ATTORNEY NEWSLETTER
Allegedly Stole $9.3 Million In Ponzi Scheme
Many Seniors Among Victims
Many Lost Life Savings
Dishonest investment promoters and financial advisors often pitch fraudulent investment schemes to older investors in particular with supposed “opportunities” promising high returns. In presenting their investment “opportunities,” such greedy advisors may seize on senior anxiety about future income needs, escalating inflation, and rising health care costs. The offered “opportunity” may be a risky, unregistered investment with little chance of living up to its hype or a complete 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 at all. Unregistered investments sold to unqualified investors or fraudulent Ponzi schemes violate securities laws (see, e.g, Rule 10b-5 of the Securities Exchange Act, 17 C.F.R. 240.10b-5), and, when the victims are seniors, constitute financial elder abuse and may involve other crimes. See Penal Code § 368 (crime of financial elder abuse) and Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse). Evans Law Firm, Inc. can represent you if you lose money as a result of financial elder abuse in San Francisco or elsewhere in the San Francisco Bay Area or throughout California. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Alleged Ponzi Scheme[1] Targeting Older Investors
In a recently reported case, a broker was sentenced to nearly 22 years in prison, or 262 months, following his conviction at trial of stealing more than $9.3 million from clients in a Ponzi scheme. “[Defendant] misled, cheated and conned over fifty victims, many of them elderly, into trusting him with their life savings and hard-earned retirement funds, all for guaranteed rates of return and low-risk investments that were fabricated,” according to the U.S. Attorney prosecuting the case. According to court documents and evidence presented at trial, from January 2013 through July 2018, defendant devised a scheme that stole $9,366,976.37 from at least fifty-four investors, many of whom were elderly. As part of the scheme, defendant allegedly sold investments to clients that he misrepresented as annuities and senior secured notes with no risk of loss and with a guaranteed rate of return. To keep up with promised rates of return, the government contended that defendant falsely represented that payments to previous investors were rates of return and interest when, in actuality, these payments were new investor funds, the defining characteristic of a Ponzi scheme. To avoid detection, the government says defendant set up office fronts in Delaware and Nevada, contracted with call centers and created false websites and account statements that purported to show investor account balances.
Warning Signs Of Fraudulent Investment Schemes
Here are some of the classic “red flags” of fraudulent investment schemes include:
- High or overly consistent returns with little or no risk. Be especially suspicious of any “guaranteed” investment opportunity like the promise allegedly made in the reported case. 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.
- 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 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.
