As you read this, there are thousands of people across the U.S. who have invested in fraudulent schemes through self-directed IRAS ("SDIRAS") and don't know it. Yep, I said they don't know it. The reason these defrauded investors don't know they are victims is because everytime they go online and view their SDIRA account statements or they receive a copy of their SDIRA account statement in the mail-its says that their SDIRA has either increased in value or has maintained its value since the last SDIRA account statement! So these self-directed IRA investors, who are besmitten with short-lived investment euphoria, blissfully view their SDIRA account value. These SDIRA investors, who don't know yet that they are victims of investment fraud, feel sorry for all of those poor schmucks who weren't smart enough to put their money in a SDIRA so that they could invest in such highly sought after investments such as unsecured promissory notes, shell companies, illegally issued stock, nonexistent precious metals, insolvent businesses, and, my personal favorite, nonexistent real estate.
I have talked to people from all over this country who have invested in all of these "illusive" investment schemes through Fraud Promoters utilizing SDIRAS to perpetuate their schemes. Yet these SDIRA investment fraud victims keep asking me the same question-how is it possible for the Fraudsters to get away with this? My simple answer-because they can and they know it. No state or federal regulatory agency monitors, regulates or even notices the investments made in SDIRAs so it is really the Wild Wild West of Investment Tools.
It is no wonder Ponzi schemers love SDIRAS-there are not any other options to steal the retirement monies of senior citizens and other targets except through a SDIRA because regular IRAS are regulated, monitored and have strict investment guidelines for the types of investments that are permitted. Oh and did I mention that broker/dealers are required to have insurance and there are other financial protections for those investors against fraudulent losses?However, with SDIRAs the Fraudster/Cowboys are limited only by their creativity as to what they can sell as a SDIRA "investment."
If you are a SDIRA owner, run-don't walk to your phone. Call your SDIRA Custodian and ask them to tell you what the current value of your SDIRA is. Then ask your SDIRA Custodian how they know your SDIRA has that value and what information that value is derived from.
You will be shocked at the answer from your SDIRA Custodian particularly in light of the amount of Custodial fees you pay. Do you have any idea exactly what your SDIRA Custodian does to earn their very expensive fees? Well, we don't either. But we do know that the SDIRA Custodian's fees are based upon the stated value of your SDIRA.
So, wait, that means that the SDIRA Custodian receives less fees if the SDIRA account value declines. Are you starting to see the real picture here? Exactly-the interests of the SDIRA Custodian are actually aligned with that of the Ponzi Schemers and Fraud Promoters. As long as the SDIRA owner who has been swindled doesn't know their real SDIRA account value (which is $0), the Fraudster can continue soliciting new investors and stealing more money and the SDIRA Custodian can continue to collect their hefty fees. As I have said before- SDIRA Custodians and Fraud Promoters have a Marriage Made in Hell.
BEWARE-SDIRAS ARE USED TO PROMOTE PONZI SCHEMES AND ARE ROUTINELY USED BY FRAUD PROMOTERS TO STEAL THEIR TARGETS' MONIES. DON'T BE A VICTIM-THERE ARE TOO MANY ALREADY!