Recent case shows Ponzi schemes can victimize anyone


Man who ran Ponzi scheme defrauding athletes and others pleads guilty

A man who was running a Ponzi scheme that defrauded multitudes of investors including professional athletes pled guilty in Colorado. The 50-year-old could go to jail for as many as eight years. He must also pay $18 million back to those he defrauded. According to prosecutors, the man and his partner committed a variety of illegal financial acts including theft and fraud. Several players in the National Football League were victimized including longtime NFL quarterback Carson Palmer. The case involved the man making loans to the athletes through a limited liability company. The loans were made at high interest. He accrued at least $46 million from 77 people. He had asserted that his company had a valuation of $15 million and was on the verge of breaking out and growing. However, these statements were untrue and other investments he solicited cash for were also fraudulent.

Recognizing Ponzi schemes involves knowing the signs

The NFL offers advice to its players in avoiding being victimized and losing their money. Still, since many are new to wealth and are unsure of where to put their money to get a good return, they can be vulnerable to slick sales pitches from people who do not have their interests in mind.

Recognizing the telltale signs of Ponzi schemes can be effective in avoiding the worst-case scenario and having their bank accounts drained by unscrupulous “experts”. Ponzi schemes take money from new investors to pay previous investors and there may not even be a legitimate product underneath the investment. Examples of a Ponzi scheme include promises of a significant return on the investment with limited or no risk; returns that are too consistent to be real; unregistered investments; unlicensed or unregistered sellers of the products; strategies that are difficult to understand or are not disclosed; problems receiving paperwork related to the investment; and problems getting paid.

Knowing how to hold scammers accountable may require assistance

Victims who find that they have been taken in by a Ponzi scheme or any other type of financial fraud might be embarrassed and unsure of what they can do about it. Just as the Securities and Exchange Commission watches out for fraudsters and the legal system deals with them appropriately, people can take steps to recover what they have lost in the scam. The entire case must be scrutinized and the money trail assessed. To hold those who committed these egregious acts accountable and move forward in recovering what was stolen, having the assistance of an experienced professional is essential. A consultation with an attorney with experience in rooting out Ponzi schemes and history of results in obtaining recovery for victims is the first step.