Con artists are likely to use the prospect of a prolonged conflict in the Persian Gulf to dupe Maine investors, according to Stephen L. Diamond, administrator of the state Securities Division.

“Today, the swindler’s best friend is a headline or television news flash out of the Mideast that threatens disruption of oil supplies to the United States,” said Diamond. “Unfortunately, small investors often give undue credence to the feverish pitches of `boiler room’ salespeople pushing illicit investments in oil and gas wells and precious metals.”

Previous periods of turmoil in the Middle East were quickly seized upon by con artists. Diamond said phony oil and gas partnerships have been a staple of investment fraud since the first Arab oil embargo more than 15 years ago.

Investors are told that, by spending $5,000 or more for units of the bogus partnerships, they will reap profits from rising oil prices.

“An extended period of elevated oil prices may eventually spur increased activity in the legitimate oil industry,” he said. “But the trick for small investors will be to separate the wheat from the chaff. … Promises of overnight or even short-term profits are almost certainly false.”

Diamond stressed that his warnings were not meant to discourage investments in legitimate energy exploration and drilling operations.

In recent years, precious metals have become a major focus of investment fraud, according to Diamond. Maine residents have been pressured to invest in bullion or coins.

In other schemes, often called “bank-financed” or “collateralized-loan” deals, investors put up 20 percent or more of a certain quantity of gold, silver or platinum and telephone salespeople supposedly make arrangements for a bank to finance the rest. The metal allegedly is stored as collateral by the bank.

“Precious few of these deals present any real opportunity for investors to earn a return,” said Diamond. “World gold prices would have to soar in order to offset the sky-high commissions, interest charges and loan origination and storage fees that are involved. Of course, no profit whatsoever can be expected when such deals are total swindles from start to finish ….”

Under state securities laws, investments and sellers usually must be licensed with the Securities Division. Diamond urged Maine investors to call his office at 582-8760 to find out:

Whether the investment being offered is registered to be sold in Maine;

Whether the promoter is licensed to sell investments in the state; and

Whether the promoter has a history of disciplinary actions involving investment fraud or abuse.

“As a general rule, it is not advisable to give your money to a stranger who contacts you by phone and pressures you to act immediately to turn over your savings,” Diamond said.