How Haitian and immigrant communities can protect themselves from affinity fraud

In recent years, several investigations have exposed the magnitude to which Haitians have been victimized by fraudsters in their own communities. These types of scams, known as affinity fraud, are perpetrated by scammers who target members of their own communities. The fraudsters rely on respected community and faith leaders to promote their schemes, and some are often part of these trusted networks themselves.

In a recent case, Haitians Marc Henry Menard and his romantic partner, Laesha Jean-Louis, were charged with defrauding more than 50 individuals, mainly from the Haitian American community, of at least $1.65 million. In another, NovaTechFX founders Cynthia and Eddy Petion allegedly ran a $1 billion Ponzi scheme targeting mostly Haitians in New York through prayer groups and Creole language groups on social media.

In 2022, an investigation led to EminiFX CEO Eddy Alexandre being found guilty of perpetrating a $250 million to $260 million cryptocurrency scam that attracted thousands of investors in Haitian communities across the global diaspora. The Seventh-day Adventist deacon relied in particular on that French-speaking faith community.

These Ponzi cases — along with other similar pyramid and multi-level marketing (MLM) frauds targeting immigrant communities — exploit the trust within the community and highlight the urgent need for awareness and prevention of affinity fraud. They also underscore the importance of vigilance and education in protecting oneself from financial scams. 

Here’s how to protect yourself.

Be skeptical of financial offerings in your trusted network

Affinity fraud involves scammers exploiting the trust within a community, ethnic group, religious organization or other established social network to pilfer money from the group.

Even if an investment opportunity is presented by a trusted community member — such as a pastor, doctor, nurse or public official — always verify its legitimacy. 

Be cautious of endorsements from well-respected figures within the community, as they might also be unaware that the offering is a scam. Assume the offering is not legitimate until proven otherwise.

Research the recruiter or promoter’s financial background

Verify the background, qualifications and track record of anyone offering an investment opportunity.

Ensure they are legitimately registered with appropriate financial regulatory bodies by checking the databases of those agencies. Don’t take their word for it, even if they show you a certificate.

Consult with an independent, certified financial advisor who is not connected to the community promoter or the investment.

Get advice from a lawyer specializing in financial fraud to review the terms and legality of the investment.

Verify the investment opportunity

Request detailed information and documentation about the investment. 

Check if the investment has been audited by a reputable third party.

Cross-check official government databases to see if the company or promoters are properly registered.

Avoid investments with pressure tactics that seem too good to be true

Be wary of urgent calls to invest immediately. Scammers often use pressure tactics to prevent you from doing due diligence.

If the returns seem unrealistically high with little risk, it’s likely a scam.

Don’t assume a website or app makes it legitimate 

Scammers are proficient at creating websites, apps and databases to make their frauds look legitimate. Don’t fall for it.

Don’t assume that friends and family understand 

Financial products and investments can be complex. Don’t assume that you are inadequate because you don’t fully understand how it works.

Many people in the network may assume that others understand the product. Most do not.

Don’t give them your money

If someone asks you to withdraw money from your bank account or transfer funds to theirs, don’t do it.

Don’t withdraw money from your retirement account or refinance your home to get large sums required for the investment.

Report suspicious activities

Some people assume that someone else in the group will report suspicious opportunities or promoters if they’re fraudulent. Prepare to be the first to do it.

Report suspicious activities to organizations like the Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), or their equivalents.

Regularly check your bank and investment accounts for any unauthorized transactions.

Inform community leaders if you suspect someone within the group is perpetrating fraud.

Report physical threats or intimidation 

If someone tries to intimidate you for asking questions or insisting on getting your money back, file a report with your local police.

Participate in financial literacy and education programs 

Attend financial literacy programs and fraud prevention workshops organized by community centers, non-profits, or local governments.

Engage with community groups or immigrant organizations that can offer advice and share experiences about avoiding scams.

Discuss potential investments with trusted family members or friends before committing.

Have you been a victim of fraud by someone in the Haitian community? Contact Macollvie@haitiantimes.com.

The post How Haitian and immigrant communities can protect themselves from affinity fraud appeared first on The Haitian Times.

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How Haitian and immigrant communities can protect themselves from affinity fraud was first posted on June 14, 2024 at 12:53 am.