Southeast : Whittier Police Warn of Investment Scam

The anonymous callers to the Whittier Police Department wanted to know if “investment clubs” are legal.

You know, where you plunk down $2,000, then recruit other investors to give the same amount and to recruit investors of their own. Stick around long enough and some of the money comes to you--if you’re high enough on the pyramid.

Pyramid? That’s right.

This is what is known as a pyramid scheme, says Whittier Lt. Tom Marino. And it is illegal.

Maybe the reappearance of such scams is another economic indicator or just an example of a tried-and-true, get-rich-quick scheme getting another spin, Marino says. But investment pyramids are back. Whittier authorities have gotten three calls in the last two weeks from would-be investors who were told they could expect to parlay their initial investment into $32,000. “The problem is, people put their money into these things, then we come in and bust them up,” Marino said. “And a lot of people never see their money again.”