ATTORNEY NEWSLETTER
Ponzi Schemes Increasingly Target Older Investors
One Red Flag: Promises of Guaranteed High Returns
In a Ponzi scheme, fraudsters use money they collect from new investors to pay existing investors. What appears to be a return on your investment is actually money from another investor who has been swindled. Often these schemes target the elderly. The Alameda County financial elder abuse attorneys at Evans Law Firm, Inc. can represent you if you lose money in a Ponzi scheme or as the result of annuity fraud, insider trading, securities misrepresentations or nondisclosures, accounting fraud or any other type of securities fraud or financial elder abuse here in Alameda County or elsewhere in California. If you have, call our lawyers today at (415)441-8669.
Just recently, the Department of Justice (DOJ) announced details of one such scheme against elderly women over a period of 18 years.* According to the DOJ, the defendant solicited victims, almost all of whom were elderly women, to invest in two publicly traded companies, promising an 8 percent return. According to the government, defendant then laundered the victims’ investments through a series of bank accounts, and allegedly used the money to pay personal expenses, purchase luxury items, fund failed business ventures including his wife’s pet store and make the guaranteed ‘interest’ or ‘dividend’ payments to other victims. The government alleged that the defendant’s victims invested more than $13 million and sustained losses of more than $9 million. The defendant was sentenced to more than 14 years in prison. According to the government many of the victims lost substantial amounts of their life savings.
Before investing in any new venture, check for classic warning signs of a Ponzi scheme:
Promises of High Returns with Little or No Risk. Guaranteed high investment returns are the hallmark of a Ponzi scheme. Every investment has risk, and the potential for high returns usually comes with high risk. If it sounds too good to be true, it probably is.
Unlicensed and Unregistered Sellers. Most Ponzi schemes involve individuals or firms that are not licensed or registered. Even if an investment professional comes across as likeable or trustworthy, use the free search tool on Investor.gov to check whether the person is licensed and registered. Also do a broker check at brokercheck.finra org.
Overly Consistent Returns. Investment values tend to fluctuate over time. Be skeptical of an investment that generates steady positive returns regardless of market conditions. That was one of the hallmarks of Bernie’s Madoff’s huge Ponzi scheme.
Contact Us
If you or a loved one has been the victim of a Ponzi scheme or other form of financial elder abuse by an insurance agent, stock broker, investment advisor, promoter or other person here in Alameda County or elsewhere in California contact Ingrid M. Evans and the other California financial elder abuse attorneys at Evans Law Firm at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys also have experience with complex financial contracts and large insurance companies. We can help guide your case through filing a complaint, investigation and discovery through trial or an equitable settlement. We also handle cases involving physical and financial elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
*Evans Law Firm, Inc. was not involved in the case in any way.
