Attorney General Bonta Brings Charges
15 Individuals Charged With Ponzi Scheme Targeting Elderly
Elderly Investors Allegedly Defrauded Out Of $5 Million
Statistics show that seniors are more vulnerable to investment fraud than younger investors. When they are, the actions of the wrongdoer also constitute financial elder abuse in addition to investment or securities. The abuse ranges from one-off fraud against individual seniors to fraud that targets seniors as a whole. One such fraud targeting multiple investors at a time is a so-called Ponzi scheme. In a Ponzi scheme, fraudsters use money they collect from new investors to pay existing investors. What appears to be a return on your investment is actually money from another investor who has been swindled. These schemes often target the elderly. Evans Law Firm, Inc. can represent you if you lose money in a Ponzi scheme or as the result of annuity fraud, insider trading, securities misrepresentations or nondisclosures, accounting fraud or any other type of securities fraud or financial elder abuse here in California. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
California Attorney General Brings Charges
On May 21, 2021, California Attorney General Rob Bonta announced charges against 15 individuals for allegedly conspiring to defraud at least 30 known elderly victims out of their retirement savings through an international Ponzi scheme. Targeting elderly Filipino victims, the fraudulent scheme aimed to solicit millions in investments for the construction of a resort in the Philippines, a resort which has yet to open or generate income. The defendants are being charged on an array of felony counts including grand theft, financial elder abuse, sale of unqualified security, communications containing untrue statements and omissions of material facts, and use of a device, scheme, or artifice to defraud in the offer, purchase, or sale of a security. “Senior citizens were the direct targets of this fraudulent, international investment scheme. Our most vulnerable loved ones should never be deceived and defrauded of their hard-earned retirement money,” said Attorney General Bonta. “Those who take part in the financial abuse of elders must be held accountable for their actions.”
According to the California Department of Justice (DOJ) charges, since late 2015 the defendants used their positions as financial advisors to convince elderly victims into investing in the development of the supposed resort property. Through group sales presentations, the defendants made gross misrepresentations to entice investments, according to the charges. For instance, the defendants allegedly made false claims that Wyndham Resorts, a well-known hotel company, had committed to managing the resort. Victims were also allegedly told that their investments would go toward hotel construction, when instead, the money was primarily used toward paying two of the defendants a minimum of $10,000 a month, commissions for those who brought in new investors, and other multi-level marketing schemes unrelated to the project being sold. The suspects also allegedly failed to follow through on promises made to their investors. Investors were allegedly promised “interest payments” on their investment, but did not know the promised interest payments were actually derived from other victims’ investments and not the resort itself, according to the charges. In most cases, the suspects failed to deliver the interest payments completely, according to the DOJ. The amount taken from the elderly investors is estimated by the government to be over $5 million.
Spotting A Ponzi Scheme
Before investing in any new venture, check for classic warning signs of a Ponzi scheme:
- Promises of High Returns with Little or No Risk. Guaranteed high investment returns are the hallmark of a Ponzi scheme. Every investment has risk, and the potential for high returns usually comes with high risk. If it sounds too good to be true, it probably is.
- Unlicensed and Unregistered Sellers. Most Ponzi schemes involve individuals or firms that are not licensed or registered. Even if an investment professional comes across as likeable or trustworthy, use the free search tool on gov to check whether the person is licensed and registered. Also do a broker check at BrokerCheck – Find a broker, investment or financial advisor (finra.org).
- Overly Consistent Returns. Investment values tend to fluctuate over time. Be skeptical of an investment that generates steady positive returns regardless of market conditions. That was one of the hallmarks of Bernie’s Madoff’s huge Ponzi scheme.
If you or a loved one has been the victim of a Ponzi scheme or other form of financial elder abuse by an insurance agent, stock broker, investment advisor, promoter or other person here in Los Angeles, Orange County or elsewhere in California contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).
 Evans Law Firm, Inc. was not involved in the case in any way.