Ponzi Schemes in Los Angeles
What Is a Ponzi Scheme?
Ponzi schemes have gained much attention following the well-publicized trial and conviction of Bernie Madoff, yet many are unaware of what a Ponzi scheme entails. Named after Charles Ponzi, this white collar crime, similar to securities fraud, is a fraudulent investment scheme that lures investors into paying money to an operation that falsely promises large returns of profit. The returns are paid to early investors using their own money or the money contributed by later investors who joined the scheme after them. There is often no or limited legitimate profit earned by any products, services or those in charge of the operation.
Although Ponzi schemes are one of the older schemes used by white collar offenders, they remain a common form of fraud. Promising high returns to investors and using their money to pay previous investors is one of the oldest tricks in the book and has the potential to victimize many people. In many cases the proposed investment program does not exist at all. Due to the amount of scammed investors and flagrant disregard on behalf of the Ponzi scheme creators, the US government frequently publishes literature to educate the public on defending themselves against such scams.
Fighting Multiple Charges of Ponzi Schemes
Wire fraud, money laundering, tax fraud and other forms of white collar crimes are also commonly involved with Ponzi schemes and federal courts can charge you with several crimes simultaneously, rather than filing a single Ponzi scheme charge. Because Ponzi schemes can involve several crimes, prosecutors may also charge defendants with racketeering activity under the RICO act, therefore adding enhanced punishments.
If you are being charged with running or willfully organizing a Ponzi scheme, you may face various and separate charges that, when combined, can greatly increase fines and prison sentences. Retaining legal counsel is necessary. No matter the size of the alleged scheme, you need the federal criminal defense our firm can provide.