Investigators are trying to figure out whether the financial fraud allegedly perpetrated by Bernard L. Madoff was, in fact, the largest Ponzi scheme in history. The alleged scam, which cost investors $50 billion, sounds like a classic Ponzi racket. But what is a Ponzi scheme? And why does it bear this name? First, you need to know a little bit about its namesake, Charles Ponzi (pictured).Anyone ca
Gene A. O’Neal, 36, Atlanta, Georgia, pled guilty before United States District Judge Beverly B. Martin to two counts of mail and wire fraud related to a scheme to defraud investors in Pinnacle Development Partners, LLC (”Pinnacle”), a real estate investment fund formerly run by O’Neal. In particular, O’Neal admitted to using the funds invested by later Pinnacle investors to pay a 25 percent rate of return within 60 days …Read More...
East Coast Capital, LLC, Buffalo, New York, and others were sued by Attorney General Andrew M. Cuomo in the area’s first major house flipping lawsuit against an investment company that used a Ponzi scheme that increased urban blight in Buffalo neighborhoods. Also named in the lawsuit as defendants are consulting firm IMA Equities and the owners of JD Realty & Management, Inc., siblings Joshua and Jessica Doucette, a 20-year old college …Read More...
In the following press release New York Attorney General Andrew M. Cuomo announced the area’s first major house flipping lawsuit against an investment company that used a Ponzi scheme that increased urban blight in Buffalo neighborhoods. The Attorney General’s suit accuses East Coast Capital (ECC), LLC and others of defrauding unknowing investors through an elaborate Ponzi scheme involving over 50 properties throughout Buffalo. In the scheme, high returns are paid to investors with money paid from other investors instead of actual profits from the real estate venture. ECC duped investors by promising high returns if they invested in distressed real estate by providing mortgages that – also unknown to the investors – grossly exceeded the market value. In a Ponzi scheme, an infinite number of investors are needed to provide the high returns to the other investors. Therefore, Ponzi schemes inevitably “implode,” leaving many investors with significant lo
The Security and Exchange Commission defines Ponzi scheme as a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi was flooded with funds from investors, taking in $1 million during one three-hour period. Sadly, most of the people in this scheme were never paid because there were not enough new investors to continue to pay into the Pyramid.The Ponzi scheme works on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses. Nevertheless, a few decades after Charles Ponzi duped people to buy into his Pyramid, Franklin D. Roosevelt, with the foresight of Nostradamus, decided that this was the right program to help out Grandma. “Great,” he said, “I’ll use this illegal scheme to create Social Security for the elderly. In fact, instead of people voluntarily paying into the sche
Check out this article by mainstream financial publication The Economist. Even the “normal” news and opinion folks are starting to see what we have been saying for a couple of years - our system is built on a mirage of credit and debt. The obligations are too large to be paid for out of real funds. The scheme cannot last forever. Check it:
http://www.economist.com/finance/displaystory.cfm?story_id=8864415
Gary Lee, 52, is charged with Conspiracy to Commit Mail Fraud, Conspiracy to Commit Money Laundering, Use of Unauthorized Access Devices, and Criminal Forfeiture for inducing people to invest in bogus real estate projects in Las Vegas, Nevada using fraudulent deeds of trust and promises of high returns on their investments. A warrant was issued for Lee’s arrest. According to the court records, it is alleged that from about 1999 to …Read More...
John L. Perry’s column on Newsmax.com is way out there. But his comparison ‘twixt the Motown bailout and Charles Ponzi’s infamous con game (whereby the first in bilk the last out) isn’t entirely forced hot air (i.e. all heat and no light). “Under a Ponzi scheme, the sheep get fleeced because they want to play [...]
