Category Archives: Fraud and Financial Crimes

November’s Ponzi Scheme Roundup via Kathy Bazoian Phelps

DEFINITION of ‘Ponzi Scheme‘ A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. (Investopedia)

Ponzi Schemes have been around for well over a hundred years.  In 1855 Charles Dickens’ story Little Dorrit described an insurance scam today’s newspapers would have labelled a Ponzi scheme.  In 1899 William Franklin Miller’s Franklin Syndicate promised investors a 520% annual return, raising millions with his pre-Ponzi Ponzi scheme. Twenty years later, Carlos Ponzi beguiled investors with the postage-stamp-based investment scheme that put Ponzi into the dictionary.

If you think Ponzi Schemes are unusual, think again. Ponzis come in all sizes, from the local scammer who deprives a few dozen investors of thousands with his trickery, to Bernard Madoff who operated the largest Ponzi scheme in history for several decades before confessing.

Kathy Bazoian Phelps Diamond McCarthy LLP

Kathy Bazoian Phelps is an modern-day expert in Ponzi schemes who has extensive investigation and money-tracing experience in Ponzi schemes. Kathy publisher a monthly “Ponzi Scheme Roundup” blog reporting on Ponzi schemes in the news. As always, November’s Ponzi Scheme Roundup is worth reading:

November 2014 Ponzi Scheme Roundup from Kathy Bazoian Phelps

Posted by Kathy Bazoian Phelps Below is a summary of the activity reported for November 2014.Carlos Ponzi – arrest photo taken in 1910, ten years before his Ponzi scheme collapsed.
The reported stories reflect: 9 guilty pleas or convictions in pending cases; over 80 years of newly imposed sentences for people involved in Ponzi schemes; at least 5 newly discovered schemes involving more $100 million in the aggregate; and an average age of approximately 56 for the alleged Ponzi schemers.

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