"I think it was the allure of quick money:" Victims lose millions in foreign investment scam
NEW YORK (WITI) — It seemed like a no lose investment. Clients were offered big returns in a short period time, but they ended up losing millions in a scam.
"I think it was the allure of quick money. The greed factor, it short circuits some of your defenses," said fraud victim Jack Thomas.
Jack Thomas lost $50,000 after investing in a fake foreign investment scam created by Alex Efrosman.
Thomas admits he should have done his homework before investing in a foreign currency investment, but the deal seemed to good to pass up. Other family members were already involved with Alex Efrosman and were boasting about making a lot of money.
"They were telling everyone in the family, 'This is a good deal.' In six months, he got 10-15% of his initial investment back in his account with his name on it," Thomas explained.
The family thought they were making money based on fake statements Efrosman supplied.
"I wanted to invest for my grandchildren's education," Thomas said.
Days after Thomas wired the money, Efrosman fled the country with Thomas' $50,000 and the $7 million from more than 150 other victims.
"You’re stunned in the beginning and, then, when you start to think this money is never coming back and this guy is never coming back and he just took off with it," Thomas said.
U.S. Postal Inspectors say Efrosman was a seasoned veteran in scam business.
"He had no remorse because he did it not once, but twice. He did the same scam again," explained U.S. Postal Inspector Michael DelGiudice.
He was indicted on fraud charges years before this scam.
"Efrosman was a highly very intelligent person. Instead of using his intelligence to benefit people - he used it to scam people," DelGiudice said.
The stolen money mostly went to personal use.
"He had expensive habits. He had a drug problem. So, he was using it for drugs. He bought expensive cars. He had a Porsche. He would do work on his apartment," DelGiudice said.
It's important to remember — if you plan on investing always check out the potential investment online.
In fact, a simple internet search would have turned up Efrosman's past record.
"I’m very skeptical of anything now. I don’t jump into anything anymore. I learned my lesson, hopefully," Thomas said.
Efrosman was eventually extradited from Poland and pleaded guilty to wire fraud. He was sentenced to 16 years in federal prison and ordered to pay $4 million dollars in restitution.