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Are the oil pension checks and the auto rebates and the

Are the oil pension...

Are the oil pension checks and the auto rebates and the insurance return checks a scam

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I have received information from Lombardi publishing company with reports to buy on how to earn extra money for example some of the information is listed as:

Accountant's Assistant: Is there anything else important you think the Accountant should know?

Auto insurance returns oil pension checks for income and auto rebate checks monthly for extra income. just want to know if these are scams though I understand Lombardi is a publishing company and only provides information on the programs. Not sure they can help me to find out how the programs actually work.

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Answered in 8 hours by:
1/9/2018
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 1,081
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Please give me a few minutes to answer your question.

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The "investments" that you mentioned are not what they are advertised to be. I have looked at each of these, as well as the "tobacco checks" and while they are not fraudulent, they are awfully close to being so.

The "oil pension checks" for example are referring to publicly traded oil and gas master limited partnerships. Yes, they pay dividends quarterly. But that is where the truth ends. The rate of return is usually 4% to 5%. So in order to get the returns that Lombardi advertises, you have to put in over $200,000.

Same with the tobacco settlement money. Back in the 1980s the states got together and sued "big tobacco" and won. The states required the tobacco manufacturers to pay a percent of cigarette sales to the states each year to help pay for the cost of the state healthcare program, the thought being that tobacco created a part of the cost. As the states are always desperate for money, they sell "anticipation bonds" in year one to be paid back with money from year 2 or later. These are tax-free municipal bonds (the ads say "tax free money") but again, the rate of return is usually 3% to 4%, so in order to get the $2,000 or $3500 a month that the ads say, you have to have $500,000 invested!

They also talk about benefits retirees can get from Social Security that are not SSA benefit payments. "SSA Contracts", they call them. Again, they talk about a couple of thousand dollars a month in income. It turns out that they are talking about real estate investment trusts (REITS). These pay out large amounts of income each month. The one that they are pushing owns real estate buildings that they rent to the General Services Administration, which in turn rents to the Social Security Administration. So the ads are not technically lying when they say you are getting money from SSA, but the contract is a rental contract with the REIT, not any contract with you. Payments from SSA are in the form of rent payments, not benefits, and they are to the REIT, not you. Again, these REITS yield about 5%, so in order to get the monthly checks they say you would have to have over $500,000 invested.

Other scams are the auto insurance checks, the auto rebate checks, and health insurance checks. But as with the above, these will give you just enough truth so that you will act. They are not real investments.

The desired action is for you to buy their newsletter for $149 (or whatever it is now). If this was such an easy way to make money, they would not be selling newsletter subscriptions, they would just invest a little and rake in the money.

Unfortunately, there is no such thing as a free lunch. And there are not many honest financial publishers. In addition to Lombardi, watch out for Agora, and Stansbury Research and the Oxford Club. They all do the same thing. Make something look really good, and really easy, then grab your subscription money.

I hope that I have answered your question, and saved you from buying a newsletter that could be used to line my neighbor's birdcage. If you have any more questions, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

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These scams are not new. I remember in the 1980's I worked for the "Big 8" accounting firm of Arthur Young. Back then, a pitchman named Carlton Sheets was pushing a plan to buy real estate with no money down. A bunch of us got together and bought the plan and read it. Most of the "schemes" that he promoted to buy property were either illegal, or no reputable lender would engage in, or there was some major flaw that he failed to reveal. For example, in one section, he told readers to use zero coupon bonds (which are like US savings bonds, sold at a discount) to finance properties. You would buy a discounted bond today, and use it to buy the property. You might pay as little as $35,000 for a $100,000 bond. But, what seller would give you a property worth $100,000 in exchange for a $100,000 bond that he would not be able to spend until it matured in 30 years? Another thing that he failed to mention was that the person holding the bonds (the property seller) had to pay tax on the interest each year. What seller would pay tax on the gain for selling the property, then pay tax again on the money he collected from the sale? Again, not reasonable. But he sold a lot of the "courses" to a lot of people desperate to make a quick buck.

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Did I answer your question? Do you have any more? IF so, please let me know. If not, please do not forget to rate me, as this is how questions are closed.

Thanks!

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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 1,081
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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