Walt NettJanuary 7, 2012 - 11:40pm
Nett: Iraqi currency investment scam steals into Hub City
Just back from a week’s enforced time off — the demise of Alfred the Truck at age 16 led to a scramble for reliable, well-used transportation between Christmas and New Year’s — I came back to an email from a lawyer at one of the city’s larger firms, asking if I’d consider a story about an investment scam that seems to be playing out in Lubbock.
I was hoping he could convince one of his clients to go on the record about it, but as of this writing, no luck. If someone changes his (and I’m pretty darned sure whoever was doing the thinking on this was male, for reasons detailed below) mind and wants to talk, we’ll do that story, too.
Nevertheless, it’s enough of a situation something needs to be said, because nobody else needs to get hurt.
According to the lawyer, two of his clients have come in with tales they’re about to become millionaires by investing in the Iraqi dinar.
Supposedly the government is about to re-monetize the currency, and what they’ve bought for several thousand dollars will be worth a whole lot more.
“The perpetrators also put out a newsletter telling them (potential investors) that it is about to happen and they need a good tax lawyer to draw them up a trust to save income and estate taxes,” the attorney said in the email.
The promise, it seems, is that if you buy dinars and they appreciate to pre-Gulf War price levels, you can make big money fast.
But there’s a catch. At the present time, there’s no market outside of Iraq for the dinar. It’s only redeemable in Iraq, and apparently it’s illegal to take the currency out of the country.
There are some other details, as in the idea that Saddam Hussein’s government set the exchange value of the dinar by fiat, rather than allowing it to float amid market forces.
As the state of Washington Department of Financial Institutions warns: “What consumers are not told is that the Dinars can be redeemed only in Iraq, as most of the established currency exchange houses and banking institutions cannot convert the Dinar to U.S. dollars. Since no exchange exists for the Iraqi Dinar, dealers can charge whatever they want to sell and buy back the Dinars.”
In other words, heads they win, tails you lose.
And it’s an old scam — old enough that dirty deals with dinars ranked second on the securities division of the Utah Department of Commerce’s top 10 fraud lists for 2006.
Here’s the thing. Any offer involving a lot of trumpeting about getting rich quick is usually bogus.
It pays, perhaps, to remember, that in the old days, the success of a ripoff artist relied on the fact that we weren’t a global village, and you could keep a con going from city to city as long as you got out before the marks figured out they’d been had and beat that news to the next place along the way.
The telegraph began to change that by enabling information to move faster than a galloping horse.
Thanks to the Internet, there are tons of ways to check on things like this. There’s even an article on the national Better Business Bureau website detailing the dinar hustle and why you should keep your greenbacks out of the deal.
As noted above, the lawyer didn’t identify the clients. And I opined above, the person making the deal was more than likely of the male persuasion — well-educated white males.
Yep, and we all know why that is. Someone makes a pitch that appears to have some basis in reality — and the Iraq economy’s had a whole boatload of changes in the past decade or so, as we all know.
The pitchman sounds knowledgeable, so of course, we don’t want to appear behind the curve on a current interest story, so we give out with the “un-huh, yeah, I heard about that” even though we have absolutely no idea what the guy’s talking about.
And about that time, the wisdom that “the only stupid question is the one you don’t ask” disappears.
We’re victims of the hunter-gatherer caveman thing, here, gentlemen. Yeah, guys still go hunting together, but it’s not like we’re trying to take down a woolly mammoth so everyone on the village has meat in the pot.
Nevertheless, something ancient and imprinted deep in the brain says, “this is MY mammoth to provide for my family.”
And we set aside caution and common sense, paying no attention to all the possible snares and pitfalls.
C’mon, guys. It’s OK to read maps, it’s OK to ask a stranger for directions. Holding your wife’s purse while she’s trying on clothes, well, that’s up to you.
But it’s your money, your family’s resources. If the deal sounds too good to be true, it usually is. If someone’s yelling “Act now and avoid the rush,” that’s too much pressure.
Sleep on it. Do your due diligence.
It’s your money. Take care of it.
Next time someone offers you a deal on Iraqi dinar, ask ’em if they’d trade some dinar for a Hertz donut or a nice Delaware punch.
A trend both subtle and disturbing emerged from some CoreLogic’s recent report on local foreclosure rates — both 90-day delinquency and foreclosure rates have gone up since October 2010.
They’re still low compared to the state and national numbers, but up is still not a good way to go.
According to CoreLogic’s review of October 2011’s figures, 0.97 percent of the mortgages here are in some stage of foreclosure activity, compared with 0.83 percent the previous year.
The foreclosure rate in Texas, still among the nation’s lowest, was 1.51 percent, up from 1.36 a year earlier. The national foreclosure rate was 3.51 percent, up from 3.29 percent in October 2010.
The 90-day delinquency rate — a figure that combines mortgages three months in arrears, in foreclosure and on the lender’s real estate owned portfolio, was 3.18 percent in October, up from 2.82 percent a year earlier.
The state’s delinquency rate fell from 4.92 percent in October 2010 to 4.63 percent for October 2011. And the national rate fell to 7.20 percent from 7.75 percent in Octobert 2010.
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