SEC: Scams may target $3.4B Indian settlement
The Securities and Exchange Commission warned Native Americans on Friday against scammers who may be coming after their share of a $3.4 billion settlement with the U.S. government.
U.S. District Judge Thomas Hogan on Wednesday gave final approval to the settlement, 15 years in the making and meant to compensate for more than a century of government mismanagement of Native American land royalties.
The first payments are expected to go out to between 300,000 and 550,000 plaintiffs after a 60-day appeals period due to end Sept. 26.
The SEC issued an alert Friday to warn those plaintiffs to watch out for investment scams. Affinity fraud — scams that target particular ethnic or religious groups — usually involves somebody pretending to be part of that ethnic group, or enlists somebody from the ethnic group to help dupe the victim, according to the SEC.
‘Anytime there’s a lump-sum payout to a particular group, that can be a fairly attractive target for fraudsters,’ said Owen Donley, chief counsel in the SEC’s Office of Investor Education and Advocacy.
One clue of a scam is the use of high-pressure sales tactics, such as being approached by a person who says he has a great investment but that a decision has to be made immediately. Another is the promise of inordinately high returns on an investment, like 20 percent a month.
‘That’s a red flag,’ Donley said. ‘Anything that sort of sounds too good to be true, it usually is.’
The settlement is the result of a class-action lawsuit brought by Browning, Mont., resident and Blackfeet tribal member Elouise Cobell. She claimed the government squandered billions of dollars in land trust royalties owed to hundreds of thousands of individual account holders across Indian country.