My brother-in-law has been “taken” a few times. Proving the adage, “you can’t cheat an honest man”. He’s also lost money on normal things because he’s lazy, or his antics have given him bad credit, and so forth, but he lost money on these items because he wanted to act illegally:

He got a tip on the golf course to buy into this guy’s company. I think that’s illegal insider trading. Anyway, he bought at 7. The stock did really well. I told him to sell, at least his original investment, at 14. He thought the owner would tell him when to sell, but I think the owner was just bragging when he originally recommended to buy, and never gave my BIL another thought. My BIL eventually sold it all at 2 when the stock collapsed. I bet the CEO still has a yacht, or whatever, all legally paid for.

My BIL got a tip from a neighbor to buy into a Chinese company that was restricted to experienced investors. I don’t understand it, but by BIL was prohibited from buying. So, he gave his thousands to his friend to invest in the stock for him, which is illegal. The company went bankrupt, and he lost everything. What’s even worse, is that because the investment wasn’t in his name, he couldn’t write-off the losses against the gains he was getting elsewhere.

The worst was when he wanted to hide a $100,000 inheritance from his sister, and from the tax man. He must be lying to me because there is no tax involved at that level. Anyway, he “invested” in collectible coins. Three of them. He kept them for 20 years and then sold them for $30,000. That’s worse than the Madoff people did. He could write-off the $70,000 loss against future gains, but because he wanted to hide the whole thing from the tax man, and from his sister, he didn’t save the original receipt and it’s all a $70,000 loss on his principal, plus whatever he might have honestly earned over 20 years. The tax loss alone is $10,500, I believe.

There’s more, of course, but that’s enough.