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How Ponzi Schemes Work
A Ponzi scheme is an investment scam that involves the payment of supposed profits to earlier investors using funds collected from newer investors. Investors are misled into believing they are receiving returns on their investments, when in reality the money is from another investor who has been duped. The Ponzi payments made are instrumental in keeping the scheme afloat creating the illusion that the investment is successful and legitimate when in reality the wrongdoers are syphoning investor funds. Ponzi schemes inevitably come to a crashing halt once the flow of new investor money stops and the perpetrators are not able to make the Ponzi payments to earlier investors, leaving all remaining investors without their hard-earned money.
Classic Warning Signs
of
Ponzi Schemes
Many successful, financially intelligent people fall prey to Ponzi schemes. Victims lose a great deal of money in the investment scam because they misplace their trust in unscrupulous promoters. Fraudsters operating a Ponzi scheme often make empty promises to convince investors to trust them with their hard-earned money. Scam artists exploit the trust and friendship that exists in tight-knit groups, such as seniors and members of a religious or ethnic community. The fraudsters involved in affinity scams are often trusted members of the community. Investors tend to be blinded when a con artist comes across as likeable or trustworthy.
In uncertain times, fraudsters are increasingly targeting the elderly for Ponzi schemes. With many seniors in isolation for their own safety they are more vulnerable to financial abuse because they do not have anyone to ask for input or advice about an investment. Wrongdoers often make empty promises to investors to convince them to invest their hard-earned money. Here are some of the hallmark warning signs of Ponzi schemes to look out for when considering potential investment opportunities:
Bernie Madoff, mastermind of the nation’s biggest investment fraud, dies at 82
Trust Riera Law to Recover Your Losses
Riera Law represents victims of Ponzi schemes who were scammed through a trusted stockbroker or financial advisor who works for a securities brokerage firm. While falling victim to a Ponzi scheme can be devastating and leave you feeling helpless, you have no reason to feel embarrassed. Many highly educated and affluent people fall for Ponzi scheme scams.
If you have been scammed, it is crucial to take legal action as soon as possible to recover your losses and to prevent others from being victimized. If you have been fraudulently victimized in a Ponzi scheme, we can assist you.
Contact us today, and let Riera Law fight for you to recoup your losses!
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