Since 2008, Floridians have lost as much as $5 billion in Ponzi schemes, coming in second only to New York in the total number lost to the schemes, according to a Forbes analysis. During the period studied, between 2008 and 2013, 54 Ponzi schemes were identified in Florida.

What Is a Ponzi Scheme?

A Ponzi scheme is a fraudulent investment program that promises very high rates of return. Often, the plan is presented to investors as one with little risk to their investment. The first group of investors then recruit other investors, usually friends and family, to also invest. As new investors come on board, the earlier investors see high rates of return. Eventually, however, it becomes difficult to find new investors and the entire scheme collapses.

History of the Ponzi Scheme

The illegal activity gets its name from Charles Ponzi, an Italian immigrant who came to America in 1903. Ponzi conned investors into giving him millions and paid them returns using money provided by other investors.The scheme is very similar to pyramid schemes used by many sales organizations where sellers make more money by getting others to sell than they do selling items on their own.

Typical Victims of Ponzi Schemes

Experts say that Florida has a high number of Ponzi victims because of its large elderly population. Many Ponzi schemes are connected to religion, ethnicity or shared beliefs. Many are of the understanding that victims of Ponzi schemes are naïve, uneducated or looking for a way to get rich quick. In fact, as victims of the Bernie Madoff scandal indicated, almost anyone can become the victim of a Ponzi scheme.

How to Recognize a Ponzi Scheme

A Ponzi scheme has a few key indicators. These include:

– Investments that deliver consistent, high returns despite downturns in the market

– Investments that are not registered with the United States Securities Exchange Commission (SEC)

– Investment professionals who are not licensed or registered with the federal government or the state

– Complicated, complex or secretive strategies

– No account statements or statements that often have inconsistencies or errors

– Inability to cash out an investment, non-payment of returns as promised or a request to “roll-over” an investment rather than receive payment

Contact Khonsari Law Group for Legal Representation

Many times, those prosecuted for white collar crimes were unaware of their own involvement. The most important thing to do is hire an experienced and knowledgeable lawyer to be there by your side. Contact the Khonsari Law Group today to learn what rights you may have under the law. Call or visit us online to schedule your consultation.