ATTORNEY NEWSLETTER
Government Charges Defendant Ran Scheme For Nine Years
Victims Primarily Elderly Investors
False Promise Of Guaranteed Income And Other Misrepresentations
Financial elder abuse can strike a particular senior citizen or can be a largescale fraud striking numerous elderly victims such as investment fraud like a Ponzi scheme, where money collected from new investors is used to pay existing investors, and there really is no actual investment of funds. What appears to be a return on your investment is money from another, newer investor who has been swindled. These schemes often target older investors with promises of guaranteed income or 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 (definition of financial elder abuse). 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 Sentence In Ponzi Scheme Case[1]
According to a recent press release from the U.S. Department of Justice (DOJ), a federal judge recently sentenced a former financial advisor to 78 months in prison for engaging in a $2 million Ponzi scheme targeting elderly investors and for subscribing to a false tax return. According to documents filed in this case and statements made in court: from 2008 through 2017, defendant solicited primarily elderly investors to invest their money in a company represented by defendant as a company staffed by experienced real estate professionals that invested in real estate ventures. Defendant allegedly told investors that by investing in the company, senior investors would share in the company’s investment portfolio by lending it money to invest in real estate, and that the investors would receive a guaranteed monthly income. In reality, according to the DOJ the company had no employees, no real estate portfolio, and the monies used to pay investors as a purported return on their investments came solely from funds received from other investors. The DOJ alleged that the defendant used funds sourced from investors to pay his personal and unrelated business expenses, including paying his child’s college tuition and sorority fees. Defendant was also charged with underreporting his income on his federal tax returns. The defendant was sentenced to 78 months in prison and ordered to pay restitution.
Ponzi Schemes “Red Flags”
Here are some of the classic “red flags” of Ponzi schemes like the one involved in the reported case:
- 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/guaranteed 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, or any investment that promises a “guaranteed” return or amount of income.
- 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 San Francisco 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.
