CA Issues Warning on Investment Scam
Boiler-room operators are calling consumers to offer unrealistic promises of double-digit returns -- up to 45 percent -- on investments in the centers, according to the California Corporations Commission. The scam artists then skim off the top of the promised return and more in sales commissions, the agency said.
In one case, the California Department of Corporations filed a civil suit against an operation that assured investors that no more than 7 percent of their money would be used for sales commissions. In fact, the operators took as much as 47 percent of the investors' money for their sales commissions, according to the department.
The department is investigating other, similar cases involving $3 million to $5 million each.