Saturday, July 23, 2005

Can a $98 Investment Be Worth Over $15,000 a Year Later?

In the "If it sounds too good to be true, it is" category, an AP story (here) describes the scheme that triggered an indictment:

Richard J. Dompier of Vale, N.C., started the New Millennium Group in Roseburg in 1998, selling one-ounce silver ingots through the mail and over the Internet for $98 each on promises buyers would receive a series of commission checks totaling $15,853.50 in 14 months, the indictment said. He had bought 70,000 ingots from the Franklin Mint for $10.50 each.

Dompier was charged with cheating investors out of $2.5 million, and apparently used some of the proceeds to sponsor a NASCAR driver and to start a motorcycle company.  No commodity, particularly silver, can increase 15,000% in a little over a year, unless of course it's a scam.  One wonders if any of the investors remembered the Hunt brothers and their little foray into cornering the silver market back in the late 1970s, only to see their investment collapse. (ph)

Fraud, Prosecutions | Permalink

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