A Real Hawaii Story on Investment Fraud

Here’s a real story that happened in Hawaii:

The victim was a 76 year old female from Japan.  She had a limited command of the English language. Let’s call her Mrs. Tanaka.

Mrs. Tanaka had about $300,000 she received from her late father’s estate and she planned to use the money to purchase a home that was being constructed in town.  Mrs. Tanaka was looking for a safe investment when she saw an advertisement in the Honolulu Advertiser for a high-rated FDIC insured CD.  It should be noted that Mrs. Tanaka had been diagnosed with macular degeneration.   

Mrs. Tanaka called the number on the advertisement to look into the CD.  But rather than helping her invest her funds in an insured CD, the company that answered Mrs. Tanaka’s call talked her into purchasing several viatical settlement contracts.  She was assured that her investment was guaranteed and that they could deliver her investment to her on a specific date.  But she didn’t really understand the investment.  The reality was that viaticals are not guaranteed, are risky and often lock-in your money for a while.  The company could not deliver her money when promised.  

Mrs. Tanaka was confused and upset.  She contacted our office.  We opened a case and started to investigate.  It turns out that the company wasn’t even registered with the Securities Branch of the DCCA.  This violates the law since broker-dealer and investment adviser firms in Hawaii have to be registered with us.  Eventually, we were able to get her funds back and fine the company.  The company is no longer doing business in Hawaii.

Mrs. Tanaka in my story has asked to be anonymous only because she didn't want her children to find out what she had done.  Our offices can protect your confidentiality up to the point we actually take action.  Mrs. Tanaka went through a lot of pain and anxiety but the happy ending to the story is that our Mrs. Tanaka got her investment back and is now living in her own home.  

To verify the registration of an investment professional or product, call our

Securities Compliance Branch: (808) 586-2722

To report investment fraud, call our

Securities Enforcement Branch: (808) 587-2267 / Toll Free 1-877-HI SCAMS