Aug 30, 2019 by |

San Francisco and California Securities and Financial Elder Abuse Attorneys: Ponzi Schemes and the Elderly

ATTORNEY NEWSLETTER

Ponzi Schemes Increasingly Target Older Investors

Older people have more money to invest. After years of savings and with the children educated and on their own, seniors should take comfort in a nest egg for future years. But unscrupulous brokers, insurance agents and stock promoters target seniors for just the same reason – there’s money sitting there.  Increasingly, we see stories of Ponzi schemes and other orchestrated fraud luring senior investors. 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. The California securities fraud attorneys at 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 here in California.  If you have, call our lawyers today at (415)441-8669. 

The SEC has recently shut down two large Ponzi schemes that targeted elderly investors:

  • In one matter (called “Lifepay”), two defendants conducted an alleged Ponzi scheme that targeted seniors’ retirement savings. The SEC alleges that defendants offered investors unregistered promissory notes, telling them that their money would be used for real estate investments that would generate high returns. To keep the scam going, these defendants allegedly used new investors’ money to pay earlier investors and convinced investors to rollover their investments into new promissory notes for larger amounts. According to the SEC, these defendants only invested a small portion of investors’ money in real estate and stole roughly $1.3 million to pay for personal expenses.
  • In a case involving Woodbridge Securities, defendants allegedly conducted a $1.2 billion Ponzi scheme in which thousands of people invested their retirement savings. The SEC alleges that the defendants employed hundreds of sales agents to advertise through television, radio, newspaper, cold calls, social media, websites, seminars, and in-person presentations. According to the complaint, although defendants claimed that investors would get paid revenue from high-interest loans to third parties, the defendants, in reality, used money from new investors to pay returns owed to existing investors. One defendant allegedly used $21 million of investors’ money for his own extravagant personal expenditures.

Before investing, check for classic warning signs of a Ponzi scheme:

  1. 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.
  2. 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 the SEC’s website to check whether the person is licensed and registered. Also do a broker check at https://brokercheck.finra.org/.
  3. Overly Consistent Returns. Investment values tend to fluctuate over time. Be skeptical of an investment that generates steady positive returns regardless of market conditions.

Contact Us

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 contact Ingrid M. Evans and the other California whistleblower attorneys at Evans Law Firm at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys also have experience with complex financial contracts and large insurance companies. We can help guide your case through filing a complaint, investigation and discovery through trial or an equitable settlement.  We also handle cases involving physical and financial elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

[1] Evans Law Firm, Inc. was not involved in either of the reported cases in any way.

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