This is a list of
Ponzi scheme
A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...
s, fraudulent investment operations that pay out
returns
Return may refer to:
In business, economics, and finance
* Return on investment (ROI), the financial gain after an expense.
* Rate of return, the financial term for the profit or loss derived from an investment
* Tax return, a blank document or t ...
to investors from money paid in by subsequent investors rather than from any actual profit earned from the operation of a
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
.
Historical examples
19th century
1860s
* Jacob Young, William Abrams, and Nancy Clem ran what author Wendy Gamber argues, in her book ''The Notorious Mrs. Clem: Murder and Money in the Gilded Age'', was the first-ever Ponzi scheme.
* In Munich, Germany,
Adele Spitzeder
Adelheid Luise "Adele" Spitzeder (; 9 February 1832 – 27 or 28 October 1895), also known by her stage name Adele Vio, was a German actress, folk singer, and con artist. Initially a promising young actress, Spitzeder became a well-known private ...
founded the "Spitzedersche Privatbank" in 1869, promising an interest rate of 10 percent per month. By the time the scheme collapsed in 1872 it had become the largest case of fraud in 19th-century Bavaria.
1870s
*
Johann Baptist Placht ran a Ponzi scheme in Vienna from 1872 to 1873, claiming to invest in the stock market.
*Fraudster
Sarah Howe
Sarah Howe (born 1983) is a Chinese–British poet, editor and researcher in English literature. Her first full poetry collection, '' Loop of Jade'', won the T. S. Eliot Prize and the ''Sunday Times'' / Peters Fraser & Dunlop Young Writer of ...
opened a savings bank called ''Ladies' Deposit Company'' in 1878 meant to target unmarried women. She claimed that the bank worked in conjunction with a Quaker charity that wanted to help less privileged women. She promised high interest rates of eight percent per month. There was in fact no such charity. Howe was able to gain over 1,200 clients and US$500,000 in deposits before the ''
Boston Daily Advertiser
The ''Boston Daily Advertiser'' (est. 1813) was the first daily newspaper in Boston, and for many years the only daily paper in Boston.
History
The ''Advertiser'' was established in 1813, and in March 1814 it was purchased by journalist Nathan ...
'' began outing LDC as a fraud in 1880. Howe was arrested, convicted, and served three years in prison. She attempted some other schemes after release in the 1880s, either being arrested, or fleeing to avoid it, eventually becoming a fortune teller until her death in 1892.
1890s
*Before Charles Ponzi, in 1899 William "520 Percent" Miller opened for business as the "Franklin Syndicate" in
Brooklyn
Brooklyn () is a borough of New York City, coextensive with Kings County, in the U.S. state of New York. Kings County is the most populous county in the State of New York, and the second-most densely populated county in the United States, be ...
, New York. Miller promised 10% a week interest and exploited some of the main themes of Ponzi schemes such as customers re-investing the interest they made. He defrauded buyers out of $1 million and was sentenced to jail for 10 years. After he was pardoned, he opened a grocery store on Long Island. During the Ponzi investigation, Miller was interviewed by ''
The Boston Post
''The Boston Post'' was a daily newspaper in New England for over a hundred years before it folded in 1956. The ''Post'' was founded in November 1831 by two prominent Boston businessmen, Charles G. Greene and William Beals.
Edwin Grozier bough ...
'' to compare his scheme to Ponzi's—the interviewer found them remarkably similar, but Ponzi's became more famous for taking in seven times as much money.
[Zuckoff, Mitchell. ''Ponzi's Scheme: The True Story of a Financial Legend''. Random House: New York, 2005. ()]
20th century
1920s
*
Charles Ponzi
Charles Ponzi (, ; born Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi; March 3, 1882 – January 15, 1949) was an Italian swindler and con artist who operated in the U.S. and Canada. His aliases included ''Charles Ponci'', ''Carlo'', and ''Cha ...
became noted in 1920, in Boston, for his supposed arbitrage scheme, which ultimately proved to be merely a masquerade for paying off early investors with the deposits of later investors. The Ponzi Scheme is named after him. He claimed he would double investors' money in 90 days through a bizarre plan to buy and resell international postal-reply coupons. (These, according to the
U.S. Postal Service
The United States Postal Service (USPS), also known as the Post Office, U.S. Mail, or Postal Service, is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the U. ...
, then operating as the Post Office Department, actually cannot be redeemed for cash.) Ponzi collected more than $8 million from about 30,000 investors in just seven months, before the scheme collapsed. He served 14 years in prison, was deported from the United States, and spent the rest of his life vainly seeking ways to provide restitution for the losses of his investors.
1930s
*
Ivar Kreuger
Ivar Kreuger (; 2 March 1880 – 12 March 1932) was a Swedish civil engineer, financier, entrepreneur and industrialist. In 1908, he co-founded the construction company Kreuger & Toll Byggnads AB, which specialized in new building techniques. B ...
, a
Swedish
Swedish or ' may refer to:
Anything from or related to Sweden, a country in Northern Europe. Or, specifically:
* Swedish language, a North Germanic language spoken primarily in Sweden and Finland
** Swedish alphabet, the official alphabet used by ...
businessman known as the "match king", built a Ponzi scheme, defrauding investors based on the supposedly fantastic profitability and ever-expanding nature of his match monopolies. The scheme soon collapsed in the 1930s, and Kreuger shot himself.
1970s
Equity Funding Equity Funding Corporation of America was a Los Angeles-based U.S. financial conglomerate that marketed a package of mutual funds and life insurance to private individuals in the 1960s and 70s. It collapsed in scandal in 1973 after former employee ...
1980s
*In the 1980s,
Jean Pierre Van Rossem ran a
stock market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, as ...
investment company called "Moneytron" in
Belgium
Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
. Van Rossem claimed that he had developed a
statistical model
A statistical model is a mathematical model that embodies a set of statistical assumptions concerning the generation of Sample (statistics), sample data (and similar data from a larger Statistical population, population). A statistical model repres ...
to predict the behavior of the stock markets and beat the capitalist system. Investors believed Van Rossem's claims, and that trust, coupled with his gift for self-promotion, allowed Van Rossem to accumulate
US$
The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
860 million (about 32 billion
Belgian franc
The Belgian franc ( nl, Belgische frank, french: Franc belge, german: Belgischer Franken) was the currency of the Kingdom of Belgium from 1832 until 2002 when the Euro was introduced. It was subdivided into 100 subunits, each known as a in Dutch ...
s). He also traded duplicate stocks. In 1991, he was sentenced to five years in prison for what was in part a Ponzi scheme; according to him, it was "a way to fuck the system".
*Between 1970 and 1984 in
Portugal
Portugal, officially the Portuguese Republic ( pt, República Portuguesa, links=yes ), is a country whose mainland is located on the Iberian Peninsula of Southwestern Europe, and whose territory also includes the Atlantic archipelagos of ...
,
Dona Branca
Maria Branca dos Santos, more commonly referred to as "'' Dona''" Branca (1902–1992), was a Portuguese criminal known chiefly for maintaining a Ponzi scheme in Portugal between 1970 and 1984 that paid a ten percent monthly interest. During ...
maintained a scheme that paid 10% monthly interest. In 1988, she was sentenced to 10 years in prison. She always claimed that she was only trying to help the poor, but in her trial it was proven that she had received the equivalent of €85 million (almost US$120 million).
*In January 1984, Adriaan Nieuwoudt started the so-called
"Kubus" scheme with an apparent beauty product in
South Africa
South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
. Subscribers to the scheme bought a supposedly biological substance called an "activator", that was used to grow cultures in milk. After growing for a week or two, the cultures were harvested and dried, and sold back to the scheme. The cultures were never used for a beauty product but were simply ground up and resold to further investors as activators.
*1600 investors in Diamond Mortgage Company and A.J. Obie, two firms with the same managers, lost approximately $50 million in what the
Michigan Court of Appeals
The Michigan Court of Appeals is the intermediate-level appellate court of the state of Michigan. It was created by the Michigan Constitution of 1963, and commenced operations in 1965. Its opinions are reported both in an official publication of ...
described as "the largest reported 'Ponzi' scheme in the history of the state". It led to the passage in 1987 of the Mortgage Brokers, Lenders, and Servicers Act.
*In the 1980s in
San Diego
San Diego ( , ; ) is a city on the Pacific Ocean coast of Southern California located immediately adjacent to the Mexico–United States border. With a 2020 population of 1,386,932, it is the List of United States cities by population, eigh ...
,
California
California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
, J. David & Company, a purported currency and commodity trading and investing operation named after its founder, J. David Dominelli, a withdrawn and shy currency and commodity trader, was revealed to be a Ponzi scheme which took in $200 million and returned $120 million to investors, leaving a net loss of $80 million. The scheme touched all levels of upper-class business and professional life in San Diego and environs. One of those most closely involved was Nancy Hoover, the mayor of
Del Mar, California
Del Mar (; Spanish for "Of the Sea") is a beach town in San Diego County, California, located on the coast of the Pacific Ocean. Established in 1885 as a seaside resort, the city incorporated in 1959. The Del Mar Horse Races are hosted on the De ...
, a cozy upscale beach town just north of La Jolla. Hoover was J. David's assistant and live-in companion at the time. Also involved was the prominent New York law firm
Rogers & Wells
Rogers & Wells was an international law firm founded in New York City in 1873. After several name changes, it was renamed for William P. Rogers and John A. Wells. Firms that merged with it include Dwight, Harris, Koegel & Caskey of New York.
...
(now
Clifford Chance
Clifford Chance LLP is an international law firm headquartered in London, United Kingdom, and a member of the "Magic Circle", a group of London-based multinational law firms. It ranks as one of top ten largest law firms in the world measured bo ...
), which had advised J. David (through a rogue partner) and others. When the fall came, J. David briefly escaped to Montserrat in the Caribbean, but was returned ultimately to plead guilty to federal charges and was sentenced to 20 years' imprisonment.
*Between 1978 and 1983,
Ron Rewald ran an investment firm in
Hawaii
Hawaii ( ; haw, Hawaii or ) is a state in the Western United States, located in the Pacific Ocean about from the U.S. mainland. It is the only U.S. state outside North America, the only state that is an archipelago, and the only stat ...
. The firm declared
bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
in 1983 and was revealed to have been a Ponzi scheme which defrauded over 400 investors of more than $22 million.
Rewald claimed that he had been operating the firm as a front for the U.S.
Central Intelligence Agency
The Central Intelligence Agency (CIA ), known informally as the Agency and historically as the Company, is a civilian foreign intelligence service of the federal government of the United States, officially tasked with gathering, processing, ...
.
Rewald was convicted and sentenced to 80 years in prison; he was paroled in 1995.
*From 1986 to 2001,
Reed Slatkin
Reed Eliot Slatkin (January 22, 1949 – June 23, 2015) was an initial investor and co-founder of EarthLink and the perpetrator of one of the largest Ponzi schemes in the United States since that conducted by Charles Ponzi himself.
Slatkin had ...
raised almost $600 million from about 800 wealthy investors in what is described on Slatkin's Wikipedia page as "one of the largest Ponzi schemes in the United States since that conducted by
Charles Ponzi
Charles Ponzi (, ; born Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi; March 3, 1882 – January 15, 1949) was an Italian swindler and con artist who operated in the U.S. and Canada. His aliases included ''Charles Ponci'', ''Carlo'', and ''Cha ...
himself".
* was a
pyramid scheme
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly im ...
run by Ken'ichi Uchimura (). Behind the Tenka Ikka no Kai was the Dai-ichi Sōgo Keizai Kenkyūsho (), run by Uchimura. This organization, established in 1972, once had a million members. It was a cause of the enactment of Japan's law prohibiting pyramid schemes. In 1986, the Dai-ichi Sōgo Keizai Kenkyūsho declared bankruptcy, leaving debts amounting to 189,600,000,000 yen. It has been called "the biggest pyramid scheme in history."
1990s
*
МММ was a Russian company that perpetrated one of the world's largest Ponzi schemes of all time. By different estimates from 5 to 40 million people lost up to $10 billion. The company started attracting money from private investors, promising annual returns of up to 1,000%. It is unclear whether a Ponzi scheme was the initial intention, as such extravagant returns might have been possible during the Russian hyperinflation in such commerce as import-export.
*In Romania, between 1991 and 1994, the
Caritas scheme run by the "Caritas" company of
Cluj-Napoca
; hu, kincses város)
, official_name=Cluj-Napoca
, native_name=
, image_skyline=
, subdivision_type1 = Counties of Romania, County
, subdivision_name1 = Cluj County
, subdivision_type2 = Subdivisions of Romania, Status
, subdivision_name2 ...
, owned by
Ioan Stoica promised eight times the money invested in six months. It attracted 400,000 depositors from all over the country who invested 1,257 billion
lei (about US$1 billion) before it finally went bankrupt on August 14, 1994, having a debt of US$450 million. The owner, Ioan Stoica, was sentenced in 1995 by the
Cluj
; hu, kincses város)
, official_name=Cluj-Napoca
, native_name=
, image_skyline=
, subdivision_type1 = Counties of Romania, County
, subdivision_name1 = Cluj County
, subdivision_type2 = Subdivisions of Romania, Status
, subdivision_name2 ...
Court to a total of seven years in prison for fraud, but he appealed and it was reduced to two years; then he went on to the
Supreme Court of Justice
A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
and the sentence was finally reduced to one year and a half.
*
Anubhav Teak Plantations scam (India): From 1992 to 1998, a number of teak plantation Ponzi schemes were floated in India, prominent being
Anubhav Plantations. These promised extravagant profits for people who invested in planting teak (done by purchasing "teak shares"). In 1998, Anubhav plantations collapsed leaving more than 31,000 depositors defrauded to the tune of Rs. 10712
Crore
A crore (; abbreviated cr) denotes ten million (10,000,000 or 107 in scientific notation) and is equal to 100 lakh in the Indian numbering system. It is written as 1,00,00,000 with the local 2,2,3 style of digit group separators (one lakh is e ...
s.
*
Towers Financial Corporation
Towers Financial Corporation was a debt collection agency based in Manhattan.Allan Sloan (February 16, 1993)"THE SEC VS. STEVEN HOFFENBERG: A CASE OF LEANING FORTUNES AT TOWERS FINANCIAL?,"''The Washington Post''. Between 1988 and 1993, Towers Fina ...
, a bill collection agency, collapsed in 1993; in 1995, chairman
Steven Hoffenberg
Steven Jude Hoffenberg (January 12, 1945 – August 2022) was an American businessman and fraudster. He was the founder, CEO, president, and chairman of Towers Financial Corporation, a debt collection agency, which was later discovered to be a ...
pleaded guilty to bilking investors out of $475 million. Judge
Robert W. Sweet
Robert Workman Sweet (October 15, 1922 – March 24, 2019) was an American jurist and United States federal judge, United States district judge of the United States District Court for the Southern District of New York.
Education and career
Sweet ...
sentenced him to 20 years in prison, plus a $1 million fine and $463 million in restitution. He settled a civil suit with the
U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
for $60 million.
He briefly was the owner of the ''
New York Post
The ''New York Post'' (''NY Post'') is a conservative daily tabloid newspaper published in New York City. The ''Post'' also operates NYPost.com, the celebrity gossip site PageSix.com, and the entertainment site Decider.com.
It was established ...
''. At the time the SEC considered the fraud to be "one of the largest Ponzi schemes in history."
*In late 1994, the
European Kings Club The European Kings Club (EKC) was a large-scale Ponzi scheme operated from 1991 to 1994 in Switzerland, Germany and Austria by the German nationals Damara and Harald Bertges and Hans Günther Spachtholz.
The EKC promised investors profit rates of ...
collapsed, with ensuing losses of about $1.1 billion. This scam was led by Damara Bertges and Hans Günther Spachtholz. In the
Swiss canton of Uri and
Glarus
, neighboring_municipalities= Glarus Nord, Glarus Süd, Muotathal (SZ), Innerthal (SZ)
, twintowns= Wiesbaden-Biebrich (Germany)
}
Glarus (; gsw, Glaris; french: Glaris; it, Glarona; rm, Glaruna) is the capital of the canton of Glarus in S ...
, it was estimated that about one adult in ten invested into the EKC. The scam involved buying "letters" valued at 1,400 Swiss francs that entitled buyers to receive 12 monthly payments of 200 Swiss francs. The organisation was based in Gelnhausen, Germany.
*In early 1996, the
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
(SEC) filed a civil action against
Bennett Funding Group, its chief financial officer, Patrick R. Bennett, and other companies Bennett controlled, in connection with a massive Ponzi scheme. The companies fraudulently raised hundreds of millions of dollars, purportedly to purchase assignments of equipment leases and promissory notes.
*From 1993 until 1997, a church named
Greater Ministries International
Greater Ministries International was an Evangelical Christian ministry that ran a Ponzi scheme in an affinity fraud that had taken nearly 500 million dollars from 18,000 people by the time it was shut down by federal authorities in August 1999. He ...
in
Tampa, Florida
Tampa () is a city on the Gulf Coast of the United States, Gulf Coast of the U.S. state of Florida. The city's borders include the north shore of Tampa Bay and the east shore of Old Tampa Bay. Tampa is the largest city in the Tampa Bay area and ...
, headed by Gerald Payne bilked over 18,000 people out of $500 million. Payne and other church elders promised the church members double their money back, citing Biblical scripture. However, nearly all the money was lost or hidden away. Church leaders received prison sentences ranging from 13 to 27 years.
*In the mid-1990s,
Albania
Albania ( ; sq, Shqipëri or ), or , also or . officially the Republic of Albania ( sq, Republika e Shqipërisë), is a country in Southeastern Europe. It is located on the Adriatic and Ionian Seas within the Mediterranean Sea and shares ...
was transitioning into a liberalized market economy after years under a State-controlled economy reinforced by the
cult of personality
A cult of personality, or a cult of the leader, Mudde, Cas and Kaltwasser, Cristóbal Rovira (2017) ''Populism: A Very Short Introduction''. New York: Oxford University Press. p. 63. is the result of an effort which is made to create an id ...
involving longtime Communist leader
Enver Hoxha
Enver Halil Hoxha ( , ; 16 October 190811 April 1985) was an Albanian communist politician who was the authoritarian ruler of Albania from 1944 until his death in 1985. He was First Secretary of the Party of Labour of Albania from 1941 unt ...
; the rudimentary financial system became dominated by pyramid schemes, and government officials tacitly endorsed a series of pyramid investment funds. Many Albanians, approximately two-thirds of the population, invested in them. In
1997
File:1997 Events Collage.png, From left, clockwise: The movie set of ''Titanic'', the highest-grossing movie in history at the time; ''Harry Potter and the Philosopher's Stone'', is published; Comet Hale-Bopp passes by Earth and becomes one of t ...
, Albanians, who had lost $1.2 billion, took their protest to the streets where uncontainable rioting and attacks on government infrastructure led to the toppling of the government and the temporary existence of a stateless society. Although technically a Ponzi Scheme, the Albanian scams were commonly referred to as pyramid schemes both popularly and by the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
.
[Christopher Jarvis]
The Rise and Fall of Albania's Pyramid Schemes
''Finance & Development: A Quarterly Magazine of the IMF'', March 2000.
*In 1996, Sidney Schwartz and his son, Stuart F. Schwartz, pleaded guilty to charges of running a multimillion-dollar Ponzi scheme that targeted members of a Long Island, New York, country club at which the senior Schwartz was a member of the board of governors.
*In 1997,
South Africa
South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
n businessman
Kenny Kunene
Kenny Kunene (born 21 October 1970) is a South African ex-convict, businessman and former Secretary-General of the Patriotic Alliance. While working as a high school English teacher, Kunene opened a shebeen selling alcohol after work and began e ...
was convicted of running a Ponzi scheme with over 2,000 investors and sentenced to six years in prison.
*In
Delhi
Delhi, officially the National Capital Territory (NCT) of Delhi, is a city and a union territory of India containing New Delhi, the capital of India. Straddling the Yamuna river, primarily its western or right bank, Delhi shares borders w ...
, India, Hoffland Finance collapsed amid a major scandal in 1998. Hoffland, a category II merchant banker, had been suspended by SEBI, which directed it to refrain from undertaking any new portfolio management assignments. It had floated a scheme, called "Invest Card", that lured investors with a return of 27% annually.
*Since 1998,
1040 Sunshine Project has been an illegal
pyramid scheme
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly im ...
s or
Multi-level marketing
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
and originated in
Beihai
Beihai (; Postal romanization: Pakhoi) is a prefecture-level city in the south of Guangxi, People's Republic of China. Its status as a seaport on the north shore of the Gulf of Tonkin has granted it historical importance as a port of internation ...
City,
Guangxi
Guangxi (; ; Chinese postal romanization, alternately romanized as Kwanghsi; ; za, Gvangjsih, italics=yes), officially the Guangxi Zhuang Autonomous Region (GZAR), is an Autonomous regions of China, autonomous region of the People's Republic ...
Zhuang Autonomous Region.
21st century
2000s
*In 2001, some
Haiti
Haiti (; ht, Ayiti ; French: ), officially the Republic of Haiti (); ) and formerly known as Hayti, is a country located on the island of Hispaniola in the Greater Antilles archipelago of the Caribbean Sea, east of Cuba and Jamaica, and ...
ans fell prey to Ponzi schemers offering rates up to 15%. The outfits, called "cooperatives", appeared to be implicitly backed by the government and became wildly popular in the population at large; investors felt safe because the co-ops were openly advertising in radio and TV ads using Haitian pop stars as spokespeople. It is estimated that more than $240 million was swindled from investors, equivalent to 60% of the country's government budget.
*The Brothers was a large investment operation in
Costa Rica
Costa Rica (, ; ; literally "Rich Coast"), officially the Republic of Costa Rica ( es, República de Costa Rica), is a country in the Central American region of North America, bordered by Nicaragua to the north, the Caribbean Sea to the no ...
, from the late 1980s until 2002, eventually exposed as a Ponzi scheme. The fund was operated by brothers Luis Enrique and Osvaldo Villalobos. Investigators determined that the scam took in at least $400 million. Most of the clientele were American and Canadian retirees, but some Costa Ricans also invested the minimum $10,000. About 6,300 individuals ultimately were involved. Interest rates were 3% per month, usually paid in cash, or 2.8% compounded. The ability to pay such high interest was attributed to Luis Enrique Villalobos' existing agricultural aviation business, investment in unspecified European high-yield funds, and loans to Coca-Cola, among others. Osvaldo Villalobos' role was primarily to move money around a large number of
shell companies
A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or s ...
and then pay investors. In May 2007, Osvaldo Villalobos was sentenced to 18 years in prison for fraud and illegal banking, while Luis Enrique Villalobos remains a fugitive.
*In 2003, the SEC shut down a $1 billion scheme by Mutual Benefits Company in Florida, run by Peter Lombardi, affecting 28,000 investors. Mutual claimed it used the money to pay
viatical settlement
A viatical settlement (from Latin ''viaticum'', something received before death)Entry for "Viatical Settlement" at Merriam-Webster On-Line Dictionary, retrieved November 12, 2012, at http://www.merriam-webster.com/dictionary/viatical settlement is ...
s to
HIV
The human immunodeficiency viruses (HIV) are two species of ''Lentivirus'' (a subgroup of retrovirus) that infect humans. Over time, they cause acquired immunodeficiency syndrome (AIDS), a condition in which progressive failure of the immune ...
patients. Lombardi is now serving a 20-year prison sentence.
*In 2004, the SEC fined
Raymond James
Raymond James Financial, Inc. is an American multinational independent investment bank and financial services company providing financial services to individuals, corporations, and municipalities through its subsidiary companies that engage prim ...
$6.9 million for failure to supervise former broker Dennis Herula, who was accused of participating with others in a Ponzi scheme that raised about $44.5 million from investors in 1999–2000. Herula himself raised about $16.5 million of investor funds, most of which was later transferred to his wife's brokerage account at Raymond James; he was arrested in Bermuda and extradited to the United States, where he pleaded guilty to fraud and was sentenced to 15 years and eight months' imprisonment.
*In February 2005, Moshe Leichner and his son Zvi were sentenced to 20 years in federal prison for running a Ponzi scheme that defrauded hundreds of investors out of more than $95 million for investors of GunnAllen Financial (shut down by regulators in March 2010 for fraud allegations and losses related to another Ponzi scheme); additionally, Safe Harbor Capital Management (now dba HarborLight Capital Management) lost $40 million for their investors.
*In May 2006,
James Paul Lewis Jr. was sentenced to 30 years in federal prison for running a $311 million Ponzi scheme over a 20-year period. He operated under the name
Financial Advisory Consultants from
Lake Forest, California
Lake Forest is a city in Orange County, California. The population was 85,858 at the 2020 census.
Lake Forest incorporated as a city on December 20, 1991. Prior to incorporation, the community had been known as El Toro. Following a vote in 20 ...
.
*In October 2006, in
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
, two prominent members of society and several others were held for running an alleged scam, known as SwissCash or
Swiss Mutual Fund The Swiss Mutual Fund, also known as Swiss Cash or Swisscash, is an offshore investment company headquartered in the Dominica, Commonwealth of Dominica. It involved in operating an Internet-based investment scheme which offers returns of up to 300% ...
(1948). SwissCash offered returns of up to 300% within a 15-month investment period. Currently, this
HYIP
A high-yield investment program (HYIP) is a type of Ponzi scheme, an investment scam that promises unsustainably high return on investment by paying previous investors with the money invested by new investors.
Mechanics
Operators generally set ...
investment is offered to citizens of
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
,
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...
, and
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
. It claimed investors' funds were channeled to business activities ranging from oil exploration to shipping and agriculture in the Caribbean. The company claims to be operating out of
New York City
New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
and incorporated in the
Commonwealth of Dominica
Dominica ( or ; Kalinago language, Kalinago: ; french: Dominique; Dominican Creole French: ), officially the Commonwealth of Dominica, is an island country in the Caribbean. The capital, Roseau, is located on the western side of the island. It ...
.
*In October 2006, Gregory Nathan, a Sydney fund manager, was arrested on charges including dishonest conduct and obtaining money by making false and misleading statements, in what investigators discovered to have been a Ponzi scheme. On September 19, 2008, Nathan was sentenced to seven years' imprisonment, including a non-parole period of five years.
*In 2007, a million Chinese lost over $1.2 billion in a scheme involving ant farming.
*On April 13, 2007,
Sibtul Shah was arrested for Ponzi scheme that promised to double the initial investment in 15, later extended to 70, days.
*On June 27, 2007, former boy band mogul
Lou Pearlman
Louis Jay Pearlman (June 19, 1954 – August 19, 2016) was an American record producer. He was the person behind many successful 1990s boy bands, having formed and funded the Backstreet Boys. After their massive success, he then developed NSYNC. ...
was indicted by a grand jury on several counts of fraud and money laundering after running a $500 million Ponzi scheme over 20 years; he pleaded guilty and was sentenced to 25 years' imprisonment.
*On August 17, 2007, the
Philippine National Bureau of Investigation (NBI) filed syndicated ''estafa'' cases against 27 officers and investors of FrancSwiss Investment, a Ponzi pyramiding scam on the Internet. Charged were Michael Mansfield, chief financial officer; Kurt Sandelman, risk management team leader; Rupert Benedict Da Vinco, investment team leader; Julia Rodriguez, international banking team leader; Hector Willem Sidberg, marketing and international affairs; Fernando Munoz, customer service leader; Roger Smith, the British chief operation officer of FS Investment in the Asia-Pacific region; Bensy Fong, the Singaporean system operation officer; a Singaporean marketing officer; a certain Michelle and Mike, Filipino secretaries and collectors of money from investors; and 16 investors, including arrested suspect Eleazard Castillo, 26, a native of Cabuyao, Ilocos Sur, allegedly one of the financial advisers of FrancSwiss Investment. Forty-one investors claimed they lost a total of $75,000 to the investment scheme. FrancSwiss deceived investors in the Philippines of ₱1 billion ($50 million).
*On March 7, 2008,
WinCapita Oy's Internet site was shut down due to investigation of the company. The company had collected about 100 million euros by this point. This, the so-called biggest pyramid-scheme in
Finland
Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...
, was put up by Hannu Kailajärvi and his partner Tiina Wartti. They marketed the company by saying that the company is a successful currency exchange firm and that people can join the club only by invitation. They also marketed the idea for investors by promising net profits of over 400%. In 2013, the court of appeal for
Helsinki
Helsinki ( or ; ; sv, Helsingfors, ) is the Capital city, capital, primate city, primate, and List of cities and towns in Finland, most populous city of Finland. Located on the shore of the Gulf of Finland, it is the seat of the region of U ...
sentenced Kailajärvi to prison for 5 years and Wartti for one year and 3 months to conditional discharge.
*On May 2, 2008, it was reported that John G. Ervin of Safevest LLC had been arrested by the FBI on suspicion of running a Ponzi scheme that collected $25.7 million, mostly from Christian investors, partly recruited through Ervin's business partner Pastor John Slye and members of his church. Specifically, according to newspaper the ''Orange County Register'', "the company recruited church members to sell the investment to other church members."
Slye had run a cancer research charity, which gave investors confidence. The scheme ran from May 2007 but started to run out of funds by October as investors asked for their money back. Safevest LLC returned $18 million to investors, the rest having been split among five main expenditures, including the two business partners' families, the purchase of a $1 million golf course, and $950,000 for GTS Research Inc. The latter, run by Carl LaRue Godfrey who was previously convicted for "illegal business practices and various other crimes",
was served a Desist and Refrain order by the State of California in August 2007,
the year of the Safevest scheme. GTS Research had claimed to have a patent pending for a new energy source.
The fifth portion, $510,000, was paid to Dennis D. Cope, who had a criminal conviction in relation to a previous Ponzi scheme. Ervin himself had been sued in 2003 for running a separate $7.7 million Ponzi scheme, a fact that could be discovered through an internet search.
*In the third and the biggest Philippine Ponzi scam (involving $150 million and $250 million, respectively), criminal charges, based on a suit filed by 21,000 complainants, were filed in June 2008, with the Department of Justice, against Performance Investments Products Corp (PIPC) officers and incorporators for violation of the Securities Regulation Code (SRC), versus: Singaporean national Michael H.K. Liew, PIPC president; Cristina Gonzalez-Tuason, general manager; and other officers and agents: Ma. Cristina Bautista-Jurado, Barbara Garcia, Anthony Kierulf, Eugene Go, Michael Melchor Nubla, Ma. Pamela Morris, Luis Aragon, Renato Sarmiento Jr., Victor Jose Vergel de Dios, Nicoline Amoranto Mendoza, Jose Tengco III, Oudine Santos and Herley Jesuitas.
* In March 2008, Val Southwick of
Ogden, Utah
Ogden is a city in and the county seat of Weber County, Utah, United States, approximately east of the Great Salt Lake and north of Salt Lake City. The population was 87,321 in 2020, according to the US Census Bureau, making it Utah's eighth ...
, pleaded guilty to operating an elaborate real estate investing Ponzi scheme, believed to be the largest in Utah's history, with losses of up to $200 million.
*On August 1, 2008, the WexTrust Investment firm was shut down by the SEC, charging that WexTrust and two of its owners (Joseph Shereshevsky of Norfolk, Virginia, and Steven Byers of Oak Brook, Illinois) operated a Ponzi-type scheme by promising unusually high returns to earlier investors and paying them with money raised from later investors. The SEC case, filed in federal court in Manhattan, New York, alleged that WexTrust and the two men defrauded investors by diverting at least $100 million to unauthorized uses. WexTrust targeted the Orthodox Jewish community, particularly in Norfolk, VA and New York City. The receiver, Timothy Coleman, has returned only 2% of principal to WexTrust investors. Shereshevsky and Byers pleaded guilty to securities fraud, mail fraud and conspiracy, and were sentenced to 21 years and 10 months' imprisonment, and 13 years and four months' imprisonment, respectively, in addition to being ordered to make restitution and disgorge their gains.
*
Business Consulting International was a London-based investment company that collapsed after being exposed by a City of London Police investigation in 2008 as the United Kingdom's biggest ponzi scheme, estimated at £115 million. The business was set up and run by London-based Indian businessman Kautilya Nandan Pruthi, in partnership with Kenneth Peacock and John Anderson.
*On December 1, 2008, in Saint Cloud, Minnesota, celebrity businessman
Tom Petters
Thomas Joseph Petters is a former American businessman and chairman and CEO of Petters Group Worldwide, a company which stole over $2 billion in a Ponzi scheme. He was convicted of massive business fraud in 2009 and is now imprisoned at the Unit ...
was charged by the Federal government as the mastermind behind a $3.65 billion Ponzi scheme that bilked investors over a 13-year period. Petters lived an extravagant lifestyle supported by his Ponzi scheme. Petters faces 20 counts of
wire and mail fraud,
conspiracy
A conspiracy, also known as a plot, is a secret plan or agreement between persons (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder or treason, especially with political motivation, while keeping their agree ...
, and
money laundering
Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...
for the alleged investment scheme that ran from 1995 through September 2008. He is expected to plead not guilty, but his co-conspirators in the Ponzi scheme, Deanna Coleman, Robert White, Michael Catain, and Larry Reynolds, have all pleaded guilty. The Petters Ponzi scheme came to an end when Petters' top co-conspirator Deanna Coleman turned government informant and wore a wire. Petters and the others were planning to flee to countries without extradition agreements with the U.S. Deanna Coleman and Michael Catain had properties in Costa Rica. On December 2, 2009, Tom Petters was found guilty in the U.S. District Court in St. Paul, Minnesota, on 20 counts of wire and mail fraud.
*On December 10, 2008,
Bernard Madoff
Bernard Lawrence Madoff ( ; April 29, 1938April 14, 2021) was an American fraudster and financier who was the admitted mastermind of the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDAQ s ...
, who, through the defrauding of his clients, had created one of the most prominent financial firms on
Wall Street
Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...
, told sons that his investments were "all one big lie". The following day he was arrested and charged with a single count of securities fraud. , the paper losses were estimated to be $65 billion, easily making it the largest fraud in history. Madoff was sentenced to 150 years in prison on June 29, 2009. He died in prison in 2021.
*On January 9, 2009, the SEC charged
Joseph S. Forte from Broomall, Pennsylvania, with masterminding a $50 million Ponzi scheme. He swindled over 80 investors, mostly close friends from 1995 to 2009. The SEC investigator called Forte a "complete fraud". Records show Forte used, for personal purposes, over $28 million. On November 24, 2009, Forte was sentenced to 15 years in prison.
*On January 16, 2009, the
United Kingdom Serious Fraud Office uncovered an £80 million buy-to-let property fraud scheme operating under a company called Practical Property Portfolio in which at least 1,750 investors were conned out of £25,000 each in return for a promise of a house in the North East of England. All five directors—John Potts, Peter Gosling, Natalie Laverick, Peter Graham, and Eric Armstrong—pleaded guilty to fraud and were sentenced in March 2009.
*On January 26, 2009,
Nicholas Cosmo
Nicholas Cosmo (born 1971) is an American former businessman and white-collar criminal. He was arrested January 26, 2009 on charges of an estimated $370–413 million Ponzi scheme. Cosmo conducted the scheme using his company Agape World Inc ...
, founder of Agape World, surrendered to federal authorities in connection with a suspected $380 million Ponzi scheme. Previously convicted of fraud in 1999, Cosmo surrendered at the Long Island Railroad train station in Hicksville, New York, and was sentenced to 50 years' imprisonment. In March 2009, a lawsuit was filed in New York against
Bank of America
The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...
, one of the largest banks in the United States, that claimed that Bank of America "established, equipped and staffed" a branch office in the headquarters of Cosmo's firm, Agape Merchant Advance. As a result, the lawsuit contends that the bank knowingly "assisted, facilitated and furthered" Mr. Cosmo's fraudulent scheme.
*On February 9, 2009, the City of London Police Economic Crime Department arrested Terry Freeman, director of GFX Capital Markets Ltd, over a £40 million fraud which is possibly a Ponzi scheme.
*On February 17, 2009, the Stanford International Bank and proprietor
Allen Stanford
Robert Allen Stanford (born March 24, 1950) is an American financial fraudster, former financier, and sponsor of professional sports. He is serving a 110-year federal prison sentence, having been convicted in 2012 of fraud, on charges that his i ...
were accused of "massive fraud" by U.S. authorities, and SIB's assets were frozen. The apparent Ponzi scheme drew in more than $8 billion of "deposits" to Sir Allen's bank in Antigua, many from investors in Latin America. He was arrested by the
Federal Bureau of Investigation
The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice, ...
on June 14, 2009, and sentenced to 110 years' imprisonment on June 14, 2012.
*On February 25, 2009, the SEC charged
James Nicholson for allegedly "defraud
nghundreds of investors of millions of dollars"
*On March 13, 2009, a 67-year-old Ohio woman named Joanne Schneider was sentenced to three years in prison, the minimum allowed, for operating a Ponzi scheme that cost investors an estimated $60 million.
*On June 17, 2009,
Donald Anthony Walker Young (also known as Tony Young or Walker Young), had his office seized for using money from new investors to pay previous investors and using some of the money to purchase a vacation home in Palm Beach, Florida. Young operated the alleged Ponzi scheme through an investment partnership Acorn II L.P., which he established in 2001 to invest in publicly traded securities, authorities said. The SEC alleged in its 22-page complaint that the fraud began in mid-2005 and continued until recently. He was indicted on April 1, 2010; pleaded guilty in July 2010, to mail fraud and money laundering and was sentenced to 17½ years in prison in May 2011.
*On June 2, 2009, the
Colorado State Grand Jury indicted Jason Trevor Brooks of
Boulder, Colorado
Boulder is a home rule city that is the county seat and most populous municipality of Boulder County, Colorado, United States. The city population was 108,250 at the 2020 United States census, making it the 12th most populous city in Color ...
, on 24 counts of security fraud and theft. Authorities allege that from June 2005 to February 2008, Brooks collected about $10 million from investors to invest, but then used a vast majority of the funds for personal expenses, gambling, and to make interest payments and payouts to other investors. Brooks, working under the
Genius Inc.
Genius is a characteristic of original and exceptional insight in the performance of some art or endeavor that surpasses expectations, sets new standards for future works, establishes better methods of operation, or remains outside the capabiliti ...
name, told investors he had a distribution agreement with
Matsushita Electric Industrial Co. Ltd. of Japan, which allowed him to purchase electronics and appliances as a distributor and then resell them for a profit to various home builders and other businesses, authorities said. On April 27, 2010, Brooks pleaded guilty to two felony counts of securities fraud and two counts of making an untrue statement. He was sentenced to eight years in prison for each of the four counts, to run cumulatively for a total sentence of 32 years, and was also ordered to pay more than $5.1 million in restitution to his victims.
*On June 12, 2009, investors were reported to have lost billions of South African Rands in a Ponzi scheme masterminded by
Barry Tannenbaum.
*On November 16, 2009, the SEC charged four individuals and two companies for perpetrating a Ponzi scheme to defraud over 300 investors of $30 million. Pennsylvania-based
Mantria Corporation, run by executives Troy Wragg and Amanda Knorr, supposedly focused on green initiatives such as a "
carbon negative
Carbon dioxide removal (CDR), also known as negative emissions, is a process in which carbon dioxide gas () is removed from the atmosphere and sequestered for long periods of time. Similarly, greenhouse gas removal (GGR) or negative greenho ...
" housing community in Tennessee and an organic waste–derived "
biochar
Biochar is the lightweight black residue, made of carbon and Ash (analytical chemistry),
ashes, remaining after the pyrolysis of biomass. Biochar is defined by the International Biochar Initiative as "the solid material obtained from the th ...
" charcoal substitute production plant. Between September 2007 through November 2009, Mantria Corporation raised funds through Denver-based Speed of Wealth LLC, run by Wayde and Donna McKelvy. The SEC alleged that Mantria and Speed of Wealth exaggerated the scope and success of Mantria's operations. Subsequent charges estimate Mantria and Speed of Wealth raised $54 million, of which they paid $17.5 million to investors, using investors' own funds to pay those returns.
*December 1, 2009:
Scott W. Rothstein
Scott W. Rothstein (born June 10, 1962) is an American disbarred lawyer, convicted felon, and the former managing shareholder, chairman, and chief executive officer of the now-defunct Rothstein Rosenfeldt Adler law firm. He funded an extravag ...
—a disbarred lawyer and the former managing shareholder, chairman, and
chief executive officer
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
of the now-defunct Rothstein Rosenfeldt Adler law firm—was accused of funding his philanthropy, political contributions, law firm salaries, and an extravagant lifestyle with a massive $1.4 billion
Ponzi scheme
A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...
. Scott Rothstein turned himself in to federal authorities and was subsequently arrested on charges related to the
Racketeer Influenced and Corrupt Organizations Act
The Racketeer Influenced and Corrupt Organizations (RICO) Act is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization.
RICO was en ...
(RICO). Rothstein was denied bond by U.S. Magistrate Judge Robin Rosenbaum, who ruled that due to his ability to forge documents, he was considered a flight risk. Although his arraignment plea was not guilty, Rothstein cooperated with the government and reversed his plea to guilty of five federal crimes on January 27, 2010. He was sentenced to 50 years despite the prosecution asking for 40 years.
2010s
*In 2010, Trevor Cook of Minnesota pled guilty and began serving a 25-year federal prison sentence in connection with the Oxford Group, which reportedly took in $194 million. Bo Beckman still has charges pending in connection with the scheme.
*In early 2010,
Tzvi Erez
Tzvi Erez (born 1968, Israel
Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country ...
from Toronto, Canada, scammed 76 creditors out of a combined $27 million. He created an illegitimate print business called E Graphix and convinced investors to give him large loans in order to carry out fictional printing orders. He was charged with fraud and forgery by Toronto police but was not convicted, since the Canadian courts lacked adequate trial time to give him a trial. The following year, he was arrested again and charged with fraud in a similar print investment scheme that netted $9 million dollars. In 2018, he was convicted for fraud and sentenced to eight years.
*On May 20, 2010, the SEC filed a federal case against Edward A. Allen and David L. Olson, two former brokers of
World Financial Group
World Financial Group (WFG) is a multi-level marketing financial and insurance services company based in Johns Creek, Georgia, a suburb of Atlanta, which sells investment, insurance, and various other financial products through a network of d ...
/
World Group Securities, accusing them of having raised approximately $14.8 million through the offer and sale of
promissory note
A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...
s as part of an illegal Ponzi scheme in the States of Ohio and Florida between September 2005 and December 2008.
*On June 15, 2010, the United States Securities and Exchange commission filed an enforcement action against Matt Jennings and his cohorts and accused them of running a Ponzi Scheme wherein they stole over $53 million from investors. On December 12, 2012, the court appointed receiver for Westmore entities filed an action against Robert Jennings for return of investor funds.
*In December 2011, film exhibitor
Norman Adie
Norman Allen Adie (born November 25, 1946) is a former theater owner/operator/developer and confessed Ponzi schemer, presently inmate number 64354-054 in the Federal Detention Center (FDC) in Miami, Florida. Born in Scotland, Adie began his career ...
pleaded guilty in U.S. Federal Court to running a Ponzi scheme in New York and Pennsylvania.
* In December 2011, the SEC accused Wendell Jacobson and his son Allen, both of
Fountain Green, Utah
Fountain Green is a city in Sanpete County, Utah, United States. The population was 1,071 at the 2010 census.
History
Fountain Green was originally called "Uintah Springs", and under the latter name settlement was made in 1859. A post office ca ...
, of operating a $200 million Ponzi scheme that promised to invest in property and made heavy use of the Jacobsons' membership in the
LDS Church
The Church of Jesus Christ of Latter-day Saints, informally known as the LDS Church or Mormon Church, is a Nontrinitarianism, nontrinitarian Christianity, Christian church that considers itself to be the Restorationism, restoration of the ...
to recruit victims. The Federal case was resolved in 2012 with the liquidation of the Jacobsens' company MSI, but Utah officials subsequently filed additional charges in 2015; the case is ongoing as of March 2019.
* In May 2012, Joseph Blimline was sentenced to 20 years in federal prison for operating two oil and gas Ponzi schemes. He operated a Ponzi scheme from 2003 to 2005 in
Michigan
Michigan () is a state in the Great Lakes region of the upper Midwestern United States. With a population of nearly 10.12 million and an area of nearly , Michigan is the 10th-largest state by population, the 11th-largest by area, and the ...
, netting over $28 million. He then operated a Ponzi scheme in
Texas
Texas (, ; Spanish language, Spanish: ''Texas'', ''Tejas'') is a state in the South Central United States, South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2 ...
, using a company called Provident Royalties, that lasted from 2006 to 2009 and netted over $400 million.
*On August 17, 2012, the SEC filed a federal case against defendants Paul Burks and Zeek Rewards, based out of
North Carolina
North Carolina () is a state in the Southeastern region of the United States. The state is the 28th largest and 9th-most populous of the United States. It is bordered by Virginia to the north, the Atlantic Ocean to the east, Georgia and So ...
. Paul Burks ran the entity of Zeek Rewards, a fraudulent investment opportunity that promised investors returns as high as 1.5% per day by sharing in the profits of Zeekler, a penny auction. Investors were encouraged to recruit new members to increase their returns. New investors had to pay a monthly "subscription" of up to $99/month and an initial investment of up to $10,000. The higher the initial investment, the higher the returns appeared. The Zeekler entity was an online penny auction that served as a front for the Zeek Rewards entity. Investors in the Zeek Rewards scheme were promised payouts from the profits made on Zeekler by recruiting new members and giving out "bids" that customers would use on the penny auction. While the Zeekler website did bring in revenue, it was only about 1% of what investors believed was being brought into the Zeek Rewards company. The vast majority of dispersed funds were paid out from newly recruited investors. It is believed that the ponzi scheme was a $600M enterprise and the number of affected investors was 1 million when the SEC filed suit. This made Zeek Rewards the largest ponzi scheme in history by number of affected investors, even though numerous other ponzi schemes have had larger enterprise values. Paul Burks paid $4 million to the SEC and agreed to cooperate. It remains unknown how much, if any, of the funds lost in the scheme will be returned to affected investors, as of August 2012.
*In August 2012, Trendon T. Shavers (aka "Pirate" and "pirateat40"), the founder and operator of "Bitcoin Savings and Trust" (BTCST),
a non-existent company advertised over an internet forum, disappeared from the public scene. Shavers raised at least 700,000
Bitcoin
Bitcoin ( abbreviation: BTC; sign: ₿) is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distr ...
in BTCST investments by running it as a Ponzi scheme. The fact that BTCST was run using Bitcoin makes this a unique instance of a Ponzi scheme. It allowed Shavers to initially stay completely anonymous, making it possible for him to just disappear with the money from his investors. Although some called it a
pyramid scheme
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly im ...
, BTCST is generally considered a Ponzi scheme. At the time he disappeared, somewhere around August 31, the 700,000 BTC were valued at around US$4,500,000. However, since Bitcoin prices increased significantly since the time it happened, they are now estimated to be worth more than US$2.5 billion. The
SEC charged Shavers with securities fraud.
Shavers pled guilty, and on July 21, 2016, he was sentenced to 18 months in prison, and 3 years of supervised release.
*On September 5, 2012, the Economic Offences Wing of the
Tamil Nadu
Tamil Nadu (; , TN) is a States and union territories of India, state in southern India. It is the List of states and union territories of India by area, tenth largest Indian state by area and the List of states and union territories of India ...
Police arrested M S Guru, the mastermind of a 'contract emu farming' scheme for financial fraud and cheating over 12,000 investors. The filed cases alone amount to over $28 million.
*In 2012, U.S. Department of Justice busted AdSurfDaily Ponzi Scheme which promised big returns for clicking on advertisements. DOJ forfeited ASD's assets, and imprisoned its founder, Thomas A. Bowdoin. Other notable ASD figures include Kenneth Wayne Leaming and Christian Oesch (who later became the CEO of BX Protocol maker Delta), who unsuccessfully "intervened" to claim monies lost in the ASD Ponzi Scheme.
*On October 1, 2012, a joint raiding operation was conducted on Genneva Malaysia Sdn Bhd and its affiliates by the Royal Malaysian Police, Ministry of Domestic Trade, Cooperatives and Consumerism, Companies Commission of Malaysia, and Bank Negara Malaysia. Singapore's Commercial Affairs Department has also conducted a similar operation against Genneva Pte. Ltd. in Singapore. Estimation of RM10 billion (close to US$330 million) filed cases.
*In April 2013, in
Israel
Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
,
Eran Mizrahi was convicted for multiple counts of fraud and money laundering and sentenced to 12 years
*In June 2013, in
Tunisia
)
, image_map = Tunisia location (orthographic projection).svg
, map_caption = Location of Tunisia in northern Africa
, image_map2 =
, capital = Tunis
, largest_city = capital
, ...
, a fraudulent investment network collapsed when the master of a Ponzi scheme, Adel Dridi, tried to flee the country following government investigation with more than 80 million
Tunisian dinar
The dinar ( ar, دينار, french: Dinar, ISO 4217 currency code: ''TND'') is the currency of Tunisia. It is subdivided into 1000 milim or millimes (). The abbreviation ''DT'' is often used in Tunisia, although writing "dinar" after the amount i ...
s that he stole from around fifty thousand investors, many of whom claimed that they sold their possessions to enjoy the interests of Yosr development. Adel Dridi was arrested the day after he ran, and he is now being prosecuted. The company "Yosr Developpement Ltd" director was behind money laundering, illegal investments and Ponzi scheme frauds.
*On February 26, 2014, Gregory Loles, who formerly ran Farnbacher-Loles and related investment entities, was sentenced to 25 years' imprisonment by federal judge Alvin W. Thompson for a $25 million Ponzi scheme resulting in several million dollars in losses.
*In June 2014, the
Securities Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
alleged that Tom Abraham and Kenneth Grant, their company KGTA Petroleum, Ltd., stockbrokers Jeffrey Gainer and Jerry Cicolani, and others orchestrated and/or helped promote a Ponzi scheme related to KGTA, a petroleum company that purported to earn profits by buying and reselling crude oil and refined fuel products. Grant and Abdallah were accused of having operated KGTA as a Ponzi scheme. The oil purchase orders never existed and KGTA did not sell fuel or oil to its purported buyers, according to the complaint. In classic Ponzi scheme fashion, KGTA allegedly used some of the funds raised from new investors to pay fake returns to earlier investors. The two men raised at least $20.73 million between October 8, 2012, and February of this year. In October 2016, Grant, Abdallah, Jerry Cicolani, Jeffrey Gainer, Mark George, and Kelly Hood were sentenced to prison.
*In March 2014, Canadian
Arlan Galbraith was sentenced to over seven years in prison for a Ponzi scheme involving pigeon breeding. His
Pigeon King International firm (which collapsed in 2008) was found to be recruiting investors with the promise of buying back pigeons for various purposes, but in reality for which there was no genuine market. He had taken nearly $42 million from farmers.
*In September 2014, the
Securities Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
conducted an emergency asset freeze and filed civil fraud alleging that a California-based company, Nationwide Automated Systems, Inc. (NASI), was operating a $123 million ATM ponzi scheme.
* In July 2015, a federal grand jury indicted Edwin Fujinaga, Junzo Suzuki and Paul Suzuki for operating a $1.5 billion Ponzi scheme. Fujinaga operated a company called MRI International Inc. in
Las Vegas
Las Vegas (; Spanish for "The Meadows"), often known simply as Vegas, is the 25th-most populous city in the United States, the most populous city in the state of Nevada, and the county seat of Clark County. The city anchors the Las Vegas ...
, Nevada. The company claimed that it collected medical accounts receivable at a discount and then collected the full amount from insurers. The victims were mostly Japanese citizens. Fujinaga and MRI were earlier found liable in a civil suit for $584 million.
* In October 2015, in
Israel
Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
,
Amir Bramly
Amir Bramly ( he, אמיר ברמלי, alternative English: Amir Bramli) (born October 4, 1976) is an Israeli investor and business man convicted of money laundering and fraud. He is the founder and former manager of Rubicon Business Group (in ...
's Kela fund, which offered fixed-interest investments supposedly for a low-risk "Capital Completion" strategy, went into liquidation proceedings before the
Tel Aviv
Tel Aviv-Yafo ( he, תֵּל־אָבִיב-יָפוֹ, translit=Tēl-ʾĀvīv-Yāfō ; ar, تَلّ أَبِيب – يَافَا, translit=Tall ʾAbīb-Yāfā, links=no), often referred to as just Tel Aviv, is the most populous city in the G ...
district court after not meeting client outflow demands. During the proceedings, more than 300 million NIS of unfulfilled debt, mostly from investors, were set before the court. In addition, the court-appointed liquidator produced a report claiming that funds in the Kela fund were not actually used for "Capital completion" but rather funneled into Rubicon Business Group, and that in addition the funds were moved from Rubicon to Bramly and his family, due to which a court order prohibiting disposition of assets was placed on Bramly and members of his family. As a result, the Kela fund, Rubicon Business Group, and a number of held companies were placed in permanent liquidation by the Tel Aviv district court in January 2016 after the court determined that funds were intermeshed between the companies, and that debts, mainly to investors, exceeded assets. In June 2016, Bramly was indicted for theft, fraud and laundering of more than 400 million NIS, and Kela's investment recruiter
Sivan Zibulski, as part of a plea bargain in which she will serve as a prosecutor's witness, was convicted and sentenced in January 2017.
* In June 2013, Brazilian Justice first blocked
Telexfree
Telexfree (stylized as TelexFREE), a trade name owned by Telexfree Inc., was a multibillion-dollar Ponzi scheme disguised as an internet phone service company. Prosecutors have described it as the largest fraud of all time in terms of the numb ...
Brazilian operations, and in September 2015, convicted the company for operating a Ponzi Scheme. Telexfree operations in US were shut down by SEC April 2014. In October 2016, Telexfree co-owner James Merrill pleaded guilty.
Telexfree was a multibillion-dollar Ponzi scheme desguised as an internet phone service company. Prosecutors have described it as the largest fraud of all time in terms of the number of people affected—more than 1 million, with victims in various countries.
* On October 7, 2015, Burton Greenberg of Plantation, Florida, and Bruce Kane, an Ithaca, NY, CPA but resident of Fort Lauderdale, Florida, were arrested by the FBI for a 9-year Ponzi scheme that swindled investors out of over $10 million. The scam was operated under the name "Global Financial Fund 8, LLP". In February 2016, Greenberg pleaded guilty, and in December 2016, Kane also pleaded guilty, and both were sentenced to 97 months (8 years and 1 month) in federal prison for wire fraud. Both men blamed the other for being the mastermind of the fraud. Kane is an inmate at
FCI Bennettsville, and Greenberg is an inmate at
FCI Miami
The Federal Correctional Institution, Miami (FCI Miami) is a low-security United States federal prison for male inmates in Florida. It is operated by the Federal Bureau of Prisons (BOP), a division of the United States Department of Justice. The in ...
. U.S. District Court Judge Thomas McAvoy called it a "conscienceless" crime.
*In late 2015, the
Fanya Metal Exchange
The Fanya Metal Exchange fraud was a notorious financial scam in China (also known as China's Ponzi Scheme) that was operational from 2011 to 2015. The collapse of the exchange sparked a series of nationwide protests against the involvement of C ...
in China ceased operations. It was later determined to be a Ponzi scheme and embezzlement fraud. The founder, Shan Jiuliang, was sentenced to 18 years in jail. Over 220,000 creditors lost 43 billion
yuan ($6.7 billion).
* In July 2016, the SEC obtained a Temporary Restraining Order against Traffic Monsoon LLC and its owner Charles Scoville, a Utah-based endeavor promoted as an advertising firm, accusing him of operating a Ponzi Scheme and four counts of fraud
* In October 2017, authorities charged Michael Scronic of Pound Ridge, New York, with criminal and civil charges, alleging that he lost or spent all but about $27,000 of the $21.8 million he told investors in his hedge fund he had.
* In December 2017, the Woodbridge Group of Companies (a/k/a
Woodbridge Securities) was charged as an alleged US$1.2 billion Ponzi scheme run by real estate developer Robert H. Shapiro (not to be confused with attorney
Robert L. Shapiro) by The U.S. Securities and Exchange Commission (SEC). On December 4, 2017, Woodbridge and 236 related
limited liability companies
A limited liability company (LLC for short) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a ...
Woodbridge formed filed for bankruptcy in the Delaware Federal Court. The Woodbridge Group of Companies filed for bankruptcy amid the departure of its chief executive and an investigation into potential securities fraud linked to $1 billion in investments. The Chapter 11 filing on Monday in U.S. Bankruptcy Court in Wilmington, Delaware, cited "unforeseen costs associated with ongoing litigation and regulatory compliance." The SEC had been probing whether Woodbridge defrauded investors who invested more than $1 billion. The agency also sought more information on about 236 "liability companies Woodbridge formed, according to an October SEC court filing. On December 21, 2017, the U.S. Securities and Exchange Commission said it had sued luxury real estate developer Shapiro and his Woodbridge Group of Companies for allegedly operating a $1.2 billion Ponzi scheme targeting thousands of investors. According to the SEC’s complaint, Shapiro ran a "sham" business model that allegedly defrauded more than 8,400 investors, including many elderly, in unregistered Woodbridge funds. It said Shapiro promised 5 to 10 percent annual interest on money he said would be used for loans to commercial property owners paying 11 to 15 percent interest rates. "Mr. Shapiro is cooperating with the bankruptcy to protect the assets held for the benefit of Woodbridge’s stakeholders," Ryan O’Quinn, a lawyer for Shapiro, said in e-mail. "He denies any allegation of wrongdoing and looks forward to his opportunity to defend himself in a court of law."
* On January 16, 2018, the
cryptocurrency
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It i ...
token
Bitconnect
Bitconnect (also spelled BitConnect and KimConnect; stylized ''bitconnect'', ticker code BCC) was an open-source cryptocurrency in 2016–2018 that was connected with a high-yield investment program, a type of Ponzi scheme. After the platform a ...
(BCC) plummeted in value after from a high of $331 to $21 within six hours, its market cap declining from a high of $2 billion to $130 million. Bitconnect, which promised 1% daily returns through a "crypto-currency trading bot" was forced to close. The scheme also had a particularly lucrative affiliate program, which promoted users to lure others into the scheme, ultimately leading to lack of new users and collapse in the value of Bitconnect tokens. It is not to be conflated with
Bitcoin
Bitcoin ( abbreviation: BTC; sign: ₿) is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distr ...
, which is a legitimate cryptocurrency based on a permanent limited supply.
* In April 2018, Deepak Jangra and Deepak Malhotra were investigated and arrested by Delhi Cyber Crime for operating a series of bitcoin-based MLM schemes since 2016.
* In September 2018, Claud R. "Rick" Koerber of Utah was found guilty of operating a Ponzi scheme promoted a property investment business that took almost $100 million from investors.
* In November 2018, Gaylen Rust of Utah was accused of operating a Ponzi scheme masqueraded as a
precious metals
Precious metals are rare, naturally occurring metallic chemical elements of high economic value.
Chemically, the precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high lustre. ...
investment pool generating growth of 25–40% per year, scamming between $47 million and $200 million from more than 200 investors.
* In early 2019, in the
Kapa investment scam,
* In January 2020, the SEC filed a federal case against a Californian couple, Jeff and Paulette Carpoff, charging them of organizing a $910 million Ponzi scheme. The money was taken from 17 investors between 2011 and 2018. The couple used their solar generator companies,
DC Solar
DC Solar Solutions Inc., trading as DC Solar, was a Benicia, California solar power supplier company whose owners lived lavishly on ill-gotten gains in Martinez, California, Martinez. The company was shut down by the Federal Bureau of Investigat ...
Solutions Inc. and DC Solar Distribution Inc., to convince investors of buying solar generators, which at least half of them were never manufactured. According to the investigations, the couple promised the investors tax credits, lease payments, and profits, but in fact the majority of the lease revenue was being paid from new investors. Instead they used the money to spend on their lavish lifestyle, including a
NASCAR Xfinity Series
The NASCAR Xfinity Series (NXS) is a stock car racing series organized by NASCAR. It is promoted as NASCAR's second-tier circuit to the organization's top level Cup Series. NXS events are frequently held as a support race on the day prior to a ...
sponsorship deal with
Chip Ganassi Racing
Chip Ganassi Racing, LLC (CGR), also sometimes branded as Chip Ganassi Racing Teams, is an American auto racing organization with teams competing in the IndyCar Series, NTT IndyCar Series, International Motor Sports Association, IMSA WeatherTech ...
, which shut down their Xfinity Series team when the scheme was busted. The couple pled guilty.
*Since 2019, an MLM scheme using Ethereum blockchain technology called million.money was in operations with over 300,000 investors.
*Since 2016, a Ponzi scheme called "Unique Finance" has been operating in Iran, Iraq, Afghanistan and Yemen under the guise of investment in Nasdaq. The company claims to be based in Switzerland, and
Finma
The Swiss Financial Market Supervisory Authority (FINMA) is the Switzerland, Swiss government body responsible for financial regulation. This includes the supervision of banks, insurance companies, stock exchanges and securities dealers, as wel ...
have issued a warning about it.
*On December 30, 2019, the
Securities and Exchanges Commission filed charges against
Today's Growth Consultant Inc. dba "The Income Store" and Kenneth D. Courtright III, claiming the defendants raised funds in an unregistered offering by making use of misrepresentations to investors and potential investors that the entirety of their invested funds would be used to buy or create revenue-generating websites, as well as to administer and promote said websites to further the company’s passive-income generation scheme. However, the SEC alleged that a sizable portion of new investors’ funds were actually used to pay out guaranteed returns to earlier investors and a variety of loans or transferred to Courtright for his personal expenses. According to court documents, Courtright is believed to have raised at least $75 million from some 500 investors between January 1, 2017 and December 30, 2019. Of this total, it is estimated that an amount in excess of $20 million was paid out to early investors as Ponzi-like payments. Furthermore, a minimum of $2 million is believed to have been transferred directly to Courtright for personal use. The SEC has ordered a freeze on the defendants’ assets and filed a restraining order to prevent the destruction or altering of records.
Today's Growth Consultants Inc. dba "The Income Store" was subsequently placed in a receivership to preserve the company's books, records, and assets.
2020s
*In June 2020, an
Ontario Securities Commission
The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown agency which reports to the Ontario legislature through the Minis ...
report found that
QuadrigaCX, believed to be Canada's largest cryptocurrency exchange, was a Ponzi scheme after millions of dollars disappeared following the apparent death of founder Gerald Cotten. It was revealed that Cotten had operated multiple accounts under aliases, credited with 'fictitious currency and crypto asset balances' covering balance shortfalls with other clients' deposits after running into difficulty following falls in the price of crypto assets.
*In November 2020, Australian police searched the Sydney home of
Melissa Caddick
Melissa Louise Caddick (née Grimley; born 21 April 1971Kate McClymont"The 'forever' friend, the former boss, the ex-husband: the early victims of fraudster Melissa Caddick"''Sydney Morning Herald'' 24 April 2021–disappeared 12 November 2 ...
, who had been running a Ponzi scheme thought to have taken about 30 million dollars from investors; many of them are relatives or close friends. Much of the money had been dissipated in high living. Caddick disappeared a few hours after the search. Caddick's family were informed about her
DNA match after her decomposed foot washed up on Bournda Beach on the state's south coast, just south of
Tathra, on 21 February 2021.
*On March 31, 2021,
Gina Champion-Cain was sentenced to 15 Years for a $350 million+ ponzi scheme and obstruction of justice, the largest woman-run Ponzi scheme in American history.
*In May 2022,
Terra
Terra may often refer to:
* Terra (mythology), primeval Roman goddess
* An alternate name for planet Earth, as well as the Latin name for the planet
Terra may also refer to: Geography Astronomy
* Terra (satellite), a multi-national NASA scienti ...
and its associated coin Luna collapsed, wiping almost $45 billion off the
cryptocurrency
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It i ...
market. The collapse led to the loss of hundreds of billions of dollars in the broader cryptocurrency market. Creator
Do Kwon
Kwon Do-Hyung (), more commonly known as Do Kwon, is the South Korean co-founder and CEO of Singapore-based Terraform Labs, the parent company of crashed stablecoin TerraUSD and cryptocurrency Luna. TerraUSD and Luna collapsed in May 2022, wipi ...
was arrested on 23 March 2023.
*In November 2022,
FTX, the second-largest cryptocurrency exchange (behind
Binance
Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies. It was founded in 2017 and is registered in the Cayman Islands.
Binance was founded by Changpeng Zhao, a deve ...
), filed for
Chapter 11 Bankruptcy
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whe ...
after becoming insolvent after it was revealed that customer assets were being used for risky investments, creating an approximate
$8 billion shortfall. The former CEO,
Sam Bankman-Fried
Samuel Benjamin Bankman-Fried (born March 6, 1992), also known by the initialism SBF, is an American suspected fraudster, entrepreneur, investor, and former billionaire. Bankman-Fried was the founder and CEO of the cryptocurrency exchange FTX ...
, is currently "under
olicesupervision". FTX was not a Ponzi scheme in the traditional sense, though, as it probably closer reflects fraud or
embezzlement
Embezzlement is a crime that consists of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type ...
.
Other notable schemes
Other notable (but involving smaller amounts of money) Ponzi schemes include:
*In 1880,
Sarah Howe
Sarah Howe (born 1983) is a Chinese–British poet, editor and researcher in English literature. Her first full poetry collection, '' Loop of Jade'', won the T. S. Eliot Prize and the ''Sunday Times'' / Peters Fraser & Dunlop Young Writer of ...
opened up a "Ladies Deposit" in Boston promising eight percent monthly interest, although she had no method of making profits. This unique scheme was billed as "for women only". Howe was arrested on October 18, 1880, by New York City Police and sentenced to three years in prison.
*On March 22, 2000, four people were indicted in the Northern District of Ohio, on charges including conspiracy to commit and committing mail and wire fraud. A company with which the defendants were affiliated allegedly collected more than $26 million from "investors" without selling any product or service, and paid older investors with the proceeds of the money collected from the newer investors.
*In late 2003, a scheme by Bill Hickman Sr. and his son Bill Jr. was shut down. He had been selling unregistered securities that promised yields of up to 20 percent; more than $8 million was defrauded from dozens of residents of
Pottawatomie County,
Oklahoma
Oklahoma (; Choctaw language, Choctaw: ; chr, ᎣᎧᎳᎰᎹ, ''Okalahoma'' ) is a U.S. state, state in the South Central United States, South Central region of the United States, bordered by Texas on the south and west, Kansas on the nor ...
, along with investors from as far away as
California
California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
. Hickman Sr. was sentenced to eight years in state prison and Hickman Jr. to five years.
*In December 2004,
Mark Drucker
Mark may refer to:
Currency
* Bosnia and Herzegovina convertible mark, the currency of Bosnia and Herzegovina
* East German mark, the currency of the German Democratic Republic
* Estonian mark, the currency of Estonia between 1918 and 1927
* Fi ...
pleaded guilty to a Ponzi scheme in which he told investors that he would use their funds to buy and sell securities through a brokerage account. He claimed that he was making significant profits on his day trades and that he had opportunities to invest in select
IPOs
In demonology, Ipos is an Earl and powerful Prince of Hell (a Duke to some authors) who has thirty-six legions of demons under his command. He knows and can reveal all things, past, present and future (only the future to some authors, and past ...
that were likely to turn a substantial profit in a short period of time, and promised guaranteed returns of up to fifty percent in 90 days or less. In less than two years of trading, Drucker actually lost more than $850,000 in day trading and had no special access to IPOs. He paid out more than $3.6 million to investors while taking in $6.3 million.
*In June 2005, in Los Angeles, California,
John C. Jeffers was sentenced to 14 years in federal prison and ordered to pay $26 million in restitution to more than 80 victims. Jeffers and his confederate
John Minderhout ran what they said was a high-yield investment program they called the "Short Term Financing Transaction". The funds were collected from investors around the world from 1996 through 2000. Some investors were told that proceeds would be used to finance humanitarian projects around the globe, such as low-cost housing for the poor in developing nations. Jeffers sent letters to some victims that falsely claimed the program had been licensed by the Federal Reserve and the program had a relationship with the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
and the
United States Treasury
The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...
. Jeffers and Minderhout promised investors profits of up to 4,000 percent. Most of the money collected in the scheme went to Jeffers to pay commissions to salespeople, to make payments to investors to keep the scheme going, and to pay his own personal expenses.
*In February 2006,
Edmundo Rubi pleaded guilty to bilking hundreds of middle- and low-income investors out of more than $24 million between 1999 and 2001, when he fled the U.S. after becoming aware that he was under suspicion. The investors in the scheme, called "Knight Express", were told that their funds would be used to purchase and resell Federal Reserve notes, and were promised a six percent monthly return. Most of those bilked were part of the Filipino community in San Diego.
*On May 10, 2006, Spanish police arrested nine people associated with
Forum Filatelico
Forum or The Forum (plural forums or fora) may refer to:
Common uses
*Forum (legal), designated space for public expression in the United States
*Forum (Roman), open public space within a Roman city
**Roman Forum, most famous example
*Internet ...
and
Afinsa Bienes Tangibles in an apparent Ponzi scheme that affected 250,000 investors from 1998 to 2001. Investors were promised huge returns from investments in a stamp fund.
*In May 2006,
U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
shut down
Universo Foneclub, designed and owned by
Sanderley Rodrigues de Vasconcelos (aka Sann Rodrigues). It was registered in the US and targeted the Brazilian community. Approximately 1500 people invested more than $3 million.
*On September 15, 2010,
Nevin Shapiro
Nevin Karey Shapiro (born April 13, 1969) is a convicted felon who currently is imprisoned for orchestrating a $930 million Ponzi scheme. According to interviews, he engaged in rampant violations of NCAA rules over eight years as a booster for Un ...
pleaded guilty to a 2005–2009 Ponzi scheme in a Newark, New Jersey court. The scheme brought in approximately $880 million. Headquartered in Miami, the scheme was based on an import/export grocery business but was diverting investments to attract new investors. Among the items seized as a result of his plea were a $5 million Miami mansion and a yacht. He was known as "Lil Luke" because of his relationship with the
Miami Hurricanes football
The Miami Hurricanes football team represents the University of Miami in college football. The Hurricanes compete in the National Collegiate Athletic Association (NCAA) Division I Football Bowl Subdivision and the Coastal Division of the Atlanti ...
team. This was a tribute to
Luther Campbell
Luther Roderick Campbell (born December 22, 1960), also known as Luke Skyywalker, Uncle Luke and simply Luke, is an American rapper, promoter, record executive, actor, and former leader of the rap group 2 Live Crew. He also starred in a short- ...
, a famous former Hurricanes booster. On August 16, 2011, in a story broken by
Yahoo Sports
Yahoo! Sports is a sports news website launched by Yahoo! on December 8, 1997. It receives a majority of its information from STATS, Inc. It employs numerous writers, and has team pages for teams in almost every North American major sport. Bef ...
, Shapiro stated that his support of the team included cash, entertainment,
prostitutes
Prostitution is the business or practice of engaging in sexual activity in exchange for payment. The definition of "sexual activity" varies, and is often defined as an activity requiring physical contact (e.g., sexual intercourse, non-penet ...
, and gifts, all against
NCAA
The National Collegiate Athletic Association (NCAA) is a nonprofit organization that regulates student athletics among about 1,100 schools in the United States, Canada, and Puerto Rico. It also organizes the athletic programs of colleges an ...
rules. For more details on Shapiro's involvement with the Miami program, see
2011 University of Miami athletics scandal
The 2011 University of Miami athletics scandal was a University of Miami athletics scandal involving the university's football and men's basketball programs between 2002 and 2010.
As part of the scandal, these two University of Miami programs wer ...
.
*On January 27, 2017, the
Securities and Exchanges Commission filed charges against Joseph Meli, saying he defrauded more than $97 million from 138 investors. The SEC alleged that the men promised double-digit returns re-selling high-priced tickets to popular Broadway musicals such as
''Hamilton''.
See also
*
Bucket shop (stock market)
A bucket shop is a business that allows gambling based on the prices of stocks or commodities. A 1906 U.S. Supreme Court ruling defined a ''bucket shop'' as "an establishment, nominally for the transaction of a stock exchange business, or busine ...
*
Finance
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...
*
Get-rich-quick scheme
A get-rich-quick scheme is a plan to obtain high rates of return for a small investment. The term "get rich quick" has been used to describe shady investments since at least the early 20th century.
Most schemes create an impression that partic ...
*
High-yield investment program
A high-yield investment program (HYIP) is a type of Ponzi scheme, an investment scam that promises unsustainably high return on investment by paying previous investors with the money invested by new investors.
Mechanics
Operators generally set ...
*
Investment
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing i ...
*
Land banking
Land banking is the practice of aggregating parcels of land for future sale or development.
While in many countries ''land banking'' may refer to various private real estate investment schemes, in the United States it refers to the establishmen ...
*
Lottery
A lottery is a form of gambling that involves the drawing of numbers at random for a prize. Some governments outlaw lotteries, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of ...
*
Matrix scheme
A matrix scheme (also known as a matrix sale or site, and as a hellevator, excavator or ladder scheme) is a business model involving the exchange of money for a certain product with a side bonus of being added to a waiting list for a product of g ...
*
Multi-level marketing
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
*
Outline of finance
The following outline is provided as an overview of and topical guide to finance:
Finance – addresses the ways in which individuals and organizations raise and allocate monetary resources over time, taking into account the risks entailed in ...
*
Pyramid scheme
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly im ...
**
Holiday Magic
Holiday Magic was a multi-level marketing organization, founded in 1964, by William Penn Patrick (1930–1973) in the United States. Originally the organization distributed goods such as home-care products and cosmetics. Company distribut ...
*
Reed Slatkin
Reed Eliot Slatkin (January 22, 1949 – June 23, 2015) was an initial investor and co-founder of EarthLink and the perpetrator of one of the largest Ponzi schemes in the United States since that conducted by Charles Ponzi himself.
Slatkin had ...
*
Stock market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, as ...
*
Success University
References
Further reading
*
*
External links
Ponzi Schemes Have Colorful History NPR
National Public Radio (NPR, stylized in all lowercase) is an American privately and state funded nonprofit media organization headquartered in Washington, D.C., with its NPR West headquarters in Culver City, California. It differs from other ...
.org
Ponzi Scheme in Colombia. people falling prey to pyramid schemes– Social Security Administration
by Bill E. Branscum, a financial crimes investigator.
Ponzi Scheme Tracker by Jordan D. Maglich, securities attorney.
Ponzi Scheme Alerts by Strategy India.
{{DEFAULTSORT:List Of Ponzi Schemes
*
Confidence tricks