Attorney General and Securities Administrator Warn Public About New Phone Scam

April 21, 2021

Augusta - Attorney General Aaron M. Frey and Securities Administrator Judith Shaw are warning the public of a new phone scam from a caller claiming to be from the Internal Revenue Service.

In this scam, the caller tells the recipient that because he had previously invested in binary options, he is now an accessory to an international drug smuggling ring and having an offshore bank account. The caller said he would need to notify the local District Attorney and the Maine Attorney General and then played what sounded like a police scanner, claiming to be having communication with the law enforcement officials via two-way radio. The caller said they could settle the matter by either having "agents" go to the individual's house to arrest him, or he could pay a $1,000.00 bond.

"If you receive a call like this, dont be fooled," said Frey. "No government agency will call you to demand you settle alleged criminal violations by either agreeing to arrest or paying a sum of money."

Administrator Shaw noted, "while this call was clearly meant to scare and intimidate the recipient with exaggerated claims of criminal conduct associated with an investment, investors should use caution when investing in binary options."

A binary option is a type of all-or-nothing investment contract where the investor predicts the value of an underlying asset (currency, stock, etc.) at a predetermined time or date in the future. If the investor correctly predicts the asset price at the end of the contract, which can be just a matter of minutes, the investor receives the payout agreed upon in the contract. If the investor is incorrect, the investor loses the entire amount invested. Binary options are often promoted to investors by unlicensed overseas companies through unsolicited calls or emails. The investment offers often contain promises of receiving matching bonus money after you invest. Once the investor sends their money, the company stops responding and eventually disappears.

Consumers can contact the Maine Attorney Generals Office with questions or concerns about these kinds of scams or other issues they have had with a business. They are encouraged to contact the Office of the Attorney Generals Consumer Protection Division at: State House Station 6, Augusta, ME 04333-0006 or by email at, or telephone at 1-800-436-2131.

Administrator Shaw urged anyone who has questions about the authenticity or legality of an investment opportunity, or about the individual making the offer, to contact the Office of Securities. Information about advisers, salespersons and investing is available at, by calling 1-877-624-8551 or writing to the Maine Office of Securities, 121 SHS, Augusta, Maine 04333-0121.


The Office of Securities is an agency within Maines Department of Professional and Financial Regulation ( )