Ponzi Schemes

Named after a famous con artist of the early 20th century, a Ponzi scheme is one of the oldest tricks in the book for those looking to scam their way into the high life. In the wake of the recent financial shakeups that have affected economies around the globe, several high-profile cases of this type of activity have come to the surface. The most famous of these to date involves fallen Wall Street investor Bernard Madoff, who swindled wealthy investors out of millions.

While the specific variations on a Ponzi scheme are endless, the basics of how they work remain essentially the same. The person behind the scheme begins by luring a few eager investors with promises of huge returns, which he or she indeed ends up delivering on for a while - with the catch of using the money not from any actual investment, but taken directly from subsequent participants in the venture. As more and more investors join in, the “pyramid” structure grows larger, and its base weaker.

Those who manage to pull off major schemes are often master manipulators, capable of not only convincing people of the deal, but also of putting up a successful front. Often, this involves renting office space and even hiring a “staff” to increase the appearance of legitimacy.

However, as is bound to happen with its metaphorical equivalent “house of cards,” Ponzi schemes inevitably collapse. The difficulty in holding up the façade as more and more people become necessary to make things work eventually gets beyond the schemer’s control. For the crook, the question becomes whether they can get out in time, which often entails hightailing it out of the country.

Contact Us

If you’ve been the victim of a Ponzi scheme or similar time of financial fraud and are currently facing major financial issues, contact the Boca Raton bankruptcy lawyers at the law offices of Eric N. Klein & Associates, P.A., at 561-353-2800 today for more information on your options.