|Fredrick D. Scott, arrested by the FBI for investment fraud|
In February 2010, the St. Louis American reported on an attempted investment scheme between the then-25 year-old Fredrick Douglas Scott and the Mayor of East St. Louis, Illinois, Mr. Alvin Parks, Jr. Mr. Scott, the self-appointed CEO of his own hedge fund (ACI Capital Group), told Mayor Parks that if the City of East St. Louis paid him $300,000 a year for three (3) years that he would help turn things around for the financially struggling City by bringing in $30 million dollars in outside capital. As the Riverfront Times also reported back in 2010:
Seems to be just a couple problems with that proposal:
- The city is flat broke and may not be able to pay any of its employees this month.
- Scott was already supposed to bring capital infusion to the city. That's why they gave him the exclusive negotiations rights to develop [city] property.
A few months after Mr. Scott tried to swindle East St. Louis out of hundreds of thousands of dollars, Ebony Magazine, in its May 2010 issue, named him among their "Top 30 under 30". An error that the good folks over at Ebony surely could have avoided had they done their due diligence into Mr. Scott's background. According to Mr. Scott's own Linked-In page, the highest education he ever received was a high school degree and he has only briefly held down one real job (for less than a year, mind you) before naming himself as President/CEO of several of his own self-promoting companies. Not exactly "Top 30 Under 30" material.
But this is just the tip of the iceberg, ladies and gentlemen.
According to the federal Criminal Complaint which you can read HERE, Fredrick Scott, who is Black, used the notoriety that he received from the Ebony article to defraud hundreds of thousands if not millions of dollars out of Black investors:
Around March 2012, Fredrick Scott told one of his victims (identified in the complaint as "victim 1") that his
Around December 2011, Fredrick Scott was introduced to a business owner who needed a $5 million loan for business operating capital. Scott told Victim #2 that his hedge fund could secure the loan from a bank in Guyana. In order to secure the loan, Scott would need some collateral up front from Victim #2 for the low low price of $250,000. So Victim #2 gave Scott the $250k. A few days later, Scott came back and told Victim #2 that the bank in Guyana was trippin' but, not to worry, because Scott's hedge fund had recently acquired a bank and could provide Victim #2 with the $5 million loan...for an additional $250k in collateral of course. Victim #2 said they could only come up with an additional $125k, which Scott quickly agreed to take in lieu of the $250k. When the agreed upon date came and went without Victim #2 receiving the loan, Scott told Victim #2 that he needed more collateral. When Victim #2 couldn't come up with any extra money, Scott kept the $375,000 and told Victim #2 that if they said anything bad about this deal to anyone that Scott's team of lawyers would sue for slander.
(ALMOST) VICTIM #3:
Around December 2012, Fredrick Scott was introduced to an investor who had already lost $850,000 investing in a mining company. Scott told Victim #3 that he could get the $850,000 back from the mining company if Victim #3 gave Scott's hedge fund $350,000 which would be used as collateral to fund a $7 million dollar loan to the mining company. Victim #3, perhaps the wisest investor out of this bunch, refused to send Scott any money and instead dropped a dime on him to the FBI.
(ALMOST) VICTIM #4:
In another close call, Fredrick Scott told Victim #4 that a mining company in Chile was looking for a $6
(ALMOST) VICTIM #5:
Fredrick Scott flew from New York to Dallas, Texas to meet with Victim #5 about a loan. Scott promised Victim #5 that he would gladly give her an $11 million dollar loan from his hedge fund on Tuesday for a few hundred thousand dollars today. Sound familiar? (see Wimpy above) Fortunately, the Texan declined to give Scott any money.
Just when we were on a roll of people avoiding the scam, here comes Victim #6. Long story short, Victim #6 gave Fredrick Scott $250,000 in collateral for the promise of a $5 million dollar business loan. The loan never came.
In each of the stories where people wired money to Scott's hedge fund's bank account in the Cayman Islands, a few days later Scott would wire the same amount of money from the Cayman Island account into his personal bank account at TD Bank. Bank records show that Scott then used the money to make personal purchases at Louis Vuitton, the Apple store, Starbucks, True Religion jeans, Tao restaurant, the Hampton Inn SoHo and Dizzy’s Coca Cola Club at Lincoln Center, just to name a few.
And the worst part about Fredrick Scott is that most if not all of his victims are affluent Black people. Per CNBC:
By all appearances, Scott was allegedly running what's known as an "affinity fraud," where people are conned out of their money by someone who appears to be one of their people. Bernie Madoff is the most famous example of this, with many of his victims coming from Florida's elderly Jewish community.
Billy Ray Valentine: I wish my b#@ches would get here. I ain't got time to be sittin' in this cell with you.
Inmate 1: Where are your b*#ches, Mr. Big-Time Pimp?
Inmate 2: Yeah!
Billy Ray Valentine: [turns to Inmate 3] Didn't I tell you that the phone in my limousine is busted, and I can't get in contact with my b#*ches?
Inmate 3: [turns to Inmates 1 & 2] Yeah! The phone in the limo is busted. What is ya, ignorant?
- Eddie Murphy, Trading Places