OFIS Warns Michigan Citizens of Bogus "IRA and IRS Approved" Investment Schemes

February 8, 2008 -- LANSING – With Michigan investors preparing to open or contribute to their Individual Retirement Accounts (IRAs) before the Tax Day deadline on April 15th, Michigan Office of Financial and Insurance Services (OFIS) Acting Commissioner Ken Ross warned them that their retirement savings are in danger of being ruined by investment schemes falsely promoted as "IRA Approved" or endorsed by the IRS.

The North America Securities Administrators Association (NASAA) estimates that tens of thousands of unwary investors have already invested hundreds of millions of dollars of their savings through IRAs and other tax-deferred retirement savings vehicles that will end up being largely or entirely worthless.

“The truth is there is no such thing as an `IRA Approved` investment and the IRS does not give its blessing to specific investments,” Ross said “These schemes attempt to fly below the radar of state and federal securities laws designed to protect investors and, in doing so, fail to indicate the extremely high likelihood that investors will lose 100 percent of their principal.”

Promising high returns that will supposedly put investors on "Easy Street" with a bonanza of retirement income, the "IRA Approved" investment schemes range from the latest in high-tech (including wireless cable television and specialized mobile radio) to exotic livestock (such as ostrich farming) to real estate investment pools.

Some "IRA Approved" schemes have been promoted through slick television "infomercials" and radio ads that turn the tables on investment victims by getting them to place the first call to the illicit promoters, rather than the other way around. The promoters cloak themselves in the legitimacy of the IRS and also seek to evade the consumer protection requirements of state and federal securities laws.

OFIS urged Michigan investors to take these steps in order to avoid falling victim to an "IRA Approved" investment scheme:

● If Michigan investors believe that may have uncovered a bogus IRA scheme, please contact OFIS toll-free at (877) 999-6442 or online at www.michigan.gov/ofis

● Exercise extra caution during the tax season when it comes to making IRA investments. Just because the pressure may be on to make a decision about your IRA or other retirement plan contribution, don’t make the mistake of going along with the first sales pitch you hear.

● Proceed with caution when you are encouraged to invest in a "general partnership" or "limited liability company." Many of the current crop of high-tech, real estate and exotic livestock deals are packaged as "general partnership" or "limited liability companies" in an attempt to evade the consumer protection requirements of state and federal securities laws.

Michigan investors are also encouraged to attend one of OFIS’s “Investor Education @ your library” presentations to avoid falling victim to an investment scam and to educate themselves on how to improve their personal finances. For more information visit: http://www.wwj.com/pages/637880.php

.Source: Michigan OFIS

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