A Ponzi scheme is a white-collar crime that involves investment fraud. This is not a crime of violence, but rather one of deceit.
Investors may be convinced by either a person or group to turn over a lump sum of money in the hopes of making a large return on their investment. It’s in such cases that existing investors are paid a dividend from funds collected from new investors.
The reality is that no money is ever being invested in these instances. What’s happening instead is that the vast majority of the funds that are being collected are pocketed by the individual or individuals that originally set up the scheme.
The name Ponzi comes from the last name of a swindler who defrauded investors out of millions of dollars in the 1920s. Ponzi schemes tend to have some common characteristics. One is the promise of high returns with little risk.
An investment may be suspicious if returns are consistently high despite market fluctuations. Investors should be wary of any investment if it is not registered with the SEC or state regulators.
According to federal and state security laws, to be an investment professional one has to be licensed or registered. Thus, if an investor is dealing with an unregistered investment person or company, then the person or entity offering the opportunity is probably doing something illicit.
Ponzi schemes typically have investment strategies that are either secretive or too complex to understand. They typically lack a lot of concrete information. It’s not uncommon for unsuspecting investors in Ponzi schemes to have issues with account statements because the numbers do not seem to add up.
It’s often when investors attempt to cash out that they find themselves being offered promises of even greater returns. It’s not uncommon for investors to have difficulty receiving any payments at all because the supply of new investors has finally dried up.
If you or someone you know has been charged with involvement in a Ponzi scheme or other type of investment fraud, then you’re facing some pretty hefty penalties. A federal crimes attorney here in Tampa can help you determine what defense strategy that you may want to employ in your Florida case in hopes of preserving your freedom.