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The Columbia Star
Columbia, South Carolina
January 22, 2004     The Columbia Star
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January 22, 2004

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o p E J CO'UM.,A STAR - sc Business JANUARY 22, 2004 " 5 John Temple Llgon ;harleston Place deserves to be in Top 25 This past weekend a time for and for Place, their best hotel. For that matter, SC's best big hotel, and Nast Traveler rates the top 25 in the What really made the was my friend's night wedding at Michael's and his recep- in the Hibernian Hall. Robert was marrying Miss his Columbia and his Boston They have been in for about two years Robert has been two masters at MIT, one in and another in estate development. status and salary in can't go unno- The wedding was cor- rect - elegant, even. But the short walk to the recep- tion at Hibernian Hall gave me plenty of opportunities to work the crowd. Inside, blessedly, there was no receiving line. A great orchestra played till 10:30. I left with some friends for my wagon on Chalmers Street, across Meeting from Hibernian Hall. Naturally I had to park in front of SC archi- tect Robert Mills's Fireproof Building. That way I could tell everyone about a house I designed on Bohicket Creek inspired by the Fireproof Building. We drove to Fulton Five (at #5 Fulton Street; surprisingly enough), only to find the kitchen closed. That was tough. I hadn't eaten at Fulton Five in many years. In the mid-90s I lived practically next door for two years, and I left carrying the most expensive tires in town. We took their recommendation for Vickery's, my old neigh- borhood haunt. Vickery's has Cuban influences, European style, and an American menu. We ordered three dishes, but eaten went three ways. My crabcakes were superb with their Cuban spices, which perfectly offset my friend's Frogmore stew samplings. Out of Vickery's and onto King Street, I had to show the group the John Temple Ligon Memorial Bricks. I bought the engraved bricks when Mayor Joe Riley was look- ing for ways to pave Irdng in 1986. I took his idea and got a little carried away. You can find me with Picasso, Frank Lloyd Wright, Alvar Aalto, the 173rd Airborne Brigade, my parents, my sister, my grandparents, my niece, my nephew, even my great aunt. Still there after all these years is the Blind Tiger on Broad, where we drank cosmopolitans till two. Since I returned to Columbia in '97, Charleston has gotten unreasonable and stopped all bar action by two in the morning. If you do Charleston before the spring crowds hit, you have a couple months - by all means try Fulton Five and share my fond find. Go Cuban at Vickery's. Barhop down Broad to the Blind Tiger. But whatever you do, return to Charleston Place, one of the top 25 hotels in America and one of the top memories in my past 25 years. Office of Attorney General cams, schemes, and scandals State Attorney Henry McMaster lay forecast that will be chal- increasingly and confusing frauds and the Top 10 investors are to see in 2004. New this year's list are fund practices, investment fraud, variable annuities. "Investors face a of seams, and scandals," d McMaster. "Our fight never stops year con discover new ways fleece the public. Sadly, r of the age-old still work to cheat of their savings as It pays to remember if an investment sounds too to betrue, it usually Investors lose bfl- of dollars annually to fraud, said. "All secu- whether state, or federal, the common goal of investors," he "I urge legislators to us continue to do our by ensuring that reg- have sufficient protect our McMaster, a member ' the North American Administrators also a new interac- Fraud Center on the .org) The cen- features details of the 10 scares, schemes scandals; tips on how detect con artists and becoming a victim; Investor Bill of Rights; on how to file investment-related and contact for each state . . regulator. 'ducatmn and awareness an investor's best against fraud," said. Th.e following rank- of scares, schemes and for 2004 is based a survey of state secu- regulators conducted the NASA&. Top 10 List of Scares, and Scandals on a survey of state enforcement and regulators) Ponzi Schemes Named for swindler Charles Ponzi, who in the early 1900s took investors for $10 million by promis- ing 40 percent returns, these schemes are a perennial favorite among con artists. The premise is simple: promise high returns to investors and use money from previous investors to pay new investors. Inevitably, the schemes collapseand the only people who consis- tently make money are the promoters who set the Ponzi in motion. Con artists typically attribute government intervention as the reason why new investors didn't get their promised returns. 2. Senior Fraud Volatile stock mar- kets, low interest rates, rising health care costs, and increasing life expectancy, combined to create a perfect storm for investment fraud against senior investors. State securities regulators said older investors are being targeted with increasingly complex investment scams involving unregistered securities, promissory notes, charitable gift annuities, viatical settle- ments, and Ponzi schemes all promising inflated returns. To learn more, visit NASAA's Senior Investor Resource Center at http://www.n asp. 3. Promissory Notes A long-time member of the TOp 10 list, these short-term debt instru- ments oin are sold by independent insurance agents and issued by little known or non-existent companies promising high returns upwards of 15 percent monthly -- with little or no risk. When interest rates are low, investors often are lured by the higher, fixed returns that promissory notes offer. These notes, however, can become vehi- cles for fraud when the issuer of the note has no intention or capability of ever delivering the returns promised by the sales person. 4. Unscrupulous Brokers Despite the stock market's rebound in 2003, state securities regulators say they are still receiving a high level of complaints from investors of brokers cutting corners or resort- ing to outright fraud to fatten their wallets. "I give credit to the increas- ing numbers of investors who are giving their bro- kerage statements a closer look andasking the right questions about unex- plained fees, unauthorized trades or other irregulari- ties," McMaster said. 5. Affinity Fraud Con artists know that its only human nature to trust people who are like yourself. That's why scammers often use their victim's religious or ethnic identity to gain their trust and then steal their life savings. No group seems to be immune from fraud. 6. Insurance Agents and Other Unlicensed Securities Sellers While most inde- pendent insurance agents are honest professionals, too many are lured by high commissions into selling fraudulent or high- risk investments, such as promissory notes, ATM and pay phone investment contracts and viatical set- tlements. "Scam artists continue to entice inde- pendent insurance agents into selling investments they may know little about," McMaster said. The person runningthe scare instructs the inde- pendent sales force -- usually insurance agents but sometimes investment advisers andaccountants -- to promise high returns with little or no risk. 7. Prime Bank Schemes Another perennial favorite of con artists who promise investors triple- digit returns through access to the investment portfolios of the world's elite banks. The negative publicity attached to these schemes has caused pro- rooters in recent cases to avoid explicitly referring to prime banks. Now it is common to avoid the term altogether and underplay the role of banks by refer- ring to these schemes as "risk free guaranteed high yield instruments" or something equally decep- tive, 8. Internet Fraud With the Internet becoming a common part of daily life for increasing numbers of people, it should beno surprise that con artists have made cyberspace a prime hunt- ing ground for victims. Internet fraud has become a booming business. The most recent figures show cyberfraudsters took in $122 million in 2002, according to the Federal Trade Commission. "The Internet has turned from an information superhigh- way to a road of ruin for victims of cyber fraud," McMaster said. "Many of the online scams regula- tors see today are merely new versions of schemes that have been fleecing offline investors for years.  McMaster also warned investors to ignore email offers from individu- als representingthem- selves as Nigerian or West African government or business officials in need of help to deposit large sums of money in overseas bank accounts. "Don't be dot.conned. If you get an email pitching a deal that can't be beat, hit delete," he cautioned. 9. Mutual Fund Business Practices Although mutual funds play a tremendous role in the wealth and savings of our nation, on going scandals throughout the industry clearly demonstrate that some in the mutual fund industry are putting their own interests ahead of America's 95 million mutual fund shareholders. State securities regula- tors, the SEC, NASD, and mutual-fund firms them- selves have launched a series of inquiries into mutual fund trading prac- tices. TO date, more than a dozen mutual funds are under investigation and several mutual funds and mutual fund employees - have either pleaded guilty, been charged or settled with state regulators. "These investigations demonstrate a fundamen- tal unfairness and a betrayal of trust that hurts Main Street investors while creating special opportunities for certain privileged mutual fund shareholders and insiders," McMaster said. "We will continue to actively pursue inquiries into mutual fund impro- prieties and are commit- ted to aggressively addressing mutual fund complaints raised by investors in our jurisdic- tion," he added. 10. Variable Annuities Sales of variable annuities have increased dramatically over the past decade. As sales have risen,so too have com- plaints from investors. Regulators are concerned that investors aren't being told about high surrender charges and the steep sales commissions agents often earn when ;hey move investors int. , :i- able annuities. So.. investors also are ,i-Icd with claims of gnvranteed returns when ,'a :-,ble nnqity returns .ctually are vulnerable to the volatility of the stock mar- ket Dhe benefits of vari- able annuities -- tax deferral, death benefits among others -- come withstrings attached and additional costs. High commissions often are the driving force for sales of variable annuities. Often pitched to seniors through investment seminars, reg- ulators say these products are unsuitable for many retirees. 'Wariable annu- ities make sense only for consumers willing to invest for ten years or longer, but they are not suitable for many retirees who cannot afford to lock up their money for a long time," McMaster said. Contact your elected officials Mayor of Columbia Bob Coble - P.O. Box 147, Columbia, SC 29217 - 733-8221;; Term: 2006 Members of Columbia City Council E.W. Cromartie H - 1607 Harden Street, Columbia, SC 29204 - 254-7243; Term: 2004, District Two Jim Papadea- P.O. Box 528, Cdumbia, SC 29202 - 779-4420; Term: 2004; At-Large Hamilton Osborne Jr. - 1201 Main Street, 22nd Floor Columbia, SC 29201-3232- 779-3080;; Term: 2006; District Four Anne M. Sinclair- 3601 Monroe Street, 29205 - 253-8773; asindair@c0hmbi-; Term: 2004; District Three Sam Davis - 950 R0sedale Arch, Columbia, SC 29203 - 754-0525; Term: 2006; District One Tameika Isaac - 722 King Street, Columbia, SC 29205 - 254-8868; Term: 2006; At-Large Members of Richland County Council Doris Corley, 932-2203, District One Thelma M. Tillis, 754- 8896, District Three Kit Smith, 254-0542, District Five Joseph McEachern, 786- 8304, District Seven Susan Brig, 788-8516, District Nine James Tuten, 754-3822, District Two Paul Livingston, 765- 1192, District Four L. Gregory Pearce Jr., 783-8792, District Six Joan B. Brady, vice coun- cil chair, 787-9712, District Eight Bernice G. Scott, council chair, 353-8812, District Ten Tony Mizzell, 776-8788, District Eleven