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New Study: Florida Ranks No. 2 for Investment Fraud — 4 Scams to Avoid in 2023


new study finds Investment fraud has become the No. 1 costliest type of fraud in the U.S. with a record $3.82 billion stolen in 2022, up from $1.6 billion the previous year.

Florida ranks No. 2 losing $306 million to investment fraud in 2022.

This alarming trend is leaving average hard-working Americans financially devastated; seniors lost nearly $1 billion last year forcing many to sell their homes after working their whole lives to accrue enough money to retire; and even multi-million-dollar professional athletes—including the NFL, NBA, MLB and NHL—were left bankrupt after losing $585 million from 2004-2018.

Carlson Law, an investment fraud law firm, released its first annual study on the State of Investment Fraud in 2023 after analyzing data from the FBI and the FTC released in 2023.

Three metrics were analyzed in all 50 states and D.C., including the total number of victims and monetary losses, highest average losses per victim, and highest rates of investment fraud.

Victims in Florida lost an average of $136,523, the No. 13 most in the nation, while the state has the No. 7 highest rate of investment fraud with 10.3 complaints filed per 100,000 residents.

The unprecedented rise is due to crypto-investment scams which stole a record $2.57 billion last year; traditional methods such as Ponzi and pyramid schemes; and artificial intelligence ‘deep fake videos’ and ‘voice cloning’ make you falsely believe you are investing with someone you know and trust.

The 10 states that lost the most money overall include California ($869M), Florida ($306M), Texas ($235M), New York ($173M), New Jersey ($110M); Maryland ($98M), Washington ($97M), Arizona ($88M), Illinois ($75M), and Massachusetts ($75M).

Additional Key Findings:

  • California Most Impacted Overall: Ranks first for total money lost ($869 million), second for average loss per victim ($176,463), and fifth for highest rate of investment fraud with 12.6 per 100,000 residents.
  • Smaller States Have Highest Losses Per Victim: New Hampshire ranks No. 1 ($204,447 lost per victim on average). Smaller states such as Nebraska ($163,565), Wyoming ($161,472), and Kansas ($156,790) also made the top five.
  • D.C. and ‘DMV’ Area Have Highest Rates of Investment Fraud: D.C. ranks first with 26 victim complaints filed with the FBI per 100,000 residents in 2022. Investment fraud in the “DMV” area happens frequently with Maryland ranking second (17.5 per 100,000) and Virginia No. 18 (6.7 per 100,000).

4 Types of Investment Fraud to Avoid in 2023

1)      AI ‘Deep Fake’ and ‘Voice Cloning’ Fraud: A woman lost $750,000 after watching a video of billionaire Elon Musk which convinced her to go to a website and buy shares of stock. She invested and received documents showing huge returns on her investment. Unfortunately, the video was an AI-generated deep fake that used voice cloning technology and her money was stolen.

How to Avoid: Signs of a deep fake video may include excessive blinking, no blinking, or changes in skin tone and lighting. Be wary of videos from celebrities offering investment opportunities.

2)      Crypto Initial Coin Offering: Similar to an IPO, a company seeks to raise capital for an ICO that promises high returns on an innovative project that does not exist. They use fake websites and whitepapers to lure investors into buying tokens. Once you invest, they disappear, leaving you with worthless tokens.

How to Avoid: First, put the founder’s image, email, and phone number into a reverse search platform to confirm their identity.  Then, thoroughly research them, and be skeptical of ICO’s.

3)      Real Estate ‘Phantom Property’: Real estate agents create property listings for a lucrative real estate investment opportunity. They have fake permits and titles to look legitimate, but it is a phantom property that does not exist.

How to Avoid: Documents may have visible deletions, alterations, or use different handwriting and font. Visit the property before investing and research the agents involved.

4)      Ponzi Schemes: Made famous by Madoff, an advisor promises high returns to attract new investors. No investments are made, however. The returns are paid using money from new investors. The scheme collapses when new investors can no longer be found.

How to Avoid: Red flags include guaranteed returns, secrecy, and lack of transparency.

If you believe you are the victim of investment fraud, file complaints with the SEC,  FTC and the FBI.

If your money cannot be recovered by the government consider speaking with an investment fraud attorney. Many are willing to work on contingency and only get paid if your money is recovered.