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Investors and the business community lose billions of dollars annually to swindlers. While Law Enforcement will take a complaint, they rarely investigate complaints that concern less than $100,000. Prosecutors rarely file charges in cases that involve less than $1,000,000. In the few cases where charges are filed, the Government isn't seeking to force the swindlers to refund the victims money.

Anyone can sue anyone in America. However, swindlers are almost always judgment proof. While most charlatans spend the pigeons money as fast as they steal it, the few who save money for a rainy day do so beyond the reach of the Courts. While there are ways to recover your stolen money, a civil lawsuit isn't one of them.

Investment and finance are areas in which an ounce of prevention is worth more than a pound of cure. The rule is always investigate, investigate and investigate.

Here are a few of the red flags that investors and business people should use as warning signals that the deal isn't to their benefit.

1. A lack of written information about an investment or a business offer is always associated with a scam. If they won't put it in writing, don't give them a dime. Swindlers use emotion and not facts to fleece their prey. Once there is a written plan, have a qualified person review it for factual errors. If your reviewer finds one misstatement of fact, don't invest.

2. If you don't understand the offer, the odds are there is something wrong with the offer. At best, the person making the proposal has failed to clearly grasp what they think will work. At worse, it's a scam.

3. If a boiler room (phone call) junk mail or spam is offering it, avoid accepting the proposal. If you are on the FCC and FTA "No Call" lists, boiler rooms are violating the law by calling you. Do you really want to do business with someone who opens the discussion by committing a crime? Spam is illegal and the same issue of doing business with a proven criminal applies.

4. If the principals in the offer don't supply detailed resumes be very wary of the proposition. A telltale sign of a swindler is someone who moves every two or three years. It usually takes two or three years of scams to force the career swindler to seek greener pastures. The rule is don't send money to people who move often.

5. If you are being pressured to invest now or act now, avoid accepting the offer. If you aren't given time to fully investigate, you should not invest.

6. Be wary of promises of quick profits. The adage that the greater the potential profit means the greater the actual risk is almost always true. If all they want is your money, the odds are that you are about to lose your money. There are solid high yield offers, however they expect the participants to do money then send their money.

7. Be very wary of HYIP (High Yield Investment Programs). Almost all of them are scams. Words like "guarantee," "high return," "limited offer," or "as safe as a C.D." are red flags. No financial investment is "risk free" and a high rate of return means greater risk.

8. Be wary of offers than include "insider" information. Ask yourself why you are being given access to information that the insiders can use to make money. If your answer isn't very believable, the odds are the information is a scam. There are always lots of phony "insider" information floating around the stock market. Almost always this news is false. Someone is using it to dump his or her stock on the gullible.

9. Avoid proposals that are based upon secrecy. If you can't discuss the information and concepts with others, you have no way to effectively evaluate the proposal. Don't risk your money.

10. You can make a great deal of money offshore. However, there is no Government regulation of the Global Village. Governments are far less likely to act upon complaints by non-Nationals and catching the Global Village Swindler is usually impossible. Either find an experienced guide to the Global Village or avoid getting involved in deals outside of your country.

Seek outside advice whenever you are considering a significant investment of your risk capital or your firm's money. If the questions are legal, ask an attorney. If the questions involve the financial statement, ask an accountant. If the questions involve the potential of the offering being a scam, ask an equity finance consultant. Avoiding scams is essential if you expect to build your nest egg or grow your company.

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