Tech Startup Defrauds Investors

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[00:00:01] Bob: This week on The Perfect Scam.

[00:00:04] Taylor: He doesn't normally take an investment so low as 50,000, but because I know these people, he's willing to make an exception for me. I'm getting in with, you know, the likes of Leonardo DiCaprio and royals from around the world, so why wouldn't I jump on that?

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[00:00:27] Bob: Welcome back to The Perfect Scam. I'm your host, Bob Sullivan

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[00:00:33] Bob: It's dark, you ride an elevator to the top of a skyscraper and emerge into a room with a beautiful view of the city lights. You're with some trusted friends including your former teacher and a witty tech wizard who is about to invite you into a secret circle. There's a demonstration of his new invention that begins with gigantic bug-shaped robots. And there is an offer to be part of what the group thinks might just be the investment opportunity of a lifetime. That's where Taylor finds herself as we begin today's story.

[00:01:12] Taylor: It was also like nighttime, 8 or 9 at night. He takes us into this office, and he's got these, several, several, I don't remember the number, but several little robots. I don't know what else to call them. They were like robots, but in the shape of different insects. So there was like a massive housefly, and when I say massive, I'm talking about maybe, maybe like 8 or 9 inches long and it's quite clearly a machine that has been made to look like this, like an insect because he's saying that this particular technology can go into places that humans can't, and you know, gather information or, I don't know, be a bomb, or...

[00:02:04] Bob: That's Taylor, not her real name, but we're concealing her identity, and he is a man that Taylor calls Syl.

[00:02:14] Taylor: He was talking about it as if the military was going to be using it. This was the technology that the military would want and would use. It would be best used by them, and you know, he needed to have this money to be able to build more so that the military could have more.

[00:02:29] Bob: Okay, this sounds like an amazing scene to me. It's, it's dark, right, you're at the top of this very impressive building, right?

[00:02:34] Taylor: Yeah.

[00:02:35] Bob: And it's a roomful of gigantic insects? That sounds kind of creepy.

[00:02:37] Taylor: Yeah, I mean not gigantic, but definitely bigger than actual size (laughs).

[00:02:43] Bob: Didn't you say it's like basically a 7" housefly? That sounds gigantic to me.

[00:02:46] Taylor: Yeah, yeah, like about 7" or so. Um, and really beautiful. Like the mach--, the craftsmanship of these things was actually really stunning. They looked really, really cool. These little antennas and you could see like, they just looked neat. And I, obviously I couldn't take pictures, 'cause we weren't allowed to take pictures, so I don't have anything.

[00:03:06] Bob: That's too bad.

[00:03:09] Bob: They weren't allowed to take pictures, but they will be allowed to invest in these insect robot gadgets. The man making the presentation, the man with the giant insects is a Filipino immigrant named, Sylvein William Maximilian D'Habsburg XVII. Syl, Taylor calls him. He owns a couple of tech-related startup companies, and he makes a simple pitch to them.

[00:03:36] Taylor: And it was the way he was saying it was just this, the investment could be as if, he likened it to doing a CD. So you would invest this money and over three years you'd get 4½% return, and then that would be it, then you’d get your money back. And again, that feels like a no-brainer. I'm getting my money back after three years and I'm just going to make money off it? More than I'd be making with it sitting in a savings account or in a CD or possibly on the market where I might lose it. It was just, it felt very much like, of course I'm going to do this.

[00:04:05] Bob: So you walk out of the room and murmur, murmur, murmur with the people who watch, well what did you all think of it?

[00:04:12] Taylor: I mean obviously I thought it was really cool.

[00:04:16] Bob: At the time, Taylor is in a position to invest because her father had passed away a few years earlier and left her a modest inheritance.

[00:04:27] Bob: You know, some people who haven't been through something like, like you have, might not understand that, you know, an inheritance while it's, it's money, it's numbers on the bank account, it's more than that, right?

[00:04:35] Taylor: Yeah. (choked up) Absolutely. I would give it back in a heartbeat to still have my dad.

[00:04:41] Bob: But also, it's something that he left to take care of you, right?

[00:04:44] Taylor: Yeah, it was, it was an, an incredible amount of money. I mean in the, you know, the big scheme of dollars, it ended up being about $150,000 which again, to me, was a huge amount of money.

[00:04:59] Bob: A huge amount of money for her, and money Taylor doesn't need to live right at the moment. So ideal for taking a bit of a risk.

[00:05:10] Taylor: You know use this money in this way that could set me up for the rest of my life. It was kind of presented to me as, as if I had the opportunity to purchase Apple stock before it became what it was. And you know, who doesn't want to do that?

[00:05:25] Bob: Take this one risk and your dad's hard work for his whole life will take care of you for the rest of yours, right?

[00:05:31] Taylor: Exactly.

[00:05:33] Bob: Taylor has a couple of reasons to trust the man she calls Syl. She got invited to this late-night investment talk because of that teacher I mentioned briefly. Well teacher's probably understating it quite a bit. Taylor is a trained massage therapist and a few months earlier she had spent a full week with this man in an intense training known as a bodywork intensive. It's both physically and emotionally demanding, so she has come to really trust this teacher who vouchers for Syl, but also Taylor met Syl at the end of the training, so she's known him for a while. Why is bodywork intensive training so intense? And why does it lead to intense abiding trust? Let's take a moment so Taylor can explain.

[00:06:23] Bob: I know there's several different names for it, but one of them is a, a bodywork intensive, right? Can you talk to me about what that is?

[00:06:28] Taylor: Yeah, so there is a particular modality of bodywork that deals with accessing the nervous system, really just working through the tissue where you're accessing the nervous system and creating these intense feelings, these flashes of electrical impulses, just using your own, your own electrical system to clear out neurochemical residue. And I had gone to massage school, I had a client who, she had been in a terrible accident many years earlier and she received a lot of bodywork from a lot of different people. I mean three-hour sessions with two of us working on her at the same time. It was, and, you know, this wasn't fluffy work that we were already doing. And um, she showed up one day for her session and she just looked different and was moving different. And she was like, I've, I've found the thing. And so it was through her that I was connected with this person that, that does this particular modality and, and then he was going to be teaching this modality. And I was part of the first group of people that he was going to be teaching this modality to. There was 10 of us total. We went and stayed at a house in Ojai for 10 days, and lived in this house and, and learned in this house and it was quite intense because there are a lot of emotional things that are coming up, not just for myself, but for everybody there because we're really digging into, you know that book the, "The Body Keeps the Score," and the phrase, "that the issues are in the tissues." All of that is very real. And when you start accessing this stuff, you're really creating this vulnerable space. This was very raw, emotional space. So it was quite an intense time, and also really magical because we were all going through this together and eating, you know, vegan raw food and it was really great and I loved being there.

[00:08:38] Bob: Um, I mean I might think of this, if I don't know what you're talking about, as a, as a yoga retreat or something like that, right?

[00:08:45] Taylor: Yeah, that's probably the easiest way for people to picture it. It is a retreat in that, yes, you're in a space and you're all living and eating and sleeping together, but it's more like a class in that every day for several hours each day we're being taught this technique. So we're going through the whole body and learning the anatomy of it and, and then it's being demonstrated on somebody, and then we're splitting up you know with our partners to then practice these things on each other and trading back and forth. So it's school and a retreat all mixed into one.

[00:09:25] Bob: You're both experiencing it and learning how to do it for others, right?

[00:09:28] Taylor: Exactly. Which is part of what makes it so intense. You're like having these huge emotional releases and realizations and these things that you're trying to process through while also learning something and applying it to somebody else.

[00:09:42] Bob: And during this training Taylor has precisely that kind of emotional experience her client did.

[00:09:50] Taylor: This actually might have been one of the last couple of days of actually learning the modality. There is a portion where you're literally like digging into the muscles, the intercostal muscles, right, like the little muscles in between each of your ribs. And it's never comfortable. None of this work is very comfortable. It can feel quite intense and aggressive, but...

[00:10:13] Bob: It, it can hurt.

[00:10:13] Taylor: It can hurt, yeah, but it hurts because of what's in there, right? The guy who was working on me, he was getting in there and he was doing a great job and all of a sudden, he hit something and I started just kind of yelling, "I hate that, I hate that, I hate that." And as it was coming out of my mouth, 'cause my eyes were closed, I was on a massage table, as it was coming out of my mouth, I was like taken back to being a child saying, "I hate that, I hate that, I hate that," because my sister used to, she would like pin me down on the floor. She'd pin my arms down by my body with her knees, and she would "tickle me," which was really just her digging her nails into my ribcage and it, she had, she had nails. She would let her nails grow so it was incredibly painful. I'm a bit claustrophobic, so it was super traumatic. And as this guy's working on my rib cage, I'm taken back to that moment, to one of those moments when she did that. And the crying that came out was, it's from your gut. It's from this deep place that you don't even realize is there. And it just wouldn't stop. And it just kept coming and kept coming. And then as, as that started to kind of pass, then I started feeling really angry, just irrationally angry given the environment that I was in and who I was with. So I separated myself from the group and finished processing that. It took a few hours, honestly, for me to feel okay again. Um, fast-forward to six months later when I saw my sister for the first time since that had happened, and she said to me, she said, "You're different." And I know what she was experiencing because for all the years that she had not been so kind to me, she's apologized multiple times throughout our lives, and I've always accepted her apology and believed she was sorry, and still there was this thing between us because I couldn't actually let go of that hurt and trauma because it was still in my body. And that experience changed our dynamic and changed our relationship because I could finally, I was finally, physically free of all of that.

[00:12:51] Bob: I mean it sounds amazing.

[00:12:52] Taylor: It's incredible, it truly is incredible.

[00:12:56] Bob: So a couple of days after that emotional release ever, that remarkable experience, the training comes to a close with a final ceremony. It involves the use of psychedelic drugs and, surprise, there's a new person at this big closing ceremony.

[00:13:13] Taylor: Well he's like average height, I guess, I don't know, I don't retain things like that. He's definitely Filipino. I know that because my first two boyfriends in high school were Filipino. I just, there's some--, I love Filipino people. So I did notice that. He was with his wife, and I was under the impression that it was just going to be us, just the people that had been living and, you know, learning in this house. And then as we're preparing the space for the ceremony that evening, um, is when Syl had shown up. So he was part of it, but he was like, I didn't pay attention to him. I was actually kind of annoyed by the fact that somebody was coming into this container that we had created. But it was...

[00:13:58] Bob: Sort of a sacred group, right?

[00:13:59] Taylor: Very, yeah, absolutely. And so it was off putting. And I, I'm pretty sure I was probably a little bit rude to him because I was annoyed that he was there. Um, but he participated in the ceremony.

[00:14:13] Bob: The ceremony, and they all go to bed and wake up to go home the next day, but there's one more thing that happens before they take off. Syl geeks out for them.

[00:14:25] Taylor: Before we were all leaving, he pulls out like a, an EMF reader, and he has this, you know, everybody's got their devices there. Obviously, we've been there for so many days so there's a PC, laptop, an Apple MacBook, an iPhone, and an Android, and he lines them all up and is like, putting the EMF reader over each of them and you can see that the Apple products are giving off exponentially higher EMFs than the Android and PC, and that feels like a cool thing to know. And he starts talking about whatever he starts talking about, and again, I just kind of shutdown and shut it out because, because I've been doing other things for 10 days. It just wasn't, it was a weird timing.

[00:15:05] Bob: He sounds, he sounds like a geek though.

[00:15:07] Taylor: Totally. Total geek. Went to Cal Tech as far as I know, like and again, it's these, well he went to a prestigious college and he has... he's talking about all these things that he has built or knows or whatever, and I don't know about any of that stuff. And I tend to take people at face value because, because, well why shouldn't I? (laughs) That's the trusting part. I just believe what people say.

[00:15:31] Bob: Especially trusting right then after this cathartic experience.

[00:15:38] Taylor: We're all open, our nervous systems have just been like, like cracked open and we're feeling our bodies again in this way we haven't in so long, and we're processing through these things that have been holding us back. You know we can talk about a trauma or talk about something that affected us until the cows come home, but if it's still in your body, it's still informing the way you move through the world.

[00:16:00] Bob: It's certainly an odd time to bring up investing.

[00:16:05] Taylor: And all of a sudden it's not there anymore and you just see things differently and you're feeling things differently, and yeah, this guy's showing me how this magical whatever can do this and I have the chance to get in and, and he doesn't normally take an investment so low as 50,000, but because I know these people, he's willing to make an exception for me. I'm getting in with, you know, the likes of Leonardo DiCaprio and royals from around the world, so why wouldn't I jump on that? You know?

[00:16:34] Bob: It also sounds like, and forgive, I'm one for terrible rough analogies.

[00:16:39] Taylor: It's okay.

[00:16:39] Bob: But I'm, I'm picturing, you know, a family wedding or just a big party where everyone's you know had maybe a couple of cocktails and at the end of the night you're all locking arms being, ooh, I love you; I love you, too, right?

[00:16:50] Taylor: A little bit.

[00:16:50] Taylor: And, and I would imagine, I'm suddenly imagining in a moment like that, if someone was like, I love you, also I've got this investment opportunity.

[00:16:56] Taylor: Uh-huh (laughs) A little bit. (laughs)

[00:16:59] Bob: You might take it, yeah, yeah.

[00:17:02] Bob: Well the investment discussion doesn't really go much farther that day. No, it's months later that the yoga teacher invites Taylor and a few other people to ride up that elevator and see those giant insects, and then maybe invest. But these are intimate friends at this point.

[00:17:22] Taylor: Yeah, it was probably within about six months or so when the teacher, the guy who was teaching this modality mentioned that Syl was looking for investors and he was going to do a presentation so that we could see what it is he was looking for investors for.

[00:17:41] Bob: And as they walked out of the building that night, this teacher turns to Taylor and says, "You know, your dad would really want you to invest this money that way." Taylor really trusts the teacher.

[00:17:55] Taylor: And I felt very grateful that I had met this person. He was teaching me this bodywork. It had changed my life. It has completely changed my technique and the road that I've gone down with the, the kind of work that I do and I just felt so like indebted to him and very much believed all these things that he said. And because of how it was presented, I thought, well I should do this. This could be like the next Apple. Again, that was how it was presented, right, by my teacher who so very much likened himself to, like being an oracle and just knowing things and being connected to this knowing of the universe. And...

[00:18:35] Bob: So, so as someone who teaches one of these classes sounds to me kind of like a yogi or something like that, right?

[00:18:40] Taylor: Uh-huh, yeah. Yes, very much so.

[00:18:42] Bob: He's got that sort of authority.

[00:18:45] Bob: But a few days later as Taylor starts to move money around and get ready to invest with Syl, she starts to have some second thoughts.

[00:18:54] Taylor: I talked to one of the guys who had also been at that presentation at the, at his office, and he was like, "No, I'm not going to do it." He's like, "Something is off." And I started to, like I began stopping the process. I was like, well I trust you if you think that this is off, I'm not going to do it. And so I had contacted whoever and was telling them, no, I don't want to do it, and then the teacher shows up again, and is pressing again, like I really, I just, I see this for you. I really, really believe that this, that this is going to be the thing for you. You're going to be set for life and wouldn't your dad be so excited and proud?

[00:19:35] Bob: Your dad would be so excited and proud. Remember, she trusts this teacher, so Taylor takes the plunge. She invests $50,000 in Syl's company.

[00:19:47] Taylor: It was in March of '17 that I did the transfers. The investments, the accounts that I have, I have the beneficiary account, which is what came from my father, and then I have my own, my own Roth IRA because you know, that's what you're supposed to do. So I took a portion from my dad's, I still call it my dad's money. I took a portion from my dad's money and then a portion from my money.

[00:20:12] Bob: She wires the investment to Syl and waits for a year or two. She gets a small dividend from Syl occasionally, not as much as was promised, but then the payments stop. Taylor is starting to feel uncomfortable about the whole thing when 2020 arrives, the pandemic arrives, and Syl's business model changes.

[00:20:37] Taylor: And that became very much the excuse at that point for not receiving the money, right, we're, we're in COVID, we're in a pandemic. And then it shifted into him creating this artificial intelligence that could do COVID testing through video.

[00:20:55] Bob: Detecting COVID through video? Well despite Syl's slick presentations, that makes no sense to Taylor.

[00:21:05] Bob: You didn't buy the COVID test.

[00:21:06] Taylor: No, no, no, like of course not. What are you talking about? Wait, oh my God, it was, yeah but he, you know he's, he's a talker and he's got the videos and he's got the testimonials and he's got this and he's got that, and yeah, it just, it became clear.

[00:21:26] Bob: It became clear that she'd better try to get her money back from this inventor.

[00:21:33] Bob: Okay, so COVID happens, the COVID test stuff happens. You call BS and you say, Syl, I want my money back.

[00:21:39] Taylor: Yeah.

[00:21:40] Bob: Well what happens?

[00:21:41] Taylor: Oh, I don't have it. I'm working on getting more investments. I have this meeting with the Prince of I don't (bleep) know where, and I'm just waiting for the money to come. I promise you, I promise you, as soon as I get this money you'll get your money back.

[00:21:59] Bob: Taylor starts to hear those promises over and over, then she starts to hear less and less.

[00:22:07] Taylor: I, every couple of months would reach out to him. I have multiple voice notes that I sent him because he just wouldn't, wouldn't respond to my messages. He was always traveling. He was always here and there and working on getting more, 'cause he needed more money from other people in order to give me my money, which also was a huge, huge flag, right? Like this is, it was insane.

[00:22:37] Bob: But not nearly as insane was the night that Taylor is invited to Syl's house. She finally corners him on the phone, says she needs some paperwork for her self-directed IRA. And Syl makes a surprise offer.

[00:22:53] Taylor: He, when we finally spoke on the phone, he was like, "I can't talk to you over the phone." He was very cryptic. "They're listening. I can't talk to you over the phone, I need you to come to my house so that we can talk."

[00:23:05] Bob: That sounds kind of terrifying.

[00:23:06] Taylor: Yeah, a little bit, a little bit. But he gives me this address in Woodland Hills.

[00:23:11] Bob: Well what were you thinking as you're driving, like man says like he can't talk over the phone. What are you thinking?

[00:23:15] Taylor: I, uh, I don't even know. I honestly don't even know what I was thinking. The whole time I'm thinking, the only reason I continued to have any kind of communication with this man is in the, the desperate hope that I might get my money back. That I wasn't being lied to this entire time. I'm just, I just wanted money. You know I don't even care about the 4½% that I was supposed to be getting this whole time, just give me back my initial investment. That's it, just give it back to me. That's all I want.

[00:23:46] Bob: So she takes him up on the invitation and things get even weirder when she opens the door.

[00:23:52] Taylor: So I get to the house and the house, the portions of it that I saw is what most people would consider like, light hoarding except the items that are being hoarded are, they look to be quite expensive items. Like these massive gold lions. Like how cheesy can you be? But like a massive gold lion and these large chairs that look like they're made out of, you know, the oldest tree that's ever existed and it's ornate and carved and just all of these things, you can, this is where the money is, at least a portion of it. You can see, you can see that these were not, these are expensive things. And I even said to him, as I'm looking around this room, I said, "I feel like you could sell a couple of these things and give me my money back." And of course, he just kind of laughed it off, like what an absurd thought that I would, you know, that I would actually give you your money back and sell these items. But that his...

[00:24:57] Bob: I know this sounds ridiculous, but it, there seems to be like an, an extra kick in the pants that this man has these crazy objects and they seem stupid, but expensive, and that's your money.

[00:25:07] Taylor: Yes, yes, absolutely! They're just like decorations. It's not even like they were functional.

[00:25:13] Bob: They're gawdy.

[00:25:14] Taylor: Yes, gawdy.

[00:25:16] Bob: Yeah, that's, oh God.

[00:25:16] Taylor: Big, gawdy and expensive, and just it was all gross.

[00:25:24] Bob: So Taylor sits down to dinner with this man, this man who has the money her dad left for her, this man with a houseful of gold lions and ornate thrones, and that's when he gives her the news.

[00:25:38] Taylor: So his aunt was there who I've met a few times, Aunt Rhoda, I think was her name, and she always wants to feed me, and listen, I love to be fed. So I accepted some of the food, but it was, we sat at this, again, massive table that I can't even go into it anymore, but we're sitting there and that's when he is, is he's telling me that he is being investigated by the FBI.

[00:26:00] Bob: He is being investigated by the FBI? And that's when she sees another side of Syl.

[00:26:07] Taylor: It's always interesting to him speak because he'll be very gentle and kind and you know that part that draws you in and you want to believe and you, and you believe him, and then in an instant you see him and hear him start to get very upset. And his eyes get bigger and you know it's like they turn into the crazy eyes, and he's kind of yelling and that's his most disturbing state is when he's like that because he looked like he wanted to flip the table over. He was so upset that he was being investigated and his story in his mind, or at least the story he was giving me is that the reason the FBI was after him is because his technology is so special that they don't want him to have it. That they want it. They're going to take it from him.

[00:27:00] Bob: Oh.

[00:27:02] Taylor: So if they ask you anything, if anybody reaches out to you and they ask you anything, you don't tell them anything because they're out to get me.

[00:27:10] Bob: They're out to get me. Taylor leaves the dinner and figures, well, she'll never hear anything more from him, and she won't ever hear anything more about that money.

[00:27:22] Taylor: And I just, again, at that, it, more and more clear that this dude is insane, the money's never, I'm never going to get the money, and I was done at that point. I stopped trying. I stopped trying to get the money. I stopped contacting him because it felt very done.

[00:27:41] Bob: But she isn't done because soon after the FBI does call her.

[00:27:47] Taylor: When I received the message from the FBI agent, I was like oh, okay, great, here we are. You know, you're always scared even though you know you didn't do anything. I got scared getting jury duty summons even though I didn't do anything.

[00:28:02] Bob: And the agent fills her in on what's happening to Syl.

[00:28:06] Taylor: He was being, he'd been investigated and he had been charged with wire fraud and I was somehow, I don't know how, but my name was listed as a potential victim. Basically I was not the only one is what he was saying. I was, I was most definitely not the only one. I was the one that had the least amount involved that, you know that...

[00:28:27] Bob: Congratulations.

[00:28:27] Taylor: Thanks. It made me feel so much better. But they were going to be going after him.

[00:28:32] Bob: Going after him and in December 2024, Sylvein William Maximilian D'Habsburg XVII pleads guilty to a felony involving $5.9 million in investments he had persuaded victims to make in his two companies, Wild Rabbit Technologies, and BAI Intelligence. He targeted elderly church parishioners, especially Filipinos, the DOJ says. He claimed to have secured investments from luminaries like Kobe Bryant, Michael Jordan, and Steve Wozniak, but he used the victims' money to purchase luxury cars like a 1933 Rolls Royce and rare antiques like a pair of Italian carved giltwood thrones from the 1800s, and apparently, giant gold lions too. Taylor is one of many victims and she's glad to hear he's pled guilty to a crime and that she wasn't alone.

[00:29:28] Taylor: Yeah, honestly just relieved to know that there was something being done. Because prior to that, I just felt I was on an island. You know I felt like I didn't really have any recourse with this man. I don't have the money to get an attorney. I might spend more on an attorney than the actual money that I'd be trying to get. And even then, how do I, what do, what kind of attorney do I call? I just felt real impotent in the situation. So receiving the call from the FBI felt like well at least they know and something's being done, and hopefully Syl rots in jail. It has taken everything in me over the last four months not to contact him and basically tell him he's a piece of (bleep), because I very much want to do that, and also know that there is no point in doing that. You know, it's just so gross, it's so gross to me. There, he's obviously smart. So like use your smart for something else instead of just taking money from people. I don't, it's just disgusting. He's disgusting.

[00:30:39] Bob: As of this recording, Syl is still awaiting sentencing.

[00:30:46] Bob: What did he take from you?

[00:30:47] Taylor: He... I mean other than to me a large amount of money, I, like I said at the beginning, I've always been really trusting of people. I see the best in people. I always give the benefit of a doubt. And I can't do that anymore. Everybody is a potential threat or scam, and that sucks because that's not at all how I see the world.

[00:31:16] Bob: He took a lot more from you than money.

[00:31:17] Taylor: Yeah, the money can always be made again. Right, like whatever. Money's money, and I know that's a very privileged statement to make, but money is just money. But he just took my ability to fully believe people and fully take them at face value. And that's a--, that's always how I've been, so often to my own detriment, obviously. But I just don't, I don't trust most people anymore.

[00:31:44] Bob: I'm really sorry to hear that. I can't help myself from asking this question. You had this amazing emotional experience which took you to a better place with your sister and probably in other relationships too. Did he ruin some of that for you, too?

[00:31:56] Taylor: No. Um-hmm. Um-hmm, no.

[00:31:58] Bob: Okay, good.

[00:31:59] Taylor: No, that was...

[00:32:00] Bob: I was afraid you were, how could you not tie this to that in some way.

[00:32:03] Taylor: No, and I think it was because, because even though that was where I met him, that wasn't where the whole thing started, right? So it got to be a very separate, it was, they're very separated for me.

[00:32:19] Bob: Separate but this is certainly a story about a person abusing trust, trust earned during a very emotional experience. Remember, it was the teacher who nudged Taylor over the finish line when she was wavering about her investment.

[00:32:34] Taylor: Well yeah, I mean again, yeah. I mean I... I trusted my teacher. I fully trusted him and so whatever he had to say about Syl and about this situation, I just blindly followed. There is, I mean I have no church affiliation, but I definitely believe that there are some culty aspects to religion and churches, and I definitely feel that there were culty aspects to this teacher and what he was trying to create. And you know we all say we'll never be involved in a cult, and then all of a sudden, you might be involved in at least something that wants to be a cult. I...

[00:33:20] Bob: And nobody that's in a cult says they're in a cult.

[00:33:21] Taylor: Exactly, exactly. You can't know, and what's interesting is I even had a friend I was telling after I had gone to this retreat and learned of bodywork and ayahuasca, and I was telling him all about it and my friend was like, it sounds like you're in a cult. And I was like, I'm not in a cult just because I decided to come off of my, my antidepression medication because I made that decision. Nobody did that to me. But he said, he was like, "It sounds like you're in a cult." And I think that was the first moment that I was able to kind of step back and start looking a little bit differently.

[00:33:57] Bob: What does Taylor want people to learn from her experience?

[00:34:01] Taylor: So in this day and age with as much as we can see about people online, do your research. If there's a time limit to something, note: no, eject, 'cause that's part of the scam too. It has to be done now. You got to get in now. If you don't do it now, you're going to miss out. Absolutely not. Don't do it. Just don't do it.

[00:34:25] Bob: And just because you have a friend in one area of your life, that doesn't mean you should take financial advice from them. Now investment opportunities do arise from time to time; I don't mean putting money into a mutual fund, I mean situations like this where a friend of a friend offers you a chance to get in on the ground floor of something. I'm sure I don't have to tell you it's a very risky venture. But to talk about how risky it is and what you should to protect yourself, we have a great guest today, someone I'm proud to call a friend and colleague, Liz Weston, author of numerous best-selling personal finance books, and a long-time financial journalist.

[00:35:05] Liz Weston: Oh, let's see. I worked for the LA Times, and I wrote for MSN. I wrote for Nerd Wallet for years. I've had columns in AARP The Magazine. So yeah, I've been all over the place.

[00:35:18] Bob: Liz is great at getting to the heart of the matter right away. What was her first thought about Taylor's situation?

[00:35:28] Liz Weston: Oh, God, there's so much that came to mind when I was reading about her situation, and you want the 30,000-level view of this is it's getting harder and harder for people financially. We've seen how people in the middle class and lower middle class, and working class, have just lost ground financially. And it can make them; it can make people desperate to get ahead somehow. And so when they see an investment opportunity, a financial opportunity that looks like it's going to leapfrog them ahead, it can super tempting. Now it's tempting to anyone in any situation, but I think people in Taylor's situation are even more vulnerable to opportunities like this that turn out to be scams.

[00:36:11] Bob: I think it's really important to start there, when people look at their 401K balances. I was just looking at averages. Every time I look at one of those charts it makes my eyeballs burst. The average, I forget what the numbers are, but basically the average 45-year-old has $75,000 or something like that which, I like to say, gets them from 65 to 65½.

[00:36:30] Liz Weston: Oh, yeah, unfortunately.

[00:36:33] Bob: And yeah, and when that reality hits them, of course you think, I got to do better than that. How do I do better? And you start looking around for opportunity, right?

[00:36:40] Liz Weston: Yeah, exactly. I remember way back when I first started answering people's questions, I got one from a single father of a bunch of kids, and he had focused in on penny stocks, which are incredibly risky, but his point of view was, I'm not going to win the lottery, or I don't think I am, and I can no, in no way save enough money to stretch through retirement. So this is my only shot. I just have to gamble that one of these incredibly risky investments will pay off. So it was a real education for me because that's not my viewpoint at all. That's not where I was coming from at all, but I could understand how he would come to that mindset.

[00:37:20] Bob: It's, it's actually, I'm not going to say that's completely rational, but it's an understandable, logical choice that since the situation's hopeless anyway, we're going to take the, the one in a million chance.

[00:37:31] Liz Weston: Yeah, and right now, technology and really cool stuff, we have seen so many people go from obscurity to billionaire status because of technology. That, again, would make this idea tempting that you could be in the ground floor of something really cool that would make all the difference in the world and yeah, who wouldn't want to be a part of that?

[00:37:52] Bob: He kept saying this is the new Amazon, or this is the Mic--, the new Microsoft, right?

[00:37:55] Liz Weston: Yes, yep, exactly.

[00:37:58] Bob: The thing about tech companies is well, Steve Jobs, Bill Gates, Jeff Bezos, these are real people who really did make companies worth billions of dollars, and really did create many millionaires along the way.

[00:38:15] Liz Weston: And I remember listening to a podcast about another scam where you know the difference between an idea that might take off and one that actually does can be really thin. So a lot of the people that are now billionaires maybe were ahead of what they could actually deliver when they got investors interested. So I'm sure that it's all this mix of possibility, could this happen? Is this, did the guy start out wanting to be a scam or was it, did it turn into a scam later? It can get pretty muddy.

[00:38:47] Bob: The line between riches and ruin isn't as clear as we'd all like to think.

[00:38:55] Liz Weston: Which is why we need to be super cautious, a little more cautious. I, again, we talked about the idea that this could be a moonshot, this could land us in the clover; to mix my metaphors, this could be the one thing that really makes a huge difference in our lives, so it might seem like it's worth taking that chance. When you don't have a lot of money that you can lose, that's when you have to be really careful about which opportunities you're looking for. If you are dealing with money that you can easily lose, fine. But I think that's what should be going through everybody's mind if they are investing outside the usual 401K, IRA, mutual funds kind of situation. You need to think to yourself, can I really stand to lose this money? And if you can't, you've got to turn away from every high-risk investment. It really doesn't make sense for you to push forward on it.

[00:39:51] Bob: Another element of Taylor's story that Liz wanted to focus on is the fact that she was investing money that she had received after her father had passed away.

[00:40:02] Liz Weston: Yeah, 'cause the inheritance comes with all this emotional baggage to it, and there's another part of it which is perhaps you don't have a lot of experience dealing with money. Perhaps your only experience with investing might be a 401K which was handled by your company, you didn't have to do a lot with that. So when a lump sum comes into your life, it can cause you to go maybe I can take a bigger risk with this since it's not money I earned. We have that emotional thing where we put money in different boxes depending on where it came from. And the reality is they say money is fungible, it really doesn't matter where it comes from. It all is worth about the same amount. So keep that in mind. It's not free money. It is your money.

[00:40:46] Bob: Liz recommends getting professional help after an inheritance or really any time there's a significant change in your financial situation.

[00:40:54] Liz Weston: And this is a great time when you are in a new situation with a new chunk of money to get fee-only financial planners' advice. Fee-only financial planners are the ones that are paid only from fees by you; they don't have an incentive to sell you stuff. And if you get a CFP, those folks are fiduciary which is the ten-dollar word for they have to put your interest first. So it's not like there's no such thing as a financial planner who's a scam artist. They're out there. But a CFP is going to be that one extra step that you need to have a little more reassurance the person's working in your best interest. And just pay for an hour. Get some professional advice because that's going to save you far more money in the long run than trying to figure this out yourself, or trying to come up with investment opportunities for yourself. And I, I recommend it every time to people who are coming up on retirement because retirement's one of those situations you're making decisions you've never made before. And some of those decisions are irreversible, and some of them could cause you to run out of money. So this is the time you really need another set of eyeballs on your plan. But when you're getting married, that's a new situation. If you have a kid, that's another new situation. Money from an inheritance or other windfall, another situation you haven't dealt with. And just getting that expertise on your side and looking at your situation and giving you personalized advice, that's exactly what you pay for. It's going to be worth more than what you paid for it, so it's definitely worth doing.

[00:42:19] Bob: And I do, I admire people who think they can invest by themselves and they want to do research by themselves and I support all of that, but there is some research in the scam world that merely talking to another person when you're in the middle of being attacked, like even the words coming out of your mouth often helps you see it for what it is as opposed to giving it to yourself.

[00:42:38] Liz Weston: Yes! Yes, oh, Bob, that is huge. That is absolutely huge because as you know the scam artists want to create this sense of pressure, and you've got to act and you've got to do something, and just stepping back that little bit can make all the difference in the world and make you go, wait a minute, why am I sending gift cards to somebody I don't know or the IRS? Why does the IRS need gift cards? Whatever it is, just that one break can make a huge difference.

[00:43:05] Bob: Or why can't this person produce financials that make sense for you, or why does this, this technology, I mean did, did you see the robots move, did they do anything, are they just models? Questions like that are worth bouncing off another person who is disinterested and doesn't have a stake one way or the other.

[00:43:19] Liz Weston: Yeah, exactly. And your friends can do that. I mean they can do some general giving you some feedback, but somebody who's a financial expert will know the questions to ask.

[00:43:28] Bob: Affinity groups, clubs, churches, really any kind of community are also a place where criminals draft off of earned trust, attack like Syl did with church members and members of that bodywork intensive training.

[00:43:44] Liz Weston: And sometimes if you're in a community, whether it might be a yoga community or at your church or temple, that's another area where really bad investment decisions can get made because you're seeing other people in your group participating, or you're being approached by somebody who's part of the group and that you think you can trust and that might be really good at winning over your confidence. That's why they call them confidence men. You, you just are more vulnerable in those situations, and you think you can trust people when you actually really would be better off taking some time and stepping back. Getting into that a little more defended position, a little more rational, a little more skeptical, is a hard step, but it's really important when it's, when you're dealing with your life savings.

[00:44:29] Bob: This criminal actually did attack religious groups, and we see so many investment or just scams in general that start at, with religious or other kind of affinity groups, right? So it's this whole social proofing. The people around me who I already trust, they're all doing it, why shouldn't I do it too? That's easy to fall into, but it can really lead to a disaster.

[00:44:47] Liz Weston: Yeah. Yeah, and just because somebody's being recommended by someone in your group doesn't mean that they know what they're doing, or that they're honest, or any of those other things. It's, that we used to give this advice of, if you're looking for a financial planner, ask your friends and family, and friends and family recommendations lead to things like Bernie Madoff. And so you want to be really careful about who you're asking and why. And it, once you do have a recommendation you want to do some digging and find out what their background is. You know what, it can be a fancy degree, that's great. But do they have credentials to manage your money, to recommend investments? What's happened with their other investment businesses? Like with a financial planner or a stockbroker, you go to Broker Check and you can do a pretty easy background check there that will show you if they have some disciplinary issues, whatever. But thanks to the internet, it's not that hard to do background checks. You and I remember back in the day when you actually had to go down to a county courthouse and pull records and you don't have to do that anymore. You can find a lot of issues. You may have to go a little deeper into Google Search than you used to, 'cause people can scrub their history so the first three pages look good. So go into the fourth or the fifth. You might have to do a little more digging, but it's possible. It's, you know it's something that you want to do routinely anytime you are thinking of getting advice from somebody or investing in something. You really want to dig into the details.

[00:46:08] Bob: So what else is on Liz's list of crucial ways to protect yourself?

[00:46:15] Liz Weston: Oh, there's so much. Yeah, you mentioned the stepping back and talking to somebody else about it, and at least a friend or a family member, but for, if you're talking about money, really get that professional opinion. Get a CFP. Get a fee only financial planner to take a look at it. When you are researching somebody, Broker Check is such a helpful resource. It doesn't cover everybody. If somebody is an attorney or a CPA or something else, you have to go those professional organizations to do the lookup and see what's behind them or what they've done in the past. Those Google searches, we've, there's something we call the 15-minute background check, and it's, you take the person's name and you try different permutations of it, and then you put the word "mugshot" next to it and just see what turns up. If they've been arrested before, that might come up. With their company name, without their company name, just try these different permutations to see what might be out there. As I said, some, there are companies that will go and scrub somebody's profile, essentially, so that the first few pages of Google results don't show problems, but they're out there. So you just want to do a little bit more digging than you might be used to.

[00:47:26] Bob: Now some of those things wouldn't have helped Taylor in this situation at all. This inventor wouldn't be in Broker Check, for example, so let's talk a little bit about what else you could do if someone comes to you with an opportunity to get in at the ground level of a new company. What sort of things should you do there?

[00:47:41] Liz Weston: Okay, think about, can you lose this money? That is the most important thing. Whatever the chunk of change is, how will your life change if you don't have this? How will you feel if you don't have this money? Because anything, any time someone is coming to you with an investment opportunity, I would say you have to be skeptical. I'm not talking about a financial planner putting you in Vanguard funds or something like that. That's, that's typical financial planning. If there is this unique opportunity that could be big, why are they coming to you? If it was such a great opportunity, why are they keeping it to themselves? And if they do need seed capital, why aren't they going to angel investors? Why aren't they using the equity raising opportunities that are out there that don’t involve individuals? I would be super, super suspicious of anyone who, for example, came to me and said, "Hey, I've got this thing, it's going to be the next big thing. Invest in it." And I said, "Why are you coming to me? Why can't you find money elsewhere?" This is, it's a little bit of an aside, but obviously, I also write about credit a lot and I hear from people who cosigned for somebody who couldn't get a bank loan, and I want to say, step back and look at that a minute. Why wouldn't the bank lend to them? The bank is in the business of lending. If there's any possible way to lend money that makes sense, they probably will. Why are the banks saying no? And usually there's a very good reason. The person doesn't pay their bills. And so now you are on the hook for this debt that you cosigned for. So I would bring the same level of skepticism to any kind of investment opportunity that came to me. Why isn't this being proposed to someone who does this for a living? Why are you coming to me? What's wrong with this situation that you are coming to me as an individual? So that's, it's just being really super skeptical from, from moment one, I think, will help keep you safe, or safer.

[00:49:27] Bob: I think people who haven't lived in this world, especially the tech startup world, don't know that there outside of a Wall Street IPO, there is a whole other very evolved system for getting money for...

[00:49:38] Liz Weston: Yes.

[00:49:39] Bob: ...a new technology company, and so it might sound reasonable to them, but it really doesn't work like that anymore, does it?

[00:49:43] Liz Weston: Not really. There are still obviously business opportunities that start out of somebody's garage and that need a little scratch to get going, but there are still a lot of people out there in the business of lending money to businesses to get them started, and there's things like small business loans. There's lots of opportunities for legit businesses to get money. Again, I'm not saying that there's no opportunities for the individual investor to get in on the ground floor, but I, I would just bring a whole lot of skepticism to any opportunity that's being presented to you that you didn't go seek out that's being presented to you.

[00:50:20] Bob: Bring a whole lot of skepticism. That's great advice. For The Perfect Scam, I'm Bob Sullivan.

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[00:50:37] Bob: If you have been targeted by a scam or fraud, you are not alone. Call the AARP Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can provide you with free support and guidance on what to do next. Our email address at The Perfect Scam is: theperfectscampodcast@aarp.org, and we want to hear from you. If you've been the victim of a scam or you know someone who has, and you'd like us to tell their story, write to us. That address again is: theperfectscampodcast@aarp.org. Thank you to our team of scambusters; Associate Producer, Annalea Embree; Researcher, Becky Dodson; Executive Producer, Julie Getz; and our Audio Engineer and Sound Designer, Julio Gonzalez. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Bob Sullivan.

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