Mary Holm: The $1m scam – the warning signs to watch out for

OPINION

Q: I bought shares in Fortune Gaming.Com in 2000 from a company called Transglobal Consultants Ltd for $3500. I didn’t hear anything after that so I thought it was a scam.

I think around 2005-2006, Austin Medical bought the company, or shares in the company. Then in 2006 a company called Heron Asset Management wanted to buy my shares. It was then I realised they might be real.

Since then I have had several companies wanting to buy. They all said they were restricted shares and I needed to pay money to remove the restriction. That’s when I stopped.

Now I have a law firm wanting to sell them for me. But first I had to get the restrictions removed, which I have done. I paid $10,907.37 to [name supplied] to remove them. The money is supposedly in escrow.

I’m dealing with [name supplied]from a law firm, Ashimoto Kogyo Co, Ltd. He’s in Japan.
The restrictions were removed by[name supplied]in New York.

Now they are asking for me to exercise warrants attached to these shares, at a cost of $118,879. I’m to bank the money into an escrow account, Medallion Transfer Ltd, Spark Central, 42-52 Willis Street, Wellington. Then I receive 558,090 euros ($983,000).

A lot of instruction was on the phone, no paper trail.

I’m wondering if you have had any others with dealings with these people?

A: No I haven’t. But I didn’t like the look of this when I first read your email and wrote to you quickly saying “pay nothing in the meantime” while I make a few inquiries.

If you had gone ahead, you would have paid a total of about $133,000 to get back euros worth close to $1 million. Too good to be true? I’m afraid so.

“This is a really sad story,” says Liam Mason, director of regulation at the Financial Markets Authority. “I’m afraid your reader has got themselves caught up in a pretty common type of repeat share scam.

“At the heart of it is the sad fact that a person who falls victim to one scam is quite likely to be targeted a second time.

“What we have seen in the past was boiler room operations cold calling New Zealanders to sell either fake or penny shares on the promise that they were the next big thing. The outfits that made the first sales then either sold the details of their victims to a new set of scammers or recycled them themselves.

“The second round of the fraud involved either an ‘escrow agent’, a fake regulator, or something similar getting in touch and saying that they were trying to help people who had been sold the shares, and offering to help to sell them on, always with some duty or charge that needed to be paid to allow the sale.”

Mason has seen “restricted shares” used in these deals before. “The notion of a payment to remove the restriction is not real. It’s just an advance fee fraud.

“This is a really nasty case — I haven’t seen a person re-victimised three or four times.”

I also asked a friend of mine, who is great at checking things out online, to look at the people and companies you named.

He reports that every company mentioned seems to be either no longer operating or looked worrying for one reason or another.

Furthermore, Transglobal Consultants Ltd and Heron Asset Management are on an Australian Securities and Investments Commission’s list of “companies you should not deal with” on their “Moneysmart” website. And the NZ Securities Commission — since replaced by the FMA — also had Transglobal on a list of firms which have targeted people in New Zealand.

On Ashimoto Kogyo, the FMA’s website says, “We recommend exercising caution before dealing with Ashimoto Kogyo Co. Ltd and its website …as we believe that it has the characteristics of a scam.”

How about Medallion Transfer Ltd? No company with this name has ever been registered in New Zealand. And when my brother, who works near Spark Central in the Wellington CBD, popped into that building, he could find no sign of the company.

Of Medallion, Mason says: “I suspect the truth will be that there isn’t a NZ connection here.

“If you want to suggest that your reader contact us at [email protected], then we can see if there is anything to do.” However, he adds, “I really would suggest that you tell them not to get their hopes up — the money they’ve sent so far is, I’m afraid, lost, and the only thing to do from here to stem this is not to send any more.

“If we do find a real NZ connection I’d be very happy, and we can investigate from there. I would have to say though that in my experience that has not ever happened for this type of scam.”

I suggest you follow this up with the FMA. But, as Mason says, don’t hold your breath.

There are several messages here for other readers. One clear one is to at least do an internet search before making any investment. Another is never to give money on the promise of getting more back.

There’s information about scams on the FMA website, Netsafe and Scamwatch.

Gender gap starts early

Q: Re the comment about long ago wages in last week’s column, in the very early 1970s my siblings and I often worked holidays in a local Mangere Bridge market garden.

The pay was boys 35c per hour, so $14 before tax for the 40 hours. Girls 25c per hour. It was really hard and quite dispiriting because of the bending over.

I feel we may, oftentimes, have done more damage than good for the owner.

A: Maybe they didn’t deserve much better. The wage inflation calculator on the Reserve Bank website, www.rbnz.govt.nz, tells us that 35c in 1972 is equivalent to about $7 an hour now, and 25c comes to about $5. So not even the boys were exactly raking it in.

When I received your email, I had to write back and ask whether you — a male — thought the boys did more work than the girls, to justify that huge 29 per cent pay difference.

Your reply: “Ahem … Um … Well, in our case, my friend group, certainly, of course.

“We were innovators. The place was an incubator. My friend invented a speedier way to weed tomatoes. He pulled everything in the 50-metre row out, then put the toms back in.

“The fruit may have come out smaller and fewer, but very flavoursome I’m sure.”

Meanwhile, your sisters may well have been busy doing something even more brilliant!

Anyway, it’s interesting to see what was probably widespread acceptance of the gender pay gap back then.

Unhappy tax returns

Q: I was disappointed after receiving my end-of-year tax return that the IRD, instead of paying me my donations return, have withheld over $3000 to pay for my next year’s tax.

My accountant has said they have tried everything they can do and IRD will not change this decision. Am I wrong for thinking it’s crazy that IRD can do this!?

A: Whether or not it’s crazy, it is within the law.

When I sent your letter to Inland Revenue, they asked for your name so they could check what had happened. You gave me permission to pass it on, and they have now responded as follows.

“As you know we can’t tell you information about individual customers, but we can tell you that there is an offset option that IR can use.So what follows is a general comment and not a comment on your reader’s situation.

“There are situations where Inland Revenue offsets a refund or part of a refund against tax debt. At the end of this page, tinyurl.com/DonationNZ (about submitting donation receipts), under the section ‘what happens next’ there is information on this.”

It says there, “If you have a tax debt we’ll put your tax credit towards your debt and refund you any remaining money. Otherwise we’ll pay your tax credit into your bank account.”

I can understand your disappointment if you were planning on spending that money. But still, it will be nice next year to have some of your tax already paid. And these days you would earn next to nothing in the bank with the money in the meantime.

Bank misses out

Q: My friend and I thought we would take your advice regarding our $3645 from Bonus Bonds, and put it into the Co-operative Bank in the hope of winning a car.

I have had the money with my friend for 10years and we were just keen to put it into something together for a while for the fun of it.

I went into the Co-operative bank in Whangārei, 50 minutes from my home, and said to the lady that I would like to open an account.

She said I needed an appointment, and the day was fully booked, as was the rest of the week. Next week was looking to be very busy also. I said next week wasn’t good for me as I work in the opposite direction, an hour away from my home.

She said I could apply online and my friend would have to do the same, and then they would join the accounts up at a future date.

By this time my interest was totally gone! Unfortunately the fact that we could possibly win a Mini was not sufficient to change my mind after this interaction, or lack of it.

Obviously they do not want our money, and I left with it still in my purse for us to rethink our options.

A: Maybe the bank was flat out with other former Bonus Bonders signing up! But still, it’s disappointing for you.

“Is it normally that hard to open an account with your bank, for people who turn up at a branch?”, I asked a Co-operative Bank spokesperson.

No, she said, it’s really easy. However, “On joining, our branch staff like to spend the time to make sure the products new customers choose are fit for purpose, and along with meeting the legal requirements such as proof of identification, opening an account with us for the first time can take 30 minutes or so.”

She added that the bank is “concerned to hear about your reader’s experience, as this is not normal for our bank, and we apologise for the inconvenience.

“On the rare occasion branch staff are not able to meet the needs of people who pop in, we provide them with alternative options such as going online, as our staff did on this day. Our online process is super easy, and the step of joining accounts afterwards with her friend would be quick and easy to do also.”

Perhaps give that a go. Or follow another reader’s suggestion — invest in bank term deposits and put the interest into Lotto.

This seems to be Embarrass The Banks Week. Read on.

Q: Thank you for your column. Much of it is useful and relevant to those of us in our 80s, especially as we become further removed from the target market of the banks.

In last week’s letters you mentioned bank security. We had an interesting experience of this recently when we went to wind up our Bonus Bonds at the ANZ.

Quite a large sum was involved and so we knew that we would need to identify ourselves and so duly arrived with our passports. Passports were checked, then photocopied and the transactions completed.

We left the bank and had a smile. We had entered the bank wearing facemasks, at no time did we remove them and left the bank still covered up.

The passports were checked but not the people.

If all the other security procedures in ANZ are carried out to a similarly high standard, perhaps we should be a tad concerned.

A: Now perhaps you two are planning a few masked bank robberies, a la Bonnie and Clyde. Not so fast!

An ANZ spokesperson assures me that, “We have multiple ways to identify customers, and viewing a customer’s face is only one of them.”

– Mary Holm, ONZM, is a freelance journalist, a seminar presenter and a bestselling author on personal finance. She is a director of Financial Services Complaints Ltd (FSCL) and a former director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.

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