Investment fraud carried out by very skillful "investment advisors" and "investment sales representatives" is an increasingly common phenomenon today. Normally, the perpetrators have international connections.
 
In most cases, you will initially be contacted by telephone and invited to invest in a highly profitable foreign share. You will always be told that a fast decision is required, otherwise you will miss an "excellent investment opportunity". The most common argument is that the caller has insider information and the transaction is completely exempt from tax. Sometime, the advisor will also want to meet with you and the venue suggested is usually one of the better hotels in the area.
 
The frauds are conducted with the help of expensively produced, confidence-inspiring brochures and website presentations. The frauds are skillfully planned and are known within such circles as boiler-room activities and cold calling. The perpetrators follow a set plan that has been prepared over a long period. Such operations are actively pursued for periods of several yaers.
 
To avoid detection, the perpetrators operate under what is called The five flags theory. This is based on them working in at least five different countries.
 

• Country 1. Sales persons based here make calls to prospective clients, but not to clients located in this country.
• Country 2. Clients are based here. Clients are often based in several countries.
• Country 3. Products are based here, usually in the form of shares or other financial instruments.
• Country 4.  Bank based here, to which clients must send payments for their investments.
• Country 5. Perpetrators resident in this country. 

 
In most cases, the person who calls you initially will use a false name. The company that he/she represents will not have a permit to conduct financial operations. The company’s address is often false or incorrect.