It turns out that one of the alleged Ponzi schemers spent 11 out of the last 21 years in jail. These characters fabricated account statements that showed their high returns. They allegedly spent the victims money on jewelry, gifts and property. They also paid themselves millions of dollars in phony management fees.
Apparently, the Ponzi schemers are getting wise to the fact that they cannot post their investment offerings on a web site. These people allegedly told investors that these investments were based in Bermuda and audited annually by a firm based in Bermuda. They also guaranteed in writing that investor funds would be protected.
I'm sorry, but I do not feel sorry for these victims. Here are the immediate red flags that should have told any investor to stay far away and also to pick up the phone and report people like this to authorities.
- No background check was done on these so-called advisors. Without much effort, they could have easily discovered the criminal background of one of these advisors.
- The returns being touted were way out of line. Listen to me people. If someone is telling you how high their returns are, then they are more than likely crooks. If you are investing your money based on the returns of any advisor, then in my opinion, you are a making a big mistake.
- They claimed their strategy worked in both bull and bear markets. Pure unadulterated BS.
- These so-called funds were based in Bermuda. Are you kidding me?
- These funds were audited in Bermuda. Oh right. Bermuda is a hot bed of investment auditing activity. Here is a clue. Have you ever been to Bermuda and seen all the auditing busineses on every street corner?
- These funds were guaranteed in writing by the person selling them. Come on, man! People cannot be this dumb, can they?
- I have not seen the account statements, but I am certain that it would have been easy to see that they were fake.
- The offering documents were also made up apparently. This is another strong clue as to something being wrong. If it is not publicly traded, then this is an immediate red flag and a big red flag at that. If it is sold by an "offering document" then watch out!
Readers of my blog know better.