Joe Palermo, President of Fraud Prevention Solutions, LLC, understands the good and bad of business.
Beginning his career in the financial offices of organizations as considerable as Viacom, United Cable, and the Hearst Corporation, he went on to successfully launch or acquire several other companies. Cofounding Golden State Networks, as CEO/CFO he grew the startup business-technology concern to positive income and cash flow in less than one year.
So why didn’t Joe know a bad investment opportunity when it presented itself?
In June of 2006, one of Joe’s friends told him about a California company generating for its investors three percent interest per month—36 percent annually. Utilizing three different online services, Joe performed background checks on the company and its president. Based on what he considered appropriate due diligence, everything appeared to be legitimate.
Joe moved forward and invested a reasonable amount of funds.
The following month, Joe was reading a book by Barry Minkow, a recognized expert on fraud (who, before going straight, bilked investors out of millions of dollars). "One chapter contained numerous similarities between cases Barry had uncovered and the company I’d just invested in." He contacted Minkow, who investigated and agreed that Joe’s concerns were well-founded. Working in concert with the FBI and the California Department of Corporations, Joe introduced Minkow and one of the CDC’s lawyers (using assumed names) to the company as interested investors.
Minkow admires Joe’s handling of the case: "He had to make a decision in November of '06 when we asked him to release the report publically to prevent others from investing. But it would be clear that he was the whistleblower, and he wouldn’t get his money back." He cautioned Joe that, once the report came out, there was a good chance his funds might be frozen as part of the investigation. "He said to release the report—against his own interest. I’ve never had a client do that. And we got his money back, too."
Based on his experience—and a subsequent opportunity where he did ask all the right questions—Joe took action. "There is no online search that can provide the level of due diligence required to protect potential investors from making a major mistake." Until now, with the launch of Fraud Prevention Solutions, LLC.
Barry Minkow champions Joe's efforts, calling it "an awesome product that nobody thinks they need. But it's like medicine—and there are a lot of sick people out there that are being duped every day. These are tough times." He considers Joe as "the John Walsh of fraud: he was a victim, and now he's coming out to make sure nobody else gets victimized."
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