Eastern Europe Investment Scam Prompts High Alert
An apparent investment scheme that dupes investors into wiring money to Eastern Europe has regulators on high alert in 16 states and five Canadian provinces.
Cease and desist orders have been issued against Inter Reef Ltd., a United Kingdom-based company doing business as Profitable Sunrise, and the firm’s owners, brothers Roman and Radoslav Novak, according to the Ohio Department of Commerce Division of Securities, which issued a warning to investors.
Investors are promised risk-free returns of 1.6% to 2.7% per day for periods ranging from 180 to 240 days, said the Wisconsin Department of Financial Institutions.
Investors are then told to wire money to financial institutions in Eastern Europe, including one bank located in the Czech Republic, according to the Wisconsin DFI, adding the sale of unregistered securities in the state are illegal.
The Ohio agency said Profitable Sunrise’s website has a so-called referral program for individuals to become regional representatives for an investment group. The site also includes Bible verses and options for donating investment returns to charity, which may indicate that the firm is targeting religious organizations.
When Credit Union Times attempted to log on to Profitable Sunrise’s website on Friday, the site was not accessible.
Cease and desist orders have also been issued by securities regulators in North Carolina and South Dakota against Profitable Sunrise.
CUNA has advised credit union members to contact their state’s securities regulators if they have had dealings with the company.
Before making any type of investment, members and investors should ask if the brokerage firm and salesperson is licensed in their state, has the security been properly registered with their state’s securities regulator, and if any enforcement action has been taken against the firm, CUNA suggested.