By John Wasiliev

Australian investors are losing millions of dollars in investment scams run by overseas-based conmen, prompting an alert this weekend from the Australian Securities and Investment Commission.

The ASIC is alarmed by the number of people falling prey to the schemes, and by the sums of money involved. Some individuals have lost as much as $120,000.

Mr Tim Phillips, the ASIC director of enforcement, said it was particularly worrying that many of the victims were people with investing experience. They had been conned because the scams had been designed and refined to look both inviting and plausible.

The conmen employ a range of techniques including cold-call telephone campaigns with well-rehearsed and clever scripts designed to give a reassuring impression. The calls are made from all over the world and the callers use names very similar to the best-known names in international finance. For example, Pryce Weston (which sounds like Price Waterhouse) has been used, as has Knowle Sachs (Goldman Sachs) and First Federal (First Boston).

The same goes for the investments they offer. Names are twisted to sound like real companies, while in other cases the names of real companies are blatantly used.

The alert this weekend follows a warning a month ago which sparked a flood of responses from victims.

The ASIC international relations director, Ms Rose Webb, said that in the weeks since the warning, more than 140 people had contacted the regulator about actual and potential investments worth well in excess of $1 million.

"We had people who were about to send large amounts of money, from $5,000 to $28,000, when they heard the warning and stopped," Ms Webb said.

Unfortunately, others had already lost substantial amounts, many at least $10,000 and some amounts ranging from $60,000 to $120,000.

It is believed promoters have mailing lists to identify possible investors. Unsolicited letters, "free" newsletters and faxes are widely used to build up a case for investing. Faxes, especially, are used to send targets supporting material such as purported analyst reports on the alleged investments.

All of them follow a plan designed to pressure people into sending money. Once the caller detects that interest is being shown in what they claim to offer, the selling pressure mounts.

In some cases, people who do not suspect that the schemes are crooked just send money to stop the calls, in much the same way as some people react to a persistent insurance agent. One victim of a Geneva-sourced scam, an experienced investor who chose not to give his name, said he ultimately did send some money.

"The calls would come every evening just when I was sitting down to dinner. The reason I was interested was because I'd been thinking seriously about investing overseas, anyway, and it seemed to come at the right time.

"The organisation, Dundas & Syme, seemed respectable enough and they sent me a glossy corporate brochure."

The caller sounded as if he knew what he was talking about. The idea sounded okay and the suggested investment was in a company on the US stockmarket with a name that could be checked on the internet.

"They faxed me a report and just kept calling me," the duped investor said. "I wasn't interested in investing, because of the way the market was at the time, but in the end I sent them the minimum $5,000 because I thought I was building up a contact that would give me easy access to the market later when I really wanted it."

The transaction involved sending money to the Gibraltar branch of NatWest Bank, and confirmation of the investment was faxed from Geneva in a way that made it look bona fide.

It was only after the ASIC warning that the man found he had been conned.

There was no response from the Geneva telephone or fax numbers and the Gibraltar bank was most unhelpful about providing information, claiming client confidentiality.

Mr Phillips said the standard warning from the ASIC was to hang up on all calls from overseas inviting you to invest. No reputable organisation would make such proposals, because it would be aware that it was illegal to offer investments to people living in Australia from anywhere in the world without either a dealer's licence or an approved prospectus.

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