Tampa Federal Criminal Defense Lawyer

All About Ponzi Schemes

Dec 29, 2020 | Criminal Defense

A Ponzi scheme is a business crime that can happen anywhere, including in Tampa, Florida. It is a scam in which money is taken from the newest investors in a company, giving it back to the oldest investors in a company. This is a fraudulent form of activity that will quickly go under once the people involved understand what is truly occurring. There is a large amount of risk involved, despite the false promises, in which in many cases, no money is made.

How Did Ponzi Schemes Begin?

Ponzi schemes have existed since the mid-1800s, though they were officially named after the schemes of Charles Ponzi in the early 1900s. Ponzi used the postal service’s arbitrage exchange to make even larger profits. He guaranteed that would investors would receive at least 50% more profit if they invested in his Securities Exchange Company, redistributing the money that people invested instead of putting it to use.

How to Avoid Ponzi Schemes

It is quite possible to avoid a Ponzi scheme if you know what to look out for. These illegal business ventures still exist to this day, with someone arrested as recently as 2008 for a Ponzi Scheme. You can see red flags below:

  • No risk guarantees
  • High profit guarantees
  • Secretive investment strategies
  • No paperwork transparency
  • Difficulty with withdrawing money

What to Do

There could be a chance that you have invested in a Ponzi scheme or you are operating a Ponzi scheme without knowing it. If this is the case, contact a lawyer before it is too late. You do not want to harm others’ income and need to be safe in your future business ventures. A Ponzi scheme, in the end, is not a good idea for anyone.


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