The Ponzi Scheme – Know What To Look For

Today, the Providence Journal reported yet another fund manager who has been sanctioned by a securities enforcement body.  We see them all the time in the press and the story is generally the same.  Some hedge fund manger is out there laying the con on unsuspecting investors with promises of high returns, early retirement and highly liquid assets.  We usually hear of them after the damage is done leaving little to no money to compensate the investor victim.

Worse, not all Ponzi Schemes are cloaked with the guise of an investment firm, nor have the notoriety of Bernie Madoff.  They can take different forms.  For example, see the matter of the Eagle Warranty Corporation.  In that case, the managers/ owners of a used car warranty company sold warranties covering used cars but refused to pay claims they authorized or were contractually bound to pay.  The Pennsylvania Attorney General’s Civil and Criminal divisions are pursuing the matter. And of course, it’s most likely too late for the victims. They probably won’t be made whole.

The reality is, there are bad people out there who are just dying to take (steal) your money. So, how can you protect yourself?  Or worse, how can you get your money back if you’ve already invested or made a purchase?  There are some things you can do and while these aren’t fool proof nor offer any guarantee for success, you might be better off thinking these over if someone who wants your money is courting you.

Ask yourself these questions, do you feel pressured by heavy-handed sales tactics?  Are you being shown amazingly good performance statistics (including few to no negative returns)?  Are you being rushed into handing over your money through an “act now before it’s too late” message?  Well, if the answer is yes, then it would be advisable to keep your checkbook in your pocket and walk away. There are hundreds, if not thousands of honest and reputable places that will guard your money, not steal it.

However, if you’ve already made the investment and you feel suspicious, call the company and ask for a withdrawal.  If that request is met with a heavy sales pitch as to why you shouldn’t then be aware. Other reasons could be driving force behind the manager’s conservation pitch. Seek advise from an attorney, call a securities regulator or do both. Time might be of the essence so act quickly.

Remember, you are in control.  You have what the con wants – your money. Be stingy. Be cynical. The con certainly won’t.


About RI Criminal Defense Lawyer

My name is James E. Smith. I am a criminal defense lawyer in Rhode Island. If you have been arrested, or if you have been contacted by the police, call immediately for competent, skilled advise. 24/7 401-649-0335
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