A Ponzi Scheme is a type of investment fraud that pays purported “returns” to current investors from proceeds received from new investors, rather than through genuine investments. Once the fraudster stops receiving new money or investors request too much of their money back, the Ponzi Scheme falls apart. The term for Ponzi Scheme is from a famous 1920s con man, Charles Ponzi who redistributed investor funds for international reply coupons to himself and other investors. More recently, thousands of investors, many of whom were elderly lost their money in a billion-dollar Ponzi Scheme perpetrated by the Robert Shapiro Woodbridge Group. Not all Ponzi Schemes are as large and notorious as that committed by Bernie Madoff. Many more Ponzi Schemes happen on a much smaller basis and go undetected.
Malecki Law has handled numerous Ponzi cases: McGinn Smith, Robert Van Zandt, Hector May, Illume, and Steven Pagartanis, just to name a few. We are available to review your situation at no cost. Catching these things early inures to your benefit. Investors can fight to recoup their losses from a Ponzi Scheme committed under a FINRA registered firm through arbitration.
Our securities fraud law team aims to equip investors with the knowledge to spot not only Ponzi Schemes but other fraudulent investment opportunities as well. Everyone should be aware of the following signs that could indicate a Ponzi Scheme.