sense of wanting a short cut but we know it never lasts Need to know the averages what s realistic for a return Harry Markowitz risk vs. return at a certain point, no more return for the risk you re taking 16

17 1. Charitable donations 2. Nigerian letter 3. Phishing JP Morgan 4. Lottery pitch 5. Telemarketing 6. Microsoft scam 7. Credit card interest rate reduction 1. My mom gets many calls that I don t 8. Dating and tug at the heart string scams 17

18 Don t have time to go into a major trend in crime cyber crime from our computers to our phones to our fridges, head modulators and even toilets in Japan don t have time for this My friend Dr. Keenan when Edward Snowden broke we have to care about our online presence because it can be used against us RFID chip readers in 2010 when I was doing my first national tour now using nano technology to spray gps trackers on you going through certain airports for security. 18

19 1. Conducted interviews for my book with over a hundred experts and some of those were the head of the fraud departments for various police forces. 2. The Vancouver police force revealed that this is one of the fastest growing frauds in their city 3. That embezzlers are not hired, they re made. 4. They poke around, stick around, bring in friends and family into the company and see how far they can take it 5. I ve seen the effects of exactly that with a close family member who had two companies grossing several million dollars per year to wondering if he can keep his doors open a few months from now. 19

20 1. Another fraud trend from the head of the Niagara fraud department is POA fraud 2. Again, not always starts with it but a friend, family member or neighbour (or Earl Jones) sees how far they can get 3. If you are aging or have aging parents or friends, it s imperative to get this documents in order and determine your advocates financially and for health care 4. Get a supplementary card for parents needing help with purchases 20

21 1. Investment fraud 2. Mass marketing fraud 3. POA fraud 4. Mom & Pop fraud 5. Title insurance fraud 6. CC fraud and security breaches 7. ID theft 1. Friendly fraud Kids SIN, etc 21

22 1. Investment fraud 2. Mass marketing fraud 3. POA fraud 4. Mom & Pop fraud 5. Title insurance fraud 6. CC fraud and security breaches 7. ID theft 1. Friendly fraud Kids SIN, etc 22

23 1. Investment fraud 2. Mass marketing fraud 3. POA fraud 4. Mom & Pop fraud 5. Title insurance fraud 6. CC fraud and security breaches 7. ID theft 1. Friendly fraud Kids SIN, etc 23

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25 If you ve been a victim How important it is to report You might feel embarrassed or shame don t! Organizations and people to help even the smartest get scammed 25

26 When you need a professional Who should you look for? The cost of not hiring a pro (create a graphic vs. cost & potential loss) You still have to vet them don t take referrals from the person who s selling you a product, idea or service 26

27 When to use an advisor Why we don t like to pay for advice (as they do in the US) How to find an advisor How to check out an advisor 27

28 Financial clutter Cash on hand, in your home Home safe, safety dep box List of bills and when, paperless? Shredding Securing doc s What s in your wallet? 28

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