The Sneeze: Guide to Avoiding Illegitimate Investments

photo credit: iStockphoto
photo credit: iStockphoto

Elaine and George Butcher, a couple in their late 60s, live outside of Spokane, Washington. Elaine is a retired teacher and her husband George, a retired principal. When George is diagnosed with terminal cancer he suddenly realizes he doesn’t have enough money to provide for Elaine after his death.

During his weekly chemotherapy treatments he confides in his doctor that his investments are not making enough money to leave behind anything substantial for his wife.  Dr. Lewis mentions he is investing in a company called Resource Development International (“RDI”) that is providing guaranteed returns of 6% per month. Desperate to increase his nest egg, George jumps at the opportunity.  The doctor says he will have his broker give him a call.

The next evening, Gary Roberts, an insurance broker in Spokane, meets the Butchers at their home. They sit around the kitchen table and Gary says he offers only his most affluent and aggressive investors the chance to invest in RDI.  He says the minimum investment is $100,000 and interest is guaranteed at 6% per month.  Gary hands the Butchers a booklet about the investment and elaborately and confusingly explains their investment will be pooled with other investments until $12 million is raised and that $12 million will be deposited into foreign banks and transferred between banks as collateral for various loans that will generate enough interest to pay investors the guaranteed return.

This discussion makes Elaine very nervous.  The minimum investment of $100,000 is nearly half of their entire savings and the process is too complicated for her to understand.  She prays for a sign they should make the investment. Just then the broker lets out a huge sneeze. This was the sign!

With the affirming sneeze from Gary, the Butchers invest $100,000 in RDI. One month later the Butchers receive a check from RDI for $6,000 and a statement showing their principal investment of $100,000. George and Elaine celebrate their good fortune. More