Were you recently approached about investing in a “guaranteed” opportunity? Since few investments are guaranteed to turn a profit, you could be wading into the dangerous waters of a Ponzi scheme.
You like to believe that you wouldn’t fall for a scam, but the fact is that Ponzi scams ensnare good people every day. Learn more below about these kinds of scams.
Ponzi schemes typically have warning signs
One thing that all Ponzi scams share is that they promise some form of a get-rich-quick scheme. Low-risk, high-return investments are the unicorns of the financial arena. In other words, they simply don’t exist, no matter how convincing the scammers sound.
Ponzi scams usually have investments that are unregistered with state and federal regulators like the Securities and Exchange Commission (SEC). This means that investors can’t access information about the investment company and its finances, resource management and other vital information.
How you get roped in
Maybe it was your brother-in-law who came to you promising high returns on a sure bet investment. But each investment people make has inherent risk. Some people may have the means to invest in risky ventures with big payoffs, but for most people, a Ponzi scheme that doesn’t yield high returns needs a fresh infusion of capital.
That’s how people can transition from being victims of these scams to becoming the perpetrator. To recover their own investment funds, victims can get roped into a criminal act by recruiting more investors.
If you’re accused of fraud
White-collar crimes are treated very seriously by police and prosecutors. If you face charges of fraud related to participation in a Ponzi scheme, you need professional guidance to build the strongest possible defense.
