Those people regularly fall for far worse.
During the dotcom bubble, there was a guy that moved from the East Coast, New Jersey or similar, to Orange County CA. He had next to no technical ability or background. When he moved, it was on the last thread of his pants, he was broke. The story (in The Industry Standard or Wired or similar at the time) included an example of that poverty: him pulling his own cracked tooth out with some help from a bottle of jack, on his way out to California.
He gets to Orange County, settles in, and has a bright idea. To defraud people by starting a new tech company that is going to be in the media player / streaming space. He proclaims that his company has invented an advanced new codec, among other things. He proceeds to raise something like $16 million from wealthy people in Orange County, using each investor as a referral to the next (dentists, doctors, wealthy older people, and so on). His product, used in demonstrations to said wealthy people, consisted of a skin over top of Microsoft's media player. People started to very gradually get suspicious, so he hired armed guards to stand outside his office, supposedly to protect him from death threats that had been made (actually to prevent people, employees and investors, from getting easy access to him). The rest of his story melts down from there, with him essentially wiping out the ~$16 million he defrauded investors out of. His side of the story of course, was that they were going to build an amazing new media player, and that investors conspired to make him look bad and blah blah.
Those qualified investors fall for all sorts of dumb schemes.