The following is a response to the article on dealing with ponzi schemers.
Of course we can all agree these people should be penalized and put in a place where no one can fall into their trap again. But the author of this letter isn’t realistic.
The families of many of these scam artists are usually far less guilty than make you make it sound.
I’m a private investor (of only my own money, not risking anyone else’s), and I can tell you that almost no one knows the details of any of my investments. I’m not playing any shtick at all, but my wife has no interest in hearing about, just living of its benefits. My siblings, parents, and kids haven’t got a clue of almost any of it. My point is simple: Why should the family have to take the unbelievable embarrassment because of a crooked relative?!?
THE SOLUTION:
I believe the only solution is to form an organization that has several divisions.
1 – A database. The database would be anyone who was every caught being involved in a scam, scheme, or other kind of financial games. There would be a risk level rating system that includes metrics based on their involvement, the level of sophistication, and other factors.
2 – Investment Reviews – A team of experienced investors who would be paid for their time to review investment opportunities, specifically focused on scheme scam detections. They would not be advising on deals, just looking for tell tale signs of scandals.
3 – Investigate – Deals / Investment opportunities flagged by the review team, would be heavily investigated. If found to be scandalous, they inform those involved that they either work on recovery plan together with the organization’s “Come Clean” program (see #4), or be reported to the FBI with their findings. Obviously they get added to the database too.
4 – Come Clean Program – For those that made the mistake of scamming others, there will be a very private program that would coach them through the admitting process. The idea would be that the coaches would try to help work on recovering as much as possible (even though much of it is gone), including liquidation of their valuables, and help them with the mediation process with their investors. Obviously this is very complex piece of the puzzle, but hopefully it will help minimize them hiding funds, and maximize paybacks to the investors. Additionally, they would need to agree to be monitored long term, and they would commit to never invest other’s money ever again.
5 – Educating the Public – Advertising and having online resources available to the public to get educated on how to recognize a bad investment.
6 – Hotel Programs – Perhaps it would be fit to a division for Hotel Program and holiday rental approvals. After enough programs going bust and enough double bookings, the team would be responsible for investigating and reviewing those businesses. If they are run legitimately, paid their vendors in the past, and have the appropriate insurance in place, they can receive an approved stamp in their ads.
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You are assuming that these people are intentionally scamming people which in my opinion is very rare. Most often the people believe what they are doing is legit and in many cases it is but something goes not as planned and the person keeps trying hard to make it work thinking he can salvage it which is possible but for whatever reason it goes past the point and no one ever knows for sure where the point is. So please don’t assume everyone that went bad in an investment is a scammer and please only invest what you can afford to lose and do your due diligence but don’t malign someone that got himself into trouble often unintentionally or because he unfortunately wasn’t well enough trained. It just is often unfortunate and not every investment goes well. That’s life.
Did you miss #4 about coming clean?
The biggest challenge in those cases is when they keep throwing good money after bad money, in attempt to recover or hide the losses. It’s embarrassing and scary for them. The concept of the Come Clean program is to give these guys a way to privately admit their losses and work with professionals to recover as much as possible, before it’s too late.
Oh cool. So ur saying the money I’m ( and others) owed I’m going to get from………….
Its crazy to me that people are fine with having scam artists living in the community. We should be publishing the names of those who hurt others in our community. Stop using the families of scam artists who have benefitted from ill-gotten gains as a shield to protect the evil ones innour community.
You are in all likelihood not getting it back.
Whether it was a scam or a deal gone bad, your money is lost and the pain is real.
That is the point of education and due diligence.
Please take the time to study what went wrong in the deal you were in, and allow others to learn from your mistakes.
Some of these are difficult to implement. I think the hotel program suggestion is actually something that can be done rather easily and it makes a lot of sense.
To avoid all schemes and scams. I have the 10 per cent rule. Anyone who offers more should be investigated thoroughly by any investor.
Exactly!
(Well even on less than 10%)
Delegating the due diligence on an investment to a syndicator is win to the fox guarding the hen house.
You assume that people who invest aren’t aware of the potential of a ponzi scheme and the risks they are taking. Honestly the hard truth is people are forced to invest because the live lavish ostentiaus lifestyles and its the only way to pay for that because they don’t earn it. Now that the covid gold mine dried up people are assuming more risk because that the only way to make big money now.
People really shouldn’t be investing as much. Earn an honest simple living by working in a middle class job and finished. Anyone smart will tell you to put your money in a diversified fund that returns an average of 9%. Obviously investments are needed and there are always some wealthy people. But its not for the layman. Your classic guy should stay out of this. I know this means you won’t earn as much and will have to live a simpler life but its the right thing to do.
In what world would this not turn into a massive grift?
“You must pass an exaggerator review fee otherwise we will flag your investment as high risk.”
“You must pay us tens of thousands of dollars for our so-called come clean program or we will report your failed investment to the FBI”
The only part of this that actually makes sense is educating the public.
The reality is, that many legitimate businesses that have failed are being called Ponzi schemes. And there are also a few Ponzi schemes that are being called Ponzi schemes.
Many of the people throwing mud would be hard for us to define a difference between a legitimate business that went under versus a Ponzi scheme.
Anytime, you invest money, you are taking a risk.
I have reviewed many deals I would advise people to stay away from, most people get emotionally connected to the deal though.
Who said anything about pay and fees???? It would be counter productive if we accepted money from those people.
It would be a non-profit funded either by government under public safety related grants, or a number of other impartial ways.
In regards to telling apart failed investments from people who scammed others, it seems like you haven’t actually seen the inside of any such cases. There are always signs once you dig a little.
Most people shouldn’t be investing in risky deals to begin with.
Telltale signs:
The Ponzi guy will live in a house much fancier than the neighbors vs a mansion in an exclusive neighborhood.
Crass. Crude. In a rush to make it. Pin the tail on the donkey Bar Mitzvah. Moonwalks and overly loud music for upsherin of confused 3 year old. (Non Jewish Ponzis same thing in their culture). First two buttons of dress shirt purposefully open. Yuk.
If this type wants to help you make fast cash, 7 red lights should flash everywhere.