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Ponzi Scheme

Securities Exchange Commission defines a Ponzi scheme as an investment fraud system that involves the payment of purported returns to existing investors from funds contributed by new investors.  In other words, it’s a scam to collect money without following through on its purported promises of investing.

Ponzi schemes are also known as pyramid schemes. This falls under the umbrella of white collar crimes.  A crime committed through deceit and motivated by capital gain. Many people are victims of fraud; some lose their entire life savings.

Anytime you are advised in investing funds, you should do your homework. The FBI has tips on avoiding Ponzi schemes which are: consulting an unconnected broker or licensed financial adviser and be careful of investments that promises earnings claims. Also, the Securities Exchange Commission has warning signs investors should be aware of.

Investments should be registered with the SEC or with state regulators, avoid investments if you don’t understand it and if you don’t receive payments, you may be a victim of a Ponzi scheme. Con artists are very smart people; they tend to work hard to disguise their fraud.

Investments are very risky! That being said, because Ponzi scheme come in various forms and structures, it is best to evaluate your investments in order to ensure that you are not involved in one.

The Spencer Law Firm handles many various forms of white collar criminal cases, including protecting investors from improper financial structures. The Spencer Law Firm works with on both ends protecting investors from harmful investment schemes and also developing and structuring business capital development, so we have the expertise and experience to see all sides of the equation and the ability to catch improper investment structures.

Please contact The Spencer Law Firm if you have any suspicion about your investment.