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Warnings to seniors about bank fraud

The Senate Special Committee on Aging has joined with national officials and state law enforcement personnel warning senior citizens to be cautious with their retirement money.

"In any economic downturn people will try to maximize their savings and with today's lower rates, some are tempted by risky get-rich-quick schemes.

"It's in this type of environment that scam artists seem to flourish -- at least for a while -- before being prosecuted by the law," the Committee said. "Unfortunately, with this type of scam, senior citizens can lose their entire life savings."

One of the latest investment frauds circulating throughout the country is the so-called "prime bank" scam. Regulators at the Securities and Exchange Commission have shut down over three dozen such schemes, with losses totaling hundreds of millions of dollars.

"There are no "prime bank'' investments, but one of the common claims of the con-artists is that banks and government officials want to keep the trade of such monetary instruments 'highly secret.' Those who make such claims simply want to steal your money," the Committee said.

While attempting to lure investors, criminals will often claim that "prime bank" financial instruments are issued by banks to other banks, and are therefore safe and profitable. Scam artists often use sophisticated sounding terms, referring to such things as "prime bank" guarantees, notes, debentures, standby letters of credit, or blocked funds in order to impress their prospects.

At a national press conference in Washington, DC, one investor from Utah warned others that he had lost over $50,000 after a close friend told him he could make 25 percent per month return on his investment in a "prime bank" program.

Seniors and others worried about potential financial scams should call the U.S. Securities and Exchange Commission at 1-800-SEC-0330