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How do I know if I am involved in a Ponzi scheme?

On Behalf of | Nov 13, 2020 | Criminal Defense |

Ponzi schemes remain one of the most talked-about white-collar crimes in America. These schemes may seem obvious even to the untrained eye, but some organizers have found ways to mask the true setup of the company. Because of this, you may find yourself doing what you consider marketing work for a company, only to find yourself accused of a white-collar crime.

So, how do you know if the organization you hope to invest in or work with is a Ponzi scheme investment scam? Looking back at its origins may help you find the answers.

Secret systems

Secrecy remains a hallmark of Ponzi schemes. The Time magazine illustrates the role this plays by looking back to the original Ponzi scheme and the man who gave it his name. Organizers often refuse to share details of the investment strategies with you and may provide what seems like legitimate reasons for doing so, such as NDAs.

High returns

Business and investments have two main components: risk and reward. When the risk is high, rewards are also high. When risks are low, the same is true of rewards. When presented with investment opportunities that go contrary to this rule, chances are that it is a scam of some sort. The original Ponzi scheme promised a whopping 50% profit in 45 days and a 100% profit in double that time.

Golden opportunity

Humans have a natural fear of missing out, which has come into hyper-focus in the age of social media. Many Ponzi schemes prey on this instinct by making it appear exclusive in whose money it takes. Some may require special invitations or only accept dollar value investments over a certain amount.

It seems almost unbelievable that Ponzi schemes are only about a century old. What seems even more incredible is that they continue to successfully attract and trick even some of the most discerning Americans.