Another investment adviser is accused of scamming the public out of millions of dollars. This time, the SEC has charged an Ohio-based money manager with fraud for allegedly lying about his investment strategy, creating fake account statements to hide losses, and using client funds to purchase property and bankroll his business.

According to the SEC, Enrique F. Villalba, Jr., of Cuyahoga Falls, Ohio duped investors in California, Illinois, Ohio, Tennessee and Washington through his company, called Money Market Alternative LP.

The SEC says Villalba falsely told investors that his investment strategy was conservative and relatively risk-free -- yet able to safeguard clients' money and generate 8% to 12% annual returns. Instead of investing in securities, however, Villalba allegedly poured most of his clients' money into commodity futures contracts, and wound up losing millions of dollars.

All told, the SEC says, Villalba raised more than $39 million in client funds over 13 years.
It's so unfortunate to hear of yet another one of these alleged swindles. But they happen time and time again.

One of the best ways to avoid being victimized by financial con men (or con women) is to be careful in choosing with whom you do business -- regardless of whether you have hundreds, thousands or even millions of dollars at stake.

Here are a few tips on how to choose a financial adviser, from Karen Altfest, a Principal Advisor and Executive Vice President of Client Relations for Altfest Personal Wealth Management.

1. Question everyone before handing over your money.
Even if it's a friend, relative or someone at a major financial institution, you have a right to ask as many questions as you need to, and to get straight answers.

Red Flag: If someone tells you not to worry about where the money is going, that they will take care of it, leave quickly.

2. Questions where your money will be held.
Regardless of who is making the investment decisions, an independent financial institution will have custody of your money. Make sure you know which company it is and how to contact them. This entity (sometimes a "custodian firm") must give you statements at least quarterly, though many companies issue monthly statements.

Red Flag: If someone doesn't provide timely investment statements or just gives you verbal summaries of how your investments are doing, that's a bad sign.

3. Make sure the firm has been in business for a suitable length of time.
Be sure that an adviser has offices you can visit and where they are known. Don't settle for meeting in some other firm's conference room without a thorough explanation of why that is happening.

Red Flag: It's a clear warning sign if you can't locate the firm's office in the building directory, or if the firm's staff seems unfamiliar with the person with whom you are meeting.

4. If something sounds too good to be true -- it probably is.

Don't fall for someone who promises you the moon. Also, observe a person's body language and use your gut instincts.

Red Flag: Omissions, answers that don't make sense and grandiose claims are warning signals.

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Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has also been featured in top newspapers including the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money. Check out her New York Times bestseller, 'Zero Debt: The Ultimate Guide to Financial Freedom.'