Tag Archives: florida

How Prevalent Are Ponzi Schemes?

Ponzi schemes are difficult to unravel, not unlike a billion-piece puzzle.

Ponzi schemes have been in the news recently, but not for bad reasons.  Specifically, proposed and confirmed settlements of three big ponzi schemers have been reached with some of their victims.  The victims of Earl Jones, a convicted Québécois schemer who swindled an estimated $40 million from 150 people, have settled in a class action suit with his bank for about $18 million.  The late Kenneth Wayne McLeod, whose Capital Analysts Inc. group stole $34 million mostly from federal agents and policemen, has proposed settlement for an undisclosed amount with 140 investors (though not without some suspicion, as noted in that article).  And perhaps biggest of all, though not Madoff-big, is Scott Rothstein, the big-mouthed Florida lawyer whose Charlie-Sheen-esque ramblings during a deposition were something of a pop culture phenomenon last year.  He made off with $1.2 billion of investors’ money, with his bank recently settling for $170 million for its part in the scheme.

While reading this, I became curious as to how prevalent these Ponzi schemes are.  Presumably after Bernie Madoff made headlines with his $65 billion scheme, duping even high-profile celebrities and financial leaders, people would be more aware of what they were doing with their money.  However, Ponzi schemers are just as active as ever.  This list on Wikipedia shows 32 caught Ponzi schemers in the last decade alone — some with schemes going back ten years or more.  Just think about how many are perpetrating a fraud right now.

Read on to learn about common investment fraud tactics after the jump.

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Two Recent Negligence Settlements from Public Service Mistakes

Justice

Everyone makes mistakes, even those whose sworn mission is to protect and serve or to do no harm.  Two settlements were announced this week that demonstrate exactly that.  In Brooklyn, New York, a woman whose doctors’ negligence resulted in the amputation of her arms and legs was awarded $17.1 million.  In Tallahassee, Florida, the negligence of the police concerning a woman who was murdered during a botched drug sting operation led to a $2.4 million settlement for her family.  In both these cases, the professionals in charge, the ones whose judgement is awarded a certain amount of trust, made bad decisions that led to unfortunate consequences.  Everyone makes mistakes, but the law in general isn’t there to prevent that.  Rather, the law and the court system are intended to pursue justice among an otherwise ambivalent world.  And so, the silver lining: in Florida, a new regulation, called “Rachel’s Law” after the woman in question, was enacted to train policemen better and set up new guidelines in the use of criminal informants.

Further Reading: