Victim of a Ponzi Scheme?

Let a Miami Litigation Attorney Help

Picture of Pyramid Scheme ExposedA Ponzi scheme is a type of investment fraud in which the scammer never actually invests the investors’ money; rather, the fraudster pays off old investors with new investments, keeping a substantial portion of the funds for his or her own benefit. Ponzi schemes attract investors by promising high returns with little risk, and they typically collapse when recruiting new investors becomes difficult or a large number of investors wish to cash out. Every Ponzi scheme is a house of cards that will inevitably fall, and when it does, Matthew Seth Sarelson, P.A. can help victims deal with the aftermath.

Ponzi Schemes in South Florida

Ponzi schemes are a persistent form of securities fraud in South Florida, and Matthew Seth Sarelson, P.A., a litigation attorney well-versed in the laws surrounding securities fraud, is ready to fight for Ponzi scheme victims’ rights and recovery. In 2008, a Ponzi scheme that a University of Miami (UM) business school graduate carried out using UM facilities collapsed, costing victims an estimated $30 million. In October 2009, a Florida court sentenced Michael Riolo of Boca Raton to 24 years for a $44 million Ponzi scheme he started in 1999. And in June 2010, Scott Rothstein, a former Florida lawyer who sold investors stakes in fabricated legal settlements, was sentenced to 50 years for his $1.2 billion Ponzi scheme.

In December 2008, the financial world was stunned by the arrest of Bernie Madoff, a former chairman of the NASDAQ who perpetrated a decades-long, $50 billion Ponzi scheme. A significant portion of the Madoff scheme victims hailed from Palm Beach County and surrounding areas, including the Picower Foundation, which was one of the nation’s leading philanthropic organizations until it was forced to close because of the Madoff Ponzi scheme. Investors who suspect they are caught in a Ponzi scheme or have concerns that a potential investment may be part of such a scheme should consult experienced Miami litigation lawyer Matthew Seth Sarelson, P.A., a strong advocate for defrauded investors.

Do Not Become a Victim: Avoiding Ponzi Schemes

Ponzi schemes often have telltale signs that savvy investors can spot:

  • Returns that are too consistent
  • High returns without correspondingly high risk
  • Investments sold through atypical channels, such as spam email or cold calling
  • Situations where the roles of custodian and manager are merged
  • Pitches involving exotic or obscure products

Investors should always check the credentials of financial advisors and make sure an investment company is under regulation. Retirees should be especially vigilant when investing, given that a study by the North American Securities Administrators Association showed that nearly half of all investor complaints are from seniors.

Even the most perceptive and well-informed investor may find himself or herself caught in a Ponzi scheme, as the swindlers behind these fraudulent enterprises often cloak themselves in false credibility and take elaborate steps to maintain their ruse. When investors fall victim to a Ponzi scheme, they should contact an aggressive Miami litigation attorney. The securities litigation experience of Matthew Seth Sarelson, P.A. continues to be a strong asset to victims seeking to recover Ponzi scheme losses.

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