Ponzi Scheme Fraud Attorney

What Is a Ponzi Scheme?

The basic concept behind what we commonly refer to as a “Ponzi” scheme is much older than the name itself. This type of financial scheme is named after one of the most famous fraud scams that occurred in recent history. In the 1920s, Charles Ponzi defrauded thousands of investors in Boston in what is now known as a “Ponzi” scheme.

The Securities and Exchange Commission (SEC) describes a Ponzi scheme as “an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. With little or no legitimate earnings, Ponzi schemes require a constant flow of money from new investors to continue.”

What sets a Ponzi scheme apart from otherwise legal investment schemes is that there is no legitimate attempt to invest funds and earn money from those investments. Instead, “investing” is essentially all smoke and mirrors. At some point, a Ponzi scheme starts to unravel. This typically happens when it becomes impossible to find sufficient new investors to keep the scheme running or when too many existing investors insist on withdrawing their funds.
 

How Does a Ponzi Scheme Violate Federal Law?

Ponzi schemes involve complex financial transactions that can easily be confused with legitimate investment schemes that went awry and failed. Multi-level marketing and/or investing is not, in and of itself, illegal if there was a genuine attempt to profit from the plan. What sets a Ponzi scheme apart from similar legal investment schemes is that in a Ponzi scheme, there is no intent and no real effort to profit from investments. The federal criminal code does not specifically address Ponzi schemes. Instead, participants in a Ponzi scheme are typically charged with offenses such as:

• Mail Fraud. Mail fraud requires a scheme to defraud and the mailing of a letter, advertisement, or other correspondence for the purpose of executing the scheme.
• Wire Fraud. The use of any interstate electronic communications in an attempt to defraud someone of property constitutes wire fraud.
• Bank Fraud. Federal bank fraud involves knowingly executing a scheme in order to defraud a financial institution to obtain money or property from a financial institution using fraudulent representations.
• Securities Fraud. Illegal acts that encourage investors to make purchase or sales decisions based on false information can be charged as securities fraud.
• Money Laundering. Money laundering “cleans” illegally obtained money using complex financial transactions so that the money appears to be legally earned or obtained.

 

What Are the Potential Penalties for a Ponzi Scheme Fraud Conviction?

The potential penalties you face, if convicted for participation in a Ponzi scheme, will depend on several factors, starting with the nature of the charges against you. Nevertheless, criminal offenses such as federal mail and bank fraud as well as money laundering carry the potential for a prison sentence of 20 years or more if convicted.
 

Are There Defenses to Allegations That I Participated in a Ponzi Scheme?

Because of the complex nature of financial investment plans and strategies, it can be challenging for federal law enforcement investigators to separate legitimate investment schemes that failed from intentionally deceptive Ponzi schemes. If you have been targeted or charged in an investigation, your Ponzi scheme fraud attorney may employ one of these common defenses:

• Proving it was a legitimate investment scheme. Criminal offenses related to the operation of a Ponzi scheme include an element of intent and/or knowledge that the prosecution must prove to secure a conviction. Your attorney may rely on your lack of intent, focusing on the fact that your intent was to operate a legitimate investment scheme that simply failed.
• Claiming you were not in a position of control. Ponzi schemes often rely on investors to recruit new investors to keep the profits coming in. That also means that the original investors often get caught up in a law enforcement investigation. If that is the case, your defense may focus on your lack of knowledge and control over the scheme.
• Illegal search and seizure. Federal financial crime investigations tend to rely heavily on documents and data obtained during a search and seizure. If a search was not conducted legally, your attorney may be able to get all evidence obtained during the search excluded from a trial.

 

Get Help from an Experienced Ponzi Scheme Fraud Attorney

When the federal government is investigating or prosecuting you for participation in a suspected Ponzi scheme, it can be intimidating given the size and scope of the government’s resources. Knowing the harsh penalties that can result if convicted of charges related to a Ponzi scheme fraud, it is clearly in your best interest to protect yourself and your future by consulting with an experienced Ponzi scheme fraud attorney immediately.

At Haas Law, we understand what is at stake for you, your reputation, and your family if the federal government is pursuing you in relation to a Ponzi scheme. Let us put our considerable resources and extensive experience to work protecting everything important to you.

Call us at 407-755-7675, chat with us online, or submit our online form today. Because we understand that time is of the essence when federal law enforcement authorities are investigating you, our calls are answered 24 hours a day, allowing you to schedule an appointment as soon as possible to discuss your legal options.