DETROIT – One of the most memorable bromides I learned while getting my financial education was from my tax professor who warned, ?Pigs get fat, hogs get slaughtered!?
Sage words indeed for us all!
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That saying came to mind today as interviewed Dennis Nazelli of Livonia. The retired Detroit newspaper union man saved, with the help of his hard working wife Mary, $89,000.
They lost it all, allegedly, to a Brighton ?investment advisor? who tonight sits behind bars. His name is John Joseph Bravata. The 43-year-old owner and operator of BBC Equities LLC of Southfield faces charges of defrauding investors in his real estate company to the tune of $50 million. Later BBC became known to those close to this case the Billionaire Boys Club.
The feds said Bravata and his staff invested about $20 million in specious Ohio real estate that at the end of the mortgage meltdown was all but worthless. But the rest of the money went, allegedly again, to Bravata and his partner Richard Trabulsy. Their most infamous sales pitch was to tell investors they would not take a salary or make any money unless investors made a profit. But a closer look at the books shows in a two year period, Bravata paid himself roughly $5 million, and bought things like a Ferrari, a Maserati, a Corvette, Sea Doo water craft and even ?anti-aging? treatments.
The court documents we pulled up in this case today,Security and Exchange Commission Vs. Bravata, show a judge who froze Bravata?s assets as part of this investigation had an interesting take on all of that. While citing the sales pitch of a win-win solution for investors that wasn?t, he described Bravata as ?eating dessert first.? Translation: the hogs are about to get slaughtered!
This is the second local Ponzi Scheme I?ve covered now in the past year. I did a number of stories on an investment advisor by the name of Keith Epstein, who used his ill gotten investment gains into keeping women [strippers] and hanging out in casinos. He pleaded guilty for stealing from old ladies and retirees. Nothing more about covering the business world gets my blood boiling hotter than watching guys like this operate. It is difficult enough to get Americans to save their money these days, but the Ponzi schemers give them still one more reason not to!
Look, I?ll be immodest here. I spent years working day and night, while doing my day job at WDIV, to become the first ever working journalist to pass the unbelievably difficult Certified Financial Planner exam. That education, and the ethics training involved, taught me the value of operating with impeccable ethics. But that point was first driven home to me by my first teachers: my parents!
Stealing is wrong!
Stealing other people?s money is wrong. Yet, preying on other people?s trust and stealing from them is unconscionable!!! Thus, it makes me very angry to find investment advisors out there so willing to plumb the depths of depravity on someone else?s dime! There ought to be a law! Oh wait, there is! But not enough to prevent this tragedy before the horse is out of the barn.
Let?s get back to Dennis and Mary Nazelli. Their retirement plans are ruined; they can?t do the limited travel their savings would have allowed. They can?t sell their house and still have to pay on a second mortgage to boot. They will likely have to work much longer than they ever wanted; through no fault of their own? you could say. But they, though victims, are partly to blame. A nephew talked them into putting all their money into one basket. This is cardinal sin number one in the investment world. Diversifying your money is a vital protection. They know this now that it is too late. They are willing to tell their story as a warning to others. They are brave and upstanding to the end!
Before you invest another dime please check out this link on the Board of Certified Financial Planners website on how to protect yourself, this is as good a listing of what to do and what to avoid I?ve ever seen. I hope you do not find yourself getting slaughtered with the hogs.
- Learn how to protect yourself. Check out the CFP Board's Consumer Guide To Financial Self Defense.