A new study finds Arizona ranks No. 8 losing $88 million to investment fraud in 2022. Nationally, $3.82 billion was lost, up from $1.6 billion the previous year.

LEARN MORE: 10 apps where people were scammed the most in 2021

Investment fraud has become the No. 1 costliest type of fraud in the U.S. The unprecedented rise is due to crypto-investment scams which stole a record $2.57 billion last year. The future of fraud has arrived in 2023 with artificial intelligence ‘deep fake videos’ and ‘voice cloning,’ while traditional methods such as Ponzi and pyramid schemes continue to devastate too many Americans.  

Carlson Law, an investment fraud law firm, today released its first annual study on the State of Investment Fraud in 2023 after analyzing the most recent data from the FBI and the FTC.

Victims in Arizona lost an average of $143,829, the No. 9 most in the nation, while the state has the

No. 11 highest rate of investment fraud with 8.8 complaints filed per 100,000 residents.

4 Types of Investment Fraud to Avoid in 2023

1. AI ‘Deep Fake’ and ‘Voice Cloning’ Fraud: A woman lost $750,000 after watching a video of billionaire Elon Musk which convinced her to go to a website and buy shares of stock. She invested, received documents showing huge returns on her investment. Unfortunately, the video was an AI generated deep fake which used voice cloning technology and her money was stolen.  

How to Avoid: Signs of a deep fake video may include excessive blinking, no blinking, or changes in skin tone and lighting. Be wary of videos from celebrities offering investment opportunities.

2.   Crypto Initial Coin Offering: Similar to an IPO, a company seeks to raise capital for an ICO that promises high returns on an innovative project that does not exist. They use fake websites and whitepapers to lure investors into buying tokens. Once you invest, they disappear, leaving you with worthless tokens.

How to Avoid: First, put the founder’s image, email, and phone number into a reverse search platform to confirm their identity.  Then, thoroughly research them, and be skeptical of ICO’s.

3.   Real Estate ‘Phantom Property’: Real estate agents create property listings for a lucrative real estate investment opportunity. They have fake permits and titles to look legitimate, but it is a phantom property that does not exist.

How to Avoid: Documents may have visible deletions, alterations, or use different handwriting and font. Visit the property before investing and research the agents involved.

4.   Ponzi Schemes: Made famous by Madoff, an advisor promises high returns to attract new investors. No investments are made, however. The returns are paid using money from new investors. The scheme collapses when new investors can no longer be found.

How to Avoid: Red flags include guaranteed returns, secrecy, and lack of transparency. 

To avoid becoming victims, Americans must remain vigilant and learn how to spot investment scams.  If you believe you are the victim of investment fraud, file complaints with the SEC,  FTC and the FBI.