Posted by:
mrx
(
)
Date: September 08, 2020 09:46PM
First my Egyptian joke: why did the Egyptian Kings stop building great monuments?
They found out that the whole thing was a big pyramid scheme
https://www.deseret.com/utah/2020/9/8/21427396/fraud-utah-ponzi-scheme-rust-rare-coin-federal-prisonThe article indicates that over 700 investors lost over $150 million, but the total lost is believed to be over $200 million. Some $$$ has been / will be recovered. Remember Bernie Madoff? After many years of effort, almost 2/3 of the money was recovered, which is considered a tremendous accomplishment.
History: Gaylen Rust's father ran an honest coin shop which was started in 1966. Gaylen took over, and couldn't resist the temptation to con "friends and family" out of their money in a classic ponzi scheme.
For many, many years, the Rust family convinced people to invest in a "silver trading scheme" where they would profit (average 20% to 25% per year) from strategic leveraged silver investments, taking advantage of the ups and downs of the silver market.
Rust founded Legacy Music Alliance, which sent quite a bit of money to arts programs in Utah schools.
Denise Rust (ex-wife of Gaylen) wasn't the brightest bulb in the string of lights. She didn't catch on to the many mistresses, even signing over $3 million of checks going to one of the mistresses. She claims she didn't know the thing was a big fraud, even though the "statements" were little more than excel spreadsheets created by Gaylen to show the investor "profits".
As late as 2018, more money from unsuspecting victims was sought to cover the withdrawals of previous investors, who thought they were actually making money.
AFFINITY FRAUD
This type of fraud is common in Utah because LDS people (formerly "Mormons") are trusting of fellow active Mormons, even though Utah scams have been going on for many, many decades. AAMOF, the Mormon religion is actually a scam started in 1830.
People with something in common (such as religion), convince fellow members to invest in a great opportunity to make great returns with little risk. Rely heavily on "word-of-mouth" recommendations. The victims come to believe that they are special, because they are invited to make money in the pooled investment program.
HOW TO BE SUCCESSFUL WITH AN SLC AFFINITY FRAUD:
-- appear to be a good active LDS family, with decent kids, and honest LDS relatives
-- donate a bunch of money to local charities, and make sure to brag about the charitable activities
-- "word-of-mouth" popularity amongst the LDS community
-- issue bogus excel spreadsheets instead of legitimate statements- don't worry- the sheep will be too stupid to suspect
-- pay off the earlier investors (with money from later investors), thereby creating "solid credentials".
https://www.considerable.com/money/retirement/3-signs-that-you-cant-trust-your-financial-advisor/