Music mischief: Millions lost in entertainment investment scam
NEW YORK — Not every solicitation you receive in the mail contains truthful information. In one scheme, the con men used the names of some well-known entertainers to lure investors into the scam.
Sting, Seal, Gloria Estefan and The Red Hot Chili Peppers were all artists allegedly represented by a company called Exposure Management.
Marketing materials sent out by Exposure Management.
Marketing materials sent out by a group of con artists claimed this was the case.
"Wow, there’s all these you know, high-profile superstars here in this company, so if you know it’s going to go public, this is a great investment," U.S. Postal Inspector Michael DelGiudice recalled victims thinking about the investment.
It was exactly what Ahmed Awan and Alan Labiner wanted potential investors to think. The problem was the materials and the business were all bogus.
"They started off small with a low price and promised it was going to go higher," recalled an elderly victim who didn't want to be identified.
The victims says the pitch to invest in Exposure Management came in a cold call.
"I have been solicited for every imaginable thing – stocks bonds, sunken treasure, stamps, coins, movie rights – everything," the victim explained.
He lost $47,000 and say the materials he received in the mail lured him in.
In all, 150 people lost almost $7 million.
hmed Awan (left) and Alan Labiner (right)
"At some point, you know, they just thought they could make more money, you know, scamming people than actually in the industry," DelGiudice said. Ahmed Awan (left) and Alan Labiner (right)
Inspectors say if investors checked, they could have found out the men were no longer licensed to solicit clients.
The takeaway from this case is that research is key.
"Look up the company name. Look up the stock that they are trying to sell you, just so that you know, you cover all your bases to make sure that it’s legitimate," advised DelGiudice.
Labiner was sentenced to 10 years in prison for his role in this scheme. Awan got a 20 month prison sentence.