Ponzi or Pyramid Schemes

Most people dream of becoming wealthy and realize that some form of investment may provide an opportunity to reach this goal. Unfortunately the drive for financial independence is often exploited by people who devise schemes to defraud people of their hard earned money. Ponzi and pyramid schemes are similar types of investment scams with some differences in their dynamics but both still result in the loss of large sums of money by those who have been convinced that entrusting their savings in a financial opportunity will yield large returns. Ponzi and Pyramid schemes are old forms of fraud that have found new light in the computer age by providing easy access to large numbers of people who can easily be enticed into fraudulent schemes. Those who lose money after becoming involved in these schemes can seek help by retaining the services of experienced Securities Lawyers who can file lawsuits to attempt to recover lost funds.

Have you or someone you now lost an investment due to a fraudulent ponzi or pyramid scheme? If so, contact one of our experienced securities lawyers in your area today!

Ponzi and Pyramid Schemes differ but may offer the following:

  • A Very High Yield
  • Quick Return on Investment
  • A “Once in a Lifetime Opportunity”
  • A Chance to "Get in on the Ground Floor”

A Ponzi Scheme takes its name from Charles Ponzi, an Italian immigrant living in Boston in the early 1900’s, who successfully convinced people to invest and reinvest millions of dollars with a promise to double their money in a 90 day period. This plan preys on people’s greed and requires no participation on the investor’s part. The initial investors are pleased because they actually receive returns from funds supplied by people who have invested subsequent to their investment. The scheme ultimately fails because people stop investing, the fraud is exposed or the principal leaves with most of the funds. Fundamentally people were convinced to invest in something that did not exist. Pyramid schemes differ from Ponzi schemes by requiring the direct participation of the investor. They promise large profits to investors based on the recruitment of others to a program that purports to market a product but in fact uses the product as away to bring people into the program as apposed to making money by selling the product to the public. A telltale sign of a possible pyramid scheme may be the requirement to purchase large quantities of product from those participating in the program. In a similar fashion, those who invest near the end of this form of fraud lose most of the money and the perpetrators of the fraud abscond with the majority of the money invested.

The internet has provided an inexpensive and efficient way for criminals to exploit people’s dreams of making large amounts of money in a short period of time. These old forms of fraud have been reintroduced to take advantage of the large audience that can be easily reached and convinced to participate in investments that result in loss as apposed to riches. Those who are looking to make investments must use common sense and investigate offers that make bold claims of wealth before participating in any get rich quick plans. In the event that a person has been fooled by the ever increasing sophistication of an old form of fraud, they can seek to address their loss through the legal system. Retaining an experienced and knowledgeable Securities Lawyer can help to regain losses resulting form this deceit.

Have you or someone you now lost an investment due to a fraudulent ponzi or pyramid scheme? If so, contact one of our experienced securities lawyers in your area today!

Updated: LW

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Have you or someone you now lost an investment due to a fradulent ponzi or pyramid scheme? If so, contact one of our experienced securities lawyers in your area today!

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