Atlanta businessman Calvin Darden Jr., a career fraudster with previous convictions, is facing 12 years in prison for his latest scam, convincing former NBA player Dwight Howard to part with $7 million for a fake bid to purchase WNBA team the Atlanta Dream.
Darden Jr. worked with Howard’s agent Charles Briscoe to convince the baller that the scam was real. Howard was duped into believing other big stars like actor Issa Rae, tennis star Naomi Osaka and filmmaker Tyler Perry were also investing in the team.
However, court records show that many of these supposed investors had never heard of Darden Jr., much less had any business dealings with him.
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For his involvement, Charles Briscoe is facing six months of house arrest, a three-year supervisory period and a penalty of $1.5 million.
Darden Jr. also duped former Houston Rockets player Chandler Parsons into “loaning” $1 million to NBA prospect James Wiseman. Wiseman was not involved in the deal, and Darden Jr. reportedly spent the money on luxury goods for himself.
While these large sums of money may convince you that scams of this type only happen to the rich and famous, the reality is that fraudsters can target anyone. You have to stay vigilant and informed to ensure you don’t become a victim.
Here’s how to help avoid falling for investment scams, how to vet potential business partners and deals — and how to know when to walk away.
Surround yourself with advisors you trust
Warren Buffett has offered some sage advice from his long career.
“We look for three things when we hire people. We look for intelligence. We look for initiative, or energy. And we look for integrity,” he says “And if they don’t have the latter, the first two will kill you.”
Integrity is critical, as placing your trust in the wrong person can be financially fatal. Taking the case of Charles Briscoe: the agent was not only trying to outsmart Howard, but also duped other NBA players into buying more than $5 million in overpriced life insurance policies.
When you choose a new financial advisor, a new business partner or even a service provider like a mortgage or insurance broker, be sure to do your homework on them. Check for any required certifications, and membership in professional and regulatory organizations. Ask for references, and also look for testimonials from people in your own network whom you trust.
Most of all, if the terms of an offer sound too good to be true, they probably are. Trust your gut, and be willing to pass on any opportunity that gives you a bad feeling.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Beware of impostor scams
In the case of Darden Jr., he pretended to be a legitimate businessperson, with many important contacts, in order to convince Howard to invest in his scheme. But, as the Federal Deposit Insurance Corporation (FDIC) notes, impostors can also pretend to be someone you know and trust in order to convince you to give them money. Or, imposters may claim that they are members of a bank or government agency in order to gain your trust.
These scams are becoming more sophisticated thanks to the use of AI. The telltale signs of scams can include bad spelling and punctuation, low-quality or low-fidelity images and logos, and suspicious email addresses — although those are now largely absent from the emails, social media posts and text messages of scammers.
There are also sophisticated scams involving AI-generated voice recordings and video. If you encounter someone claiming to be someone you know, or to be a business contact of a person you know, be sure to ask questions that could not be answered by a third party, or to check in with your supposed mutual contact for a reference.
Mortgage and foreclosure scams
The FDIC warns of another common type of business scam involving fake mortgage lenders, loan servicers, financial advisors or representatives of government agencies who claim they can help with your mortgage.
Whether you’re in the process of buying a new home, acquiring new real estate for investment purposes or at risk of losing your principal property due to foreclosure, these criminals prey on people who lack legal knowledge and the typical business practices of lenders and financial professionals.
If you’re contacted by a company or individual claiming that they can offer you a much lower mortgage rate than average, or can save you from foreclosure, don’t offer up any personal information or money until you can be sure they’re legitimate.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
