The actions to mitigate the financial stress caused by our nation’s COVID-19 response were swift and significant; the federal government was throwing checks to every citizen, giving loans with extremely favorable payback requirements or total forgiveness to nearly anyone who asked, and many people received massive amounts of money that they had no real business receiving and with essentially no near-term oversight. In short, it was a fraudster’s dream.
Until…it wasn’t. And what looked like no oversight was only no immediate oversight, and significantly delayed investigations and prosecutions eventually ramped up. Enter Scottsdale business Blueacorn, a firm that was started at the height of the pandemic in order to process Paycheck Protection Program loans for businesses. They are now accused of falsifying all sorts of paperwork as well as taking illegal kickbacks.
This story is one amongst many in this country, perhaps only more notable than others because one of the defendants, Stephanie Hockridge, is a former ABC15 news anchor. But it does speak to perhaps a wider issue: Scottsdale as a hotspot of financial crimes.
For a city of its size, Scottsdale has had a significant number of issues, and while this is the first significant COVID-related issue we can find, it does lead us to a more persistent issue: fraud and crimes in financial planning. In just the last two years there have been three such cases.
In 2023 David Allen Harbour was convicted of investment fraud and sentenced to eight years in prison. Last October financial advisor Luke Johnson was convicted and ordered to pay restitution for misleading investors in a Ponzi scheme. And last July, Scottsdale-based United Planners Financial Services was ordered to pay restitution because of the actions of one of its advisors.
Three such cases is a significant number in this city, but it can also be explained away fairly easily: a retirement haven and a city with significant wealth, it will naturally have a lot of investment firms and representatives who will try to cater to that audience. With that, you will naturally have some bad apples.
While bad actors may be found eventually, the onus is on you to make sure that you avoid fraudulent situations where possible. A basic rule is that if it sounds too good to be true it probably is. High returns with low risk are not possible. If an “investment opportunity” comes with any degree of pressure or with “a limited time”, you should avoid it. Check the credentials of the people and firms who are pitching you on investments. There is nothing wrong with boring investments.