Self-directed IRAs are a legitimate retirement technique that permits people to invest their IRA money in real estate, precious metals, private placement securities and a number of other types of investments not generally found in typical IRAs which usually are limited to stocks, bonds, mutual funds and Certificates of Deposit. In order to have a self-directed IRA, you need a custodian for the IRA just as you would with a more traditional IRA. Unfortunately, scammers are using self-directed IRAs to foist phony investments upon unwary investors. In addition, since most IRAs, as retirement accounts are generally left to grow and not accessed for years after being set up, the scammers have more time to avoid detection of their crime.
TIPS
You should investigate any investment you are considering before investing and your investigation should include looking into not only the legitimacy of the investment, but also the person who wants to sell it to you. Be wary of unsolicited investment offers. Check out the investment and the promoter of the investment with the SEC at http://www.sec.gov and with FINRA at http://www.finra.org. FINRA is the biggest regulator of securities sellers in the country.