RIP-OFF ALERT: Whenever you hear about a secret strategy for making money that involves high returns and no risks, you’re probably facing down a classic Ponzi scheme.
Recently, there were 3 different schemes that separated people from big money that I read about in The Los Angeles Times. Let me give a quick rundown of what I saw:
- A $7 million Ponzi scheme targeted retired bus drivers and train operators with promises of “no risk” investing in stocks, bonds and real estate. The con artist who ran this scheme for 15 years would take very tiny amounts of money and put it in real accounts to feign legitimacy. (The rest was spent on a lavish lifestyle.) As with all Ponzis, original investors were paid off with money from newer investors.
- An $8 million Ponzi scheme operated on the promise of investing in a high-income opportunity with ATMs. Investors were told they could make huge money off the fees at ATMs that did not exist. Original investors were paid with money from newer investors.
- A $9 million Ponzi scheme promised a 25% return on money each year by investing in limited partnerships. The money was supposedly being used to make private loans to successful small businesses. So far, no criminal actions have resulted against the perpetrators of this particular fraud.
High return with no risk does not exist. Let me repeat that: When somebody promises you no risk and high return, it does not exist. What will happen is you will end up having your account cleaned out. Be careful, be wary and be aware. There are no magic bullets that are guaranteed to make you big money.