INVESTORS LOSE BILLIONS IN STOCK SCAM
VICTIMS WORLDWIDE

NEW YORK, NY… October 22, 2003...

Kessler International, the premier international forensic accounting and corporate investigative strategies firm, announced today the results of a six month investigation into an organized crime entity which has bilked investors out of billions of dollars and is growing. The scheme involves identity theft by corrupt venture capital firms, the establishment of a fake professional association by the fraudsters to legitimize their scam, the sale of fake investments by boiler room operations, and the use of mail drops and high pressure sales tactics.

Kessler’s investigation which has only touched the tip of the problem has already revealed at least six corrupt venture capital firms which have or are taking countless numbers of investors in the United States, Europe and Australia of their hard earned cash by lying about their firm’s reputation and expertise. A number of these so called firms have simply copied the website text including biographies and pictures of prestigious venture capital firms and changed the names to their liking to make themselves appear legitimate.

HOW IT WORKS

According to a number of victims interviewed by Kessler’s staff and investigation of various documents, the victim usually receives either a cold call from a smooth talking salesman touting an investment to good too be true or an unsolicited e-mail. They gain the trust of the victim by describing the firm’s past successes and amount of research that goes into every offer. The firm they are working for usually appears prestigious using international offices (which very often are mail drops or virtual offices so the fraudsters cannot be traced) and a fancy website.

During the first call the salesmen usually does not attempt to sell anything but instead requests permission to call again. In subsequent telephone calls they begin to tout certain companies and encourage the victim to take advantage of a great investment or otherwise lose out on a "guaranteed" high return investment. Usually they indicate that the offer is only available to a select group.

This syndicate has even established a fake professional association website mirroring the website of a legitimate venture capital association. The member list of this association was stolen and the corrupt company’s name inserted among the prestigious firms. When the victim asks for references to check out the investment, they are directed to this fraudulent website.

When the victim is ready to invest they are told to make a wire transfer to an overseas bank account and then are usually besieged with telephone calls to increase their investment.

After obtaining funds in an amount the fraudster feels the victim will invest the victim usually never hears from the salesman and attempts to reach him or obtain information about their investment go unanswered.

AVOID BEING A VICTIM

Michael Kessler, CFE CrFA the President and CEO of Kessler International suggests that any investor follow these simple guidelines before making an investment into an unknown entity.

• Be cautious of "guaranteed returns," "No Risk" and "secret" investments.
• Ask questions about the investment and beware of promoters that do not answer all of your questions.
• Research before investing. Use the Better Business Bureau website, the SEC, and the NASD websites and the various state regulatory agencies websites and look for fraud alerts. Use a search engine seeking information about the company you’re dealing with as well as the company you’re investing in. We have found that many websites list horror stories from victims which, if researched prior to sending cash would have saved some peoples’ life savings.
• Don’t share personal information with the caller until you know who you are dealing with.
• Don’t wire funds overseas.
• Most important: Follow your instincts, and when in doubt "JUST SAY NO."