Recently, Michael Ackerman was convicted in federal court of operating a cryptocurrency scam in which he and two partners scammed investors out of 30 million dollars by falsely claiming that his cryptocurrency investment fund would produce monthly returns of more than 15%.  Ackerman told his investor-victims that he had developed a unique algorithm that allowed him to invest and trade in cryptocurrencies including Bitcoin and earn tremendous profits.  In particular, Ackerman targeted physicians as investors/victims who were contacted by one of his partners who is a physician.  The truth is that Ackerman never delivered on his claims, falsified records that he used to lure investors to make it appear that his fund was profitable when it was not, and stole much of the money invested to fund his own lavish lifestyle.  Ackerman, who is facing as much as twenty years in prison, will be sentenced on January 5, 2022.


Before investing with anyone, you should investigate the person offering to sell you the investment with the Securities and Exchange Commission’s Central Registration Depository.  This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her.    You can also check with your own state’s securities regulation office for similar information.  Many investment advisers will not be required to register with the SEC, but are required to register with your individual state’s securities regulators.   You can find your state’s agency by going to the website of the North American Securities Administrators Association. Many investment advisers will not be required to register with the SEC, but are required to register with your individual state securities regulators.  You should also check with the Financial Industry Regulatory Authority (FINRA) for information about the particular  investment adviser.  If investors had looked into the history of Ackerman, they would have found that he had let lapse several important securities licenses.

It is also important to remember that you should never  invest in something that you do not completely understand.  This was a mistake that many of Bernie Madoff’s victims made as well as the clients of Michael Ackerman. Cryptocurrency scams quite often involve complicated language and investment terms that is purposefully unclear in an effort to confuse potential investors from understanding the real facts. You also may want to check out the SEC’s investor education website at  Scammers can be very convincing and it may sound like there is a great opportunity for someone to make some money, but you must be careful that the person making money is not the scam artist taking yours.

There are many different investment scams, but generally, people often become victims of investment scams when, such as here, they invest in things that they don’t understand, fall victim to affinity fraud by investing with someone merely because they share a similar background, which in this case was physicians, invest with someone who is both the broker and the custodian of the asset which enables the scammer to be able to control the investments and the records of the deposits or fail to investigate the investment advisor before investing.

In addition, as always, if the investment sounds too good to be true, it usually is.

For those of you receiving the Scam of the day through an email, I just want to remind you that if you want to see the ever increasing list of Coronavirus scams go to the first page of the website and click on the tab at the top of the page that indicates “Coronavirus Scams.”  Scamicide was recently cited by the New York Times as one of three top sources for information about Coronavirus related scams.

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