Jailed alleged Ponzi schemer Allen Stanford had been deemed incompetent to stand trial due to possible brain damage due to being severely beaten by another inmate and then subsequent addiction to anti-anxiety meds. The judge specifically said this does not mean he can be released on bail.
Unlike all other Ponzi schemers, Stanford was refused bail and incarcerated in Texas under what seems deliberately harsh conditions. If he was laundering drug cartel money, as some suspect, then there could be powerful forces who don’t want him saying anything in court, forces that could easily order him beaten up while in jail.
The Assoc. of Certified Fraud Examiners has a useful list of red flags of Ponzi schemes.
Sounds too good to be true. If an investment sounds too good to be true, it probably is. This old saying is perhaps the easiest way to spot a Ponzi scam.
And some of the perhaps less obvious red flags.
History of consistent returns
High-pressure sales tactics
Pressure to reinvest
Complex trading strategies
Read the whole thing. It might save your financial life.
The Feds have uncovered a $40 million Ponzi scheme in Folsom, CA. If the miscreants get convicted on state charges, Folsom Prison is right there waiting for them. How convenient.
Investors were promised low risk investments paying 42% a year. Sigh. Just some relatively small time bottom feeders making a fraudulent living from the table scraps ignored by the big players in our apparently quite corrupt financial system.
How many more Ponzi schemes are out there? Hundreds, probably.
Stanford Group Co., a Houston investment company with assets of $8.4 billion, is being investigated because, surprise, they claim to have made returns of 10-15% on CDs since 1995.
“That type of return ignores the business cycle,” said L. Burke Files, principal of Financial Examinations & Evaluations Inc., a Tempe, Arizona-based financial investigation firm. “His returns fall outside the bell curve of probability.”
Sound familiar? And why would supposedly sophisticated investors believe they could get a 15% return on certificates of deposit?