Defendants Accused Of Running $12 Million Ponzi Scheme
50 Reported Victims Include Many Seniors
Victims Lost Retirement Savings
Seniors may often be the targets in investment fraud schemes. Promoters and financial advisors touting fraudulent schemes may lure older investors with supposed “opportunities” promising high returns, seizing on senior anxiety about their need for income in the future, escalating inflation, and escalating care costs. The offered “opportunity” may be a risky, unregistered investment with little chance of living up to its hype or a complete fraud like a Ponzi scheme, where money collected from new investors is used to pay existing investors, and there really is no actual investment of funds at all. Unregistered investments sold to unqualified investors or fraudulent Ponzi schemes violate securities laws (see, e.g, Rule 10b-5 of the Securities Exchange Act, 17 C.F.R. 240.10b-5), and, when the victims are seniors, constitute financial elder abuse and may involve other crimes. See Penal Code § 368 (crime of financial elder abuse) and Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse). Evans Law Firm, Inc. can represent you if you lose money as a result of financial elder abuse in San Francisco or elsewhere in the San Francisco Bay Area or throughout California. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Alleged Ponzi Scheme Targeting Older Investors
In a recently reported case, a broker was sentenced to up to ten-and-a-half years in prison for his role in a $12 million Ponzi scheme that targeted nearly 50 victims—many of them seniors—between 2015 and 2017. The District Attorney in charge of the case said that beginning in January 2015, an elderly victim for whom defendant worked as a personal accountant and financial advisor agreed to invest approximately $385,000 into a company at defendant’s urging. Defendant allegedly assured his client that the investment was safe, had no risk, and the principal would be returned to her after a two-year waiting period with additional 4% interest, like a certificate of deposit. After waiting for two years, the victim requested the return of the money, but received a payment of only $26,699. Defendant then allegedly told the client her money had to be paid back in installments. After the defendant stopped responding to the victim’s inquiries, she went to the authorities,
The resulting investigation revealed that defendant and his co-conspirators victimized nearly 50 individuals including the woman reporting her suspicions and had scammed them out of a total of $12 million. Many of the victims were senior citizens who trusted the defendants with their retirement savings, according to the District Attorney prosecuting the case. Instead of investing the money in any business, the defendant allegedly used the money to fund his own enterprises, make personal purchases and paying other victims of the scheme. “This defendant preyed upon seniors and hard-working men and women, duping them out of their retirement savings and other finances, and using the money to fund business ventures and pay for his own personal expenses,” said the District Attorney.
Warning Signs Of Fraudulent Investment Schemes
Here are some of the classic “red flags” of fraudulent investment schemes include:
- High or overly consistent returns with little or no risk. Be especially suspicious of any “guaranteed” investment opportunity like the promise allegedly made in the reported case. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.
- Unregistered investments. Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company’s management, products, services, and finances.
- Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.
If you or a loved one has been the victim of a Ponzi scheme or other form of financial elder abuse in San Francisco 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.