AVOID IT
No one is completely immune to Ponzi pitfalls, but there are several suggestions you can follow in order to avoid them. If something sounds too good to be true then it probably is. Listen to your instincts and decline to invest in anything that offers an unusually high return. Maintain a healthy level of skepticism by doing your homework before entrusting anyone with your money. Finally, diversifying your investments will help keep you protected from Ponzi traps.
Wednesday, October 27, 2010
Monday, October 18, 2010
PONZI SCHEMES: INFAMOUS PERPETRATORS - Part 7
ROTHSTEIN’S RECENT WRONGS
Scott Rothstein is a recent case of Ponzi scheme perpetration. Rothstein is accused of covertly running a scam out of his law office where he embezzled from investor trust accounts. As a lawyer at Rothstein Rosenfeldt Adler, he forged documents and funded his philanthropy, political contributions and law firm salaries through a $1.2 billion Ponzi scheme. Rothstein’s scam involved him fabricating pre-settlement structures, which were sold in legal cases for large sums of money. Investors offered Rothstein up-front cash payments that would go towards paying individuals owed money from court cases so they may buy the right to collect the full amount of the settlements later. Under this scenario, investors in Rothstein’s scheme would be guaranteed to receive a minimum of 20% investment returns in as short as three months. When the jig was up, Rothstein fled to Casablanca, Morocco, hoping to avoid extradition. Rothstein had a change of heart and returned to Ft. Lauderdale, FL, in a private chartered jet.
Scott Rothstein is a recent case of Ponzi scheme perpetration. Rothstein is accused of covertly running a scam out of his law office where he embezzled from investor trust accounts. As a lawyer at Rothstein Rosenfeldt Adler, he forged documents and funded his philanthropy, political contributions and law firm salaries through a $1.2 billion Ponzi scheme. Rothstein’s scam involved him fabricating pre-settlement structures, which were sold in legal cases for large sums of money. Investors offered Rothstein up-front cash payments that would go towards paying individuals owed money from court cases so they may buy the right to collect the full amount of the settlements later. Under this scenario, investors in Rothstein’s scheme would be guaranteed to receive a minimum of 20% investment returns in as short as three months. When the jig was up, Rothstein fled to Casablanca, Morocco, hoping to avoid extradition. Rothstein had a change of heart and returned to Ft. Lauderdale, FL, in a private chartered jet.
Thursday, October 14, 2010
PONZI SCHEMES: INFAMOUS PERPETRATORS - Part 6
BERNIE’S BAD BUSINESS
Many news organizations covered and continue to cover the schemes of Bernard “Bernie” Madoff, as they are still unfolding. We are currently aware that throughout decades Madoff built the biggest Ponzi scheme in history. He offered investors the chance to steadily earn a higher-than-average return on the securities he traded, year after year. He would forge documents indicating a securities purchase made months earlier than they were actually bought. Truthfully, the investments made by Madoff were legally and mathematically impossible. Madoff’s scam ran during an economic boom, which was people’s normal sense of skepticism is set aside. Investors were simply blinded by “easy money.” He cheated banks, various nonprofit organizations, funds, celebrities and numerous other individuals out of approximately $65 billion.
Many news organizations covered and continue to cover the schemes of Bernard “Bernie” Madoff, as they are still unfolding. We are currently aware that throughout decades Madoff built the biggest Ponzi scheme in history. He offered investors the chance to steadily earn a higher-than-average return on the securities he traded, year after year. He would forge documents indicating a securities purchase made months earlier than they were actually bought. Truthfully, the investments made by Madoff were legally and mathematically impossible. Madoff’s scam ran during an economic boom, which was people’s normal sense of skepticism is set aside. Investors were simply blinded by “easy money.” He cheated banks, various nonprofit organizations, funds, celebrities and numerous other individuals out of approximately $65 billion.
Wednesday, October 6, 2010
PONZI SCHEMES: INFAMOUS PERPETRATORS - Part 5
RETIREE RIPOFF
Michael Eugene Kelly owned a resort in Mexico and scammed $428 million from senior citizens and retirees. Kelly offered his prey the opportunity to make timeshare investments in Cancun hotels, which he referred to as “universal leases.” With the timeshare, investors received rental agreements that promised them a nice fixed rate of return. Many of the people that invested into Kelly’s scam thought the venture appeared to be solid with a low-risk return so they invested their retirement savings. According to the SEC, “more than $136 million of the funds invested (came) from IRA accounts.” While investors were losing their money, Kelly was buying a private jet, four yachts and a racetrack.
Michael Eugene Kelly owned a resort in Mexico and scammed $428 million from senior citizens and retirees. Kelly offered his prey the opportunity to make timeshare investments in Cancun hotels, which he referred to as “universal leases.” With the timeshare, investors received rental agreements that promised them a nice fixed rate of return. Many of the people that invested into Kelly’s scam thought the venture appeared to be solid with a low-risk return so they invested their retirement savings. According to the SEC, “more than $136 million of the funds invested (came) from IRA accounts.” While investors were losing their money, Kelly was buying a private jet, four yachts and a racetrack.
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