Atlanta man gets 12 years in prison for defrauding NBA star Dwight Howard out of $7 million. But it's not just the rich and famous falling for these investment scams — how to protect yourself

Surround yourself with advisors you trust

Warren Buffett has offered some sage advice from his long career.

“We look for three things when we hire people. We look for intelligence. We look for initiative, or energy. And we look for integrity,” he says “And if they don't have the latter, the first two will kill you.”

Integrity is critical, as placing your trust in the wrong person can be financially fatal. Taking the case of Charles Briscoe: the agent was not only trying to outsmart Howard, but also duped other NBA players into buying more than $5 million in overpriced life insurance policies.

When you choose a new financial advisor, a new business partner or even a service provider like a mortgage or insurance broker, be sure to do your homework on them. Check for any required certifications, and membership in professional and regulatory organizations. Ask for references, and also look for testimonials from people in your own network whom you trust.

Most of all, if the terms of an offer sound too good to be true, they probably are. Trust your gut, and be willing to pass on any opportunity that gives you a bad feeling.

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Beware of impostor scams

In the case of Darden Jr., he pretended to be a legitimate businessperson, with many important contacts, in order to convince Howard to invest in his scheme. But, as the Federal Deposit Insurance Corporation (FDIC) notes, impostors can also pretend to be someone you know and trust in order to convince you to give them money. Or, imposters may claim that they are members of a bank or government agency in order to gain your trust.

These scams are becoming more sophisticated thanks to the use of AI. The telltale signs of scams can include bad spelling and punctuation, low-quality or low-fidelity images and logos, and suspicious email addresses — although those are now largely absent from the emails, social media posts and text messages of scammers.

There are also sophisticated scams involving AI-generated voice recordings and video. If you encounter someone claiming to be someone you know, or to be a business contact of a person you know, be sure to ask questions that could not be answered by a third party, or to check in with your supposed mutual contact for a reference.

Mortgage and foreclosure scams

The FDIC warns of another common type of business scam involving fake mortgage lenders, loan servicers, financial advisors or representatives of government agencies who claim they can help with your mortgage.

Whether you’re in the process of buying a new home, acquiring new real estate for investment purposes or at risk of losing your principal property due to foreclosure, these criminals prey on people who lack legal knowledge and the typical business practices of lenders and financial professionals.

If you’re contacted by a company or individual claiming that they can offer you a much lower mortgage rate than average, or can save you from foreclosure, don’t offer up any personal information or money until you can be sure they’re legitimate.