One of our readers sent us an email explaining how he was scammed. We are including it here with permission. Rest assured that the name of the victim has been changed.

“Dear Grace,

I will give you a brief background of what I was doing in the market and
where I was at as I believe these scammers pay for leads, from research
companies, based on a certain criteria.

I have been trading shares on the Australian Stock Exchange and was
interested in trading options in the future.As you know we had the China
scare and as such I had decided that when my positions were stopped out I
would keep the money in cash until I was confident an uptrend or downtrend
was in place.

A downtrend of course would require me learning to trade options.

I initially received a phone call from a man called James Cohen,which I was
sceptical about.
James claimed he worked for a company called Metro Financials who delt in
futures and Options in relation to currency trading.
The deal was to trade on the Aus dollar appreaciating against the US dollar
and he then explained that if you put the minimum contract of 6 option it
would cost $6000.

If the dollar went up 1 cent you would be up $6000 the most you lost was the
entire $6000.

James was very well informed about the state of the economy and trading.

He went into great detail as to the reason why the dollar would
appreciate.Australias advantage was its resources,an Australian government
official had been out to the US and claimed the AU D would reach .85 cents,
the US had looming problems with paying for Iraq etc,the government was just
printing money and eventually there would be preassure on the US dollar.

All of the above is probably correct so the salesmen are very well trained.

All the time he is talking to me he must have had a tape recorder in the
background playing sounds of people trading .

The picture I have now in my head is that there were probably say 10 people
in a room with phones ,tape recorder ,live financial news and every time
they received some money they would all be grinning.

All I can think of now is what do they tell their partners, children
,parents or friends when they get home from work. ” How did you go at work
love” I did very well today I scammed a million dollars even got one old
lady to put in her life savings so lets eat out tonight ,will we dirve your
Mecedes or my Porche”.

A lot of money goes into setting up the scam as not only are the sales men
well trained they even develop web sites.

I said to James I do not know if this is true or you are trying to rip me
off,this is when the fake web sites come in.

James directed me to their Web site Metro Financials which has been copied
from other legitimate sites.

From this web site they had a link to AFOEX ( American Futures and Options
Exchange) and this is where the transactions are supposedly placed.
On this site you have a summary of your account balances and any trades you
have initiated all trades must go through your broker.On this site they also
had an advetisement for The Australian Financial Review which is a well
respected financial newspaper here in Australia all this making the site
look authentic.

The next step is to fill out a form so that you can be registered on the
AFOEX .

James said that when you fill out this form and fax it put his name on top
otherwise it may take days to get to him as his company is very large as I
now estimate about 10 people.

The money that is to be sent is to go through a clearing house and on the
AFOEX web site you can check if it is a regitered clearing house.
All the time you are James’s best mate he cant do enough for you and if you
send the money straight away he can pull a few strings and get you in early.
It normally takes 7 days to clear the funds but if you send a telegraphic
transfer and fax him the confirmation he will get your funds working
straight away.

You now get a call from an official from the AFOEX checking your details and
running you through the web site.This official is probably sitting next to
James.

He tells you that this company is good and not to be greedy if they say sell
do not try to increase your profits by hanging on. This makes you think that
Metro must be good and conservative.

Metro receives the Fax of the telegraphic transfer and gives you a call
saying that an official from AFOEX will call and ask you questions.
The official calls and confirms with you that you have authorised the trade
an you know the risks.All this of course gives you more confidence that all
is legitimate.

James calls and congratulates you then says that a Mr Phillip Walsh who is
the best trader on the floor will be managing your account and he will call
me later.

This is the classic sting to get more money but because of all the previous
assurances and cliams to legitamcy you belive nearly any thing.
Phillp gives you an impressive background of his previous working life and
the many years he has been trading.

He then outlines his conservitive approach to trading essentially you have
20 options on the dollar 5 are for insurance they are put option at AU .75
and 15 call option at .80 you buy at .775 you sell the first five calls at
.79 the next 5 at .80 and the next at .81.

To let him trade this conservative approach for you you will need to put in
extra. The first amount he said was $100000 as all his clients invest at
least this of course I said not that much.

He can understand and he wiil do me a favour and trade $20000 and when I am
comfortable I can put in more money.

A telegraphic transfer is faxed off but luckily the clearing house has been
closed down by authorities here and in the US.

Phillip has already purchased 14 extra options for me an they are now in my
account at the ficticious AFOEX.

I receive a call from Phillip saying that due to too much funds going into
the clearing house they had to send the money back to me but that I am still
in the market and he will arrange for another clearing house.

I receive a call from an official at ASIC here in Aus saying that it is all
a scam and that they closed the clearing house down.

Phillip calls and informs me of the new clearing house so if I send the
money quickly he can cash out the options for a tidy profit.

Knowing that it is a scam I say just cash out the existing options and send
me the money then we can start again.

Phillip says I cant do that as it is air trading I need to submit the
remaining funds then he can cash out.

I can just imagine the laughter amongst the 10 people when he says air
trading.
The last I heard was that Phillip will ring me on monday and if I give him a
good excuse why I cannot send any more funds he will pleade my case to the
AFOEX as if..

The thing to remember is that do not be rushed into anything there are always
more opportunities and legal ones.

Only deal with what you understand these scammers sound very legitimate
You have to research the claims if you do not know how to then do not
proceed.”

Posted in Categories: Options, Scams.