TYPICAL STRUCTURES OF INTERNET INVESTMENT FRAUD

Numerous online forms of investment fraud mimic frauds previously committed over the phone or through direct mail. The Internet have provided new opportunities for defrauders including the ability to easily construct and develop online advertising, bulletin boards, online newsletters, e-mail, chat and Websites. For this reason, investment fraud over the Internet has increased and the Security Exchange Commission and the Federal Bureau of Investigation are aggressively prosecuting these crimes. In 2006, of all of the types of Internet fraud, the number of complaints received by the FBI for investment fraud equal 1.3% of over 200,000 such complaints. This article explains the most popular form of Internet fraud used by criminals in the United States.

The following questions have been addressed in this article:

What are the elements of a pump and dump scheme?
Can the elements of the pump and dump scheme be applied to short selling stock?
How do defrauders use a pyramid scheme to commence fraud?
What are other scenarios of online investment fraud?

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