How Does the Dinar Currency Scam Work?


Quick Answer

The dinar currency scam, as of 2015, promises profits for investors who purchase the Iraqi currency at present values and hold them until a point in time at which the dinar would be revalued, notes Investopedia. However, the 20 percent markup and the lies about the Iraqi military make it a swindle, notes CNBC.

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Full Answer

All in all, the dinar currency scam raked in about $24 million as of 2015 for a group of men who sold the currency through the investment firm BH Group. According to the U.S. attorney for the Northern District of Ohio, the people marketing the dinar were trumpeting war stories involving the Iraqi military that turned out to be untrue, according to CNBC.

Some of the fraudulent dealers hawking the dinar promised returns as high as 1,000 times the initial investment. The scammers spun tales about the huge oil reserves beneath the sands of Iraq serving as motivation for revaluing the currency. However, several factors make this revaluation extremely unlikely. The fact that ISIS has the very structure of the country at risk should give investors pause, as should the restrictions on the dinar. They currency is only redeemable in Iraq, and it does not trade on foreign exchange markets. The fact that the dinar brokers may not be legitimate, and that several U.S. states have been broadcasting warnings about dinar scams, means that investors should place their nest egg elsewhere, as stated by Investopedia.

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