In the Age of the Internet, Ponzi Schemes are Alive and Well
The term “Ponzi Scheme” derives from the notorious Charles Ponzi. Ponzi stole millions of dollars from Boston investors in 1920. Ponzi schemers and financial fraudsters use money obtained under false pretenses. Victims who invest early, or in the beginning, are paid interest, dividends, and return-of-principal from investment money received from later investors. Neither of these investors have reason to suspect there is not a legitimate enterprise generating revenues to make these payments.
Ponzi Schemes Collapse by Design, and sooner or later, Investors Lose Billions
However, a Ponzi scheme will only last if there are new investors to invest funds. Typically, the new investors do so under the impression they can anticipate unusually high returns. Eventually, the house of cards will collapse, leaving later investors holding an empty bag and the con-artist in jail.
We know how to help!
A former police officer was solicited for a commodities investment program that turned out to be a Ponzi Scheme. Attorney Rosenfield obtained a significant recovery of the money the police officer lost from the Ponzi Scheme. The key in this case was to demonstrate that the clearing firms did not properly insure the firms met the ‘Know Your Customer’ rules.