CORONAVIRUS

Iowans warned about bogus investment scams during coronavirus pandemic

Doug Ommen

Iowa Insurance Commissioner
Doug Ommen Iowa Insurance Commissioner

Federal and state agencies are warning Iowans of scammers taking advantage of the uncertainty surrounding the coronavirus pandemic to launch fraudulent schemes.

The Federal Bureau of Investigation is warning about phishing emails asking you to verify your personal information to receive an economic stimulus check from the government.

“While talk of economic stimulus checks has been in the news cycle, government agencies are not sending unsolicited emails seeking private information in order to send stimulus checks,” the FBI said in a news release. “Government officials already have your information.”

Iowa Insurance Commissioner Doug Ommen said scam artists are expected to begin initiating schemes that require little or no advance planning and minimal sophistication.

“Most will simply be old scams dressed up in new clothing,” Ommen said in a news release. “Especially in these times of market and economic challenges, investors must stay calm, keep their eyes on the longer term big picture and remain vigilant to protect themselves.”

The Iowa Insurance Division is particularly concerned about investments specifically tied to the threat of the COVID-19 virus.

They can be expected to develop schemes that falsely purport to raise capital for:

• Companies manufacturing surgical masks, gowns, ventilators and other medical equipment

• Businesses distributing small-molecule drugs and other preventive pharmaceuticals

• Companies manufacturing vaccines and so-called miracle cures.

The Iowa Insurance Division and the FBI warn that scammers also will seek to take advantage of concerns with the volatility in the financial markets to promote “safe” investments with “guaranteed returns,” including investments tied to gold, silver and other commodities; oil and gas; and real estate.

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Investors also can expect to see schemes that tout quickly earned guaranteed returns that can be used to pay for rent, utilities or other expenses.

These schemes target retirees and seniors, claiming they can quickly and safely recoup any losses to their retirement portfolios.

“Investors should stay clear of anything sounding too good to be true, such as guarantees of high returns with no risk,” Ommen warned. “Iowans can double-check with our office to make sure the investment and the person offering the investment are properly licensed or registered.”

The Iowa Insurance Division can be reached at iid.iowa.gov or at 1-877-955-1212.

Some other financial schemes to be aware of include:

• Private placements and off-market securities, which are not subject to review by federal or state regulators nor are subject to due diligence by a broker-dealer or investment adviser. Investors should only invest in private offerings when they understand the investment and have independently verified the facts.

• Fraudulent investments in gold, silver and other commodities, which may be promoted as “safe” or “guaranteed” as they are not tied to the stock markets. Scammers may conceal hidden fees and markups, and the illiquidity of the assets may prevent investors from selling the assets for fair market value.

• Get-rich-quick schemes that tend to surface when the unemployment rate rises. They falsely tout their ability to quickly earn guaranteed returns that can be used to pay for rent, utilities or other expenses.

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Our most important Coronavirus coverage is free to the public.

If you believe local news is essential, especially during this crisis, please donate. Your contribution will support news resources to cover the impact of the pandemic on our local communities.

All donations are tax-deductible.