Many investment advisors and estate planning services generate business by inviting prospective customers to a free lunch or dinner, coupled with a presentation on the company's services.  Anyone who is retired or approaching retirement age can expect to receive such lunch and dinner invitations.  Most invitations are sent by legitimate businesses that offer legitimate products and services.

However, the Securities and Exchange Commission recently obtained an emergency restraining order against an Illinois corporation named USA Retirement Management Services.  The SEC alleges that the owners of this company used the "free dinner" route to operate a Ponzi Scheme that raised at least $20 million from more than 120 investors in Illinois and California.  The company invited potential investors to a free estate planning seminar and dinner.  The seminar offered general estate planning advice.  Those who attended the seminar subsequently received a letter inviting them to the company's offices for a "personal consultation"  where they would be offered advice on setting up a Living Trust or Will."

According to the SEC, once investors arrived at the "personal consultation" and shared their personal financial information with the company, investors were offered what were represented as "safe, guaranteed investments in 'Turkish Eurobonds' through the purchase of USARMS promissory notes that would earn annual returns of between 8 and 11 percent." The SEC alleges that the owners of USA Retirement Management Services misused investor funds to purchase luxury automobiles, homes and vacations.

The Better Business Bureau is unaware of any investment advisor or estate planning service in this area that is using lunch or dinner invitations to lure investors into a Ponzi Scheme.  Most businesses offering free lunch and dinner seminars are legitimate businesses that offer legitimate financial and estate planning advice.

Anyone attending one of these seminars should exercise caution and be alert to "red flags" that may warrant even greater caution:

• Requires a large up-front investment. Untrustworthy schemers might try to convince investors to pay a lot of money upfront so they can get out of town with a large haul, rather than wait for the funds to trickle in. 
• Promises high returns for low risk. Every investment comes with a level of risk. Typically the amount of risk increases in line with the potential return on the investment. If the seminar is trying to sell an investment scheme that claims a high return with little or no risk, beware, even if it comes with the promise of a money-back guarantee.
• Employs high pressure sales tactics. Seminar leaders often use high pressure sales tactics to get people to sign up without thinking it through. They might claim that there are only a few spots left or that you need to get in on the ground floor today to see the largest earnings. Any reputable investment company will let you take your time and do your research and will not pressure you into signing a check.
• Relies on off-shore investments. Many hucksters try to give their scheme an air of sophistication by relying on overseas investments such as foreign currency, property, stocks and bonds. They also might claim—incorrectly—that you can avoid taxes by investing overseas.
• Sounds too good to be true.  At the end of the day, if the offer sounds too good to be true, it probably is. Always listen to your instincts because the potential payoff is rarely worth the risk.