When it comes to investing your hard earned dollars be careful who you trust.
That may sound like common sense, but what if the person who is asking you to invest is your best friend? You still need to do your homework.
A quilting group hardly seems like the setting for a multi-million dollar scam, but that's where Katherine O'Keefe was targeted.
“Our relationship went from women involved in this quilting group to extremely close friends. Neither of us had sisters. We very much regarded each other as sisters,” says O’Keefe.
O'Keefe is talking about Robin Brass, whom she met in the quilting group. Over several years, the two women became so close their families vacationed together. When the economy collapsed in 2008, O`Keefe and her husband decided to invest with brass and her company called BBR group.
“In our mind, she was extraordinarily successful she and her husband had a house that they had built and added onto and it was an absolute showcase. They took expensive vacations, they had art work,” says O’Keefe.
Brass claimed to have a can't-lose investment formula and O`Keefe trusted her, no questions asked.
“On paper we certainly made money. We received continual statements. She would come to our house, sit down at our dining room table and go over our statements with us," says O'Keefe.
About a year and half later, everything changed.
“There were checks that had bounced; we accepted what seemed like plausible reasons for that. In retrospect should have been enormous flags to us,” says O’Keefe.
Postal inspectors say BBR was a front for an elaborate Ponzi scheme that stole more than $2 million dollars from victims.
“When you think about what this suspect had to go through to gain the trust of all these professional, good people, greed comes to mind. Unfortunately it is a powerful motivator."
Brass` Ponzi scheme, like most, only lasted as long as she continued to lure in new investors to pay old investors. Unfortunately, Katharine O`Keefe and her friends in the quilting group were on the losing end of the pyramid.
“I was devastated. My entire family was devastated. This was a person that we loved dearly and it was inconceivable to us that she had stolen from us and betrayed us,” says O’Keefe.
Robin Brass pleaded guilty and was sentenced to 8 years in prison.
Some advice worth repeating: Always research your investment advisors, be suspicious of guaranteed high rates of return and investments that promise little or no risk of loss and there is no 'sure thing' in investing.