PONZI SCHEMES: INFAMOUS PERPETRATORS - Part 4

PONZI PRODUCER

Lou Pearlman was a name you’d hear quite often during the 1990’s. Not only is he Art Gunfunkel’s cousin, but he is also the former manger of boy band acts ‘N Sync, Backstreet Boys and O-Town. What many didn’t know was that he was also involved in a Ponzi scheme. His Federal Deposit Insurance Corporation (“FDIC”)-insured Trans Continental Savings Program would offer investors a very attractive return to gain their confidence. Much to the investors’ dismay, the scheme Pearlman was perpetrating was neither FDIC approved nor was it part of a savings and loan. This didn’t stop Pearlman from continuing to bilk his investors out of close to $500 million. Pearlman’s plan was to use the funds for three shows for MTV and to build an entertainment complex.

PONZI SCHEMES: INFAMOUS PERPETRATORS - Part 3

HAITIAN HOTBED

The residents of Haiti became victims of Ponzi schemers in 2001 when outfits referred to as “cooperatives” were offering rates up to 15%. The cooperatives gave the impression that they were government backed. They were quick to become rampant amongst inhabitants. Individuals also felt comfortable since the coops were actively promoted through radio and TV advertisements. Even Haitian pop stars were spokespeople! Unfortunately, it is estimated that residents lost more than $240 million in these scams, which is comparable to 50% of Haiti’s Gross Domestic Product.

PONZI SCHEMES: INFAMOUS PERPETRATORS - Part 2

SCIENTOLOGY SNEAK

Reed Slatkin was a co-founder of the internet service provider Earthlink and a Scientology minister. He established himself as a savvy investment advisor for many A-list celebrities and wealthy heads of corporations. Unbeknownst to these individuals was that Slatkin was working out of his garage on a scheme that defrauded these individuals out of roughly $593 million. In order to work his scam, he produced fake statements that referred back to various nonexistent brokerage firms. The Church of Scientology received millions of Slatkin’s winnings; however, in 2000, the SEC caught on to him and discovered that he wasn’t even licensed.

PONZI SCHEMES: INFAMOUS PERPETRATORS - Part 1

A Ponzi scheme, by definition, is a method created to defraud an individual out of their money. Throughout history, many people have been found guilty of perpetrating this heinous act. This article will explore some of the most infamous individuals accused of carrying out Ponzi schemes.

COSTA RICAN RICHES

In the late 1980’s, three Costa Rican brothers swindled American and Canadian retirees out of approximately $400 million dollars through an unregulated loan scheme that lasted around 20 years. Osvaldo, Enrique and Freddy Villalobos promised an interest rate of 3% per month to their clients on a $10,000 minimum investment. The brothers would then move the money through various shell companies before they would return funds to their investors. The scam lasted as long as it did due to the fact that margins were low. Also, the brothers were so disciplined that they narrowly escaped laws.