RIP-OFF ALERT: An Idaho man named Darren Palmer is under investigation for running an alleged $100 million Ponzi scheme. He's no Bernie Madoff -- recall that man's recent $50 billion scheme -- but Palmer still took in some real money.

Palmer was promising a 25%-40% return on people's money every year. It is impossible for anybody to ever deliver this kind of money in a legitimate non-criminal activity.

Quarterly dividends were being paid to early investors with money taken in from later investors. Suddenly, the dividends stopped coming. That's what happens in a Ponzi scheme because you mathematically run out of people to fund it.

This is just another in a long line of cases where people trusted an associate, a friend or a friend of a friend and suspended normal disbelief when told about the returns they could earn.

As one duped investor said of Palmer, "He just seemed so legit. He grew up in the area."

Being born in the same zip code, or going to the same house of worship or country club does not make you legit. This is known as affinity fraud.

With affinity fraud, we let our guard down with someone who is like us. However, we wouldn't trust a stranger with the same claim.

So be careful out there, and remember, just because somebody is familiar to you, it does not mean what they're offering is good.