ATTORNEY NEWSLETTER
SEC Charges Couple With Running Ponzi Scheme
200 Victims Include Many Elderly Retirees
Emergency Action Appointing Receiver To Preserve Assets
Financial elder abuse can be abuse of a particular senior citizen or can be a largescale fraud such as a Ponzi scheme, where fraudsters use money collected 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. These schemes often target older investors with promises of guaranteed returns in excess of current bank and market rates of return. Such schemes violate securities laws and, when the victims are seniors, also constitute financial elder abuse. See Penal Code § 368 and Cal. Welf. & Inst. Code § 15610.30. Evans Law Firm, Inc. can represent you if you lose money in a Ponzi scheme or any other type of securities fraud or financial elder abuse here in San Francisco or elsewhere in California. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent SEC Accusations Of Ponzi Scheme[1]
According to a recent complaint filed in federal court by the United States Securities and Exchange Commission (“SEC”) two defendants, a husband and wife team, have been charged with running a Ponzi scheme that raised approximately $17.6 million from as many as 200 investors, many of whom were elderly retirees. According to the complaint, the couple urged their victims to invest in two funds which defendants claimed would trade foreign currencies. The government alleges that defendants sent investors periodic account statements showing that their accounts were increasing in value. In reality, however, according to the complaint, the funds stopped trading in foreign currencies six years ago, and the defendants simply used new investor money to pay purported “returns” to existing investors. Also according to the complaint, the two promoters misappropriated investors’ money to support other businesses they owned, including a horse racing stable, limousine service, and health and fitness studio. According to the SEC complaint, the couple’s personal earnings on their racing stable alone garnered them a profit of $2.1 million.
Ponzi Schemes “Red Flags”
The SEC offers this list of the classic “red flags” of Ponzi schemes:
- High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.
- Overly consistent returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.
- Unregistered investments. Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company’s management, products, services, and finances.
- Unlicensed sellers. Federal and state securities laws require investment professionals and firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.
- Secretive, complex strategies. Avoid investments if you don’t understand them or can’t get complete information about them.
- Issues with paperwork. Account statement errors may be a sign that funds are not being invested as promised.
- Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.
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 in Los Angeles, Orange County or elsewhere in California contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).
[1] Evans Law Firm, Inc. was not involved in the case in any way.
