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State Regulators Crack Down on Scams Aimed at Immigrants

May 01, 1997|DEBORA VRANA | TIMES STAFF WRITER

State regulators on Wednesday ordered several Los Angeles-area firms to stop selling illegal futures contracts in foreign currencies and gold and silver to mostly Chinese, Korean, Hispanic and Filipino immigrants here.

The firms, along with 20 individuals, were selling the contracts as part of "affinity scams," in this case targeting immigrant communities, according to the state Department of Corporations, the agency that regulates securities sales in California.

Such scams target groups of people who share the same profession or community and get friends and families to sell securities to one another.

"Affinity fraud is particularly insidious because it exploits people's trust in their own communities," said Department of Corporations Commissioner Keith Paul Bishop. "The perpetrators of this kind of fraud have focused on Southern California, which is home to large numbers of immigrant groups."

The firms, many of which don't open until after 5 p.m., were selling securities without a license, authorities said.

"The Koreans prey on the Koreans, and the Hispanics prey on the Hispanics," said William McDonald, assistant commissioner with the state Department of Corporations. "They bring in employees who get commissions by selling contracts to their friends and families."

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