It’s easy enough to think of an investment as a rip-off when it plummets in value for legitimate reasons: market forces, the outmaneuvering of a competitor or even the lavish spending of a CEO who flies the company jet to wine and dine girlfriends on every continent, including Antarctica.

OK, so that last one’s a joke. But it’s truly no laughing matter when investors succumb to scams and shams that turn money into a liquid asset of another kind: one that pours down the drain.

“Invest in things that you understand,” says John Huber, a principal with Atlanta-based Financial Discovery Group. “If you have to draw a flow chart to figure out where the cash goes, it may be too complicated.”

Despite Huber’s view from the perch of experience, too many investors take the bait from unscrupulous wolves dressed in chic clothing. This is especially true for baby boomers and older investors who have accumulated sizable retirement accounts, according to the Retirement Industry Trust Association: “Pursuit of seniors’ nest eggs is one of the fastest-growing consumer fraud issues today.”

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