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A Ponzi scheme is a deceptive investment maneuver that pays returns to its investors from the money paid by subsequent investors, rather than from profit earned by an organization. Brokers and their firms can be held liable for their actions and their in-actions, related to Ponzi and Pyramid schemes.

The law requires brokers and their securities firms to make full disclosure to investors of the risks inherent in the investments they are recommending.

Ponzi Schemes often do not include these representations.

As an investor, it is crucial to research and check out the credentials and background of the person through which you are investing. The following article reinforces the need to do so.

SEC Shuts Down $85 Million Ponzi Scheme and Obtains Asset Freeze
Washington D.C., May 1, 2018 —
The Securities and Exchange Commission today announced the unsealing of fraud charges against a Mississippi company and its principal who allegedly bilked at least 150 investors in an $85 million Ponzi scheme. The defendants agreed to permanent injunctions, an asset freeze, and expedited discovery.
The SEC’s complaint alleges that Arthur Lamar Adams lied to investors by telling them that their money would be used by his company, Madison Timber Properties, LLC, to secure and harvest timber from various land owners located in Alabama, Florida, and Mississippi, and promised annual returns of 12-15%. But Madison Timber never obtained any harvesting rights. Instead, Adams allegedly forged deeds and cutting agreements as well as documents purportedly reflecting the value of the timber on the land. Adams also allegedly paid early investors with later investors’ funds and convinced investors to roll over their investments. According to the complaint, Adams used investors’ money for personal expenses and to develop an unrelated real estate project. Read the full article here

If you believe that you may have been the victim of a real estate Ponzi Scheme, securities fraud, investment fraud or stockbroker negligence then it is important to contact an experienced investment fraud attorney.

The Law Offices of Peter C. Rageas, P.C. is experience and have helped countless individuals recover from investment losses. Call 313-334-7767 today for your free case evaluation.