Two related Ponzi scheme operations allegedly stole $30 million


RIP-OFF ALERT: When you hear words like “great opportunity,” “no risk,” “guaranteed return” and “secret strategy to make money,” what goes through your head? I hope it’s those warning sirens you always hear me play on the show.

The Denver Post reports 2 men are accused of stealing $30 million in separate Ponzi schemes after they started a mentor-apprentice criminal relationship and later split to run separate operations. Their schemes allegedly operated in 13 states with a common modus operandi.

Both men told people they would keep their money in an escrow account for use as leverage for lines of credit tied to various investments. It was pitched as a “no risk” opportunity that was supposed to be completely safe and guaranteed. The returns that were promised ranged from 30% to 900% annually!

It’s really disgusting what these guys did in the course of running their illegal schemes. One went to a man dying of cancer on his death bed and said the “investment” would ensure his widow would be financially secure for the rest of her life. Well, every last  penny was stolen and the widow is now broke.

As with all Ponzi schemes, the early investors are paid with money from the new investors. That gave the operations a look of legitimacy when they were in fact illegal.

One of the men used the illicit gains to buy a home for cash ($1 million) and to pay for cosmetic dental surgery ($35,000.) The other man spent $40,000 on a tropical vacation and bought a tricked-out Harley Davidson. Now the money’s gone. People’s lives are financially broken with no chance to recover. And the men are on the lam.  

Remember, words like “great opportunity,” “no risk,” “guaranteed return” and “secret strategy to make money” should really raise your suspicions when you hear them.

Finally, I want you to know that affinity fraud is a common way that many Ponzi schemes are spread. Affinity fraud is particularly effective because it hinges on dealing with people who are “like you” — hence the name. Human nature dictates that we let our guard down when we’re approached by someone of the same religion, race or profession with a “can’t lose” opportunity. Don’t let it happen to you!

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