Elder Law Lawyer
A Ponzi Scheme is a fraudulent investment scheme where a brokerage firm offers investments to clients that promises high rates of return and “little to no risk” for the client. The broker then generates money for older investors by gaining new investors. It is closely related to a Pyramid Scheme, but instead involves brokerage firms and investors, or potential victims.
This cycle of destructive operation is why Ponzi Schemes are illegal, and it is unfortunate when average citizens get pulled into a Ponzi Scheme and lose money. An elder law lawyer can provide you more information about Ponzi Schemes and fraud. The only people gaining money in Ponzi Schemes are the very first investors, and the people scammed into investing their own personal money later in the scheme are liable to lose much, if not all, of their investment.
At Kaplan Law Practice, we believe that those that fall victim to Ponzi Schemes are not at fault for their losses, and we will do everything in our power to advise victims on the legal steps necessary to take in order to receive rightful compensation. We are here to help any victims of Ponzi Schemes exercise any rights they may have to compensation and justice.
Steps To Take After Falling Victim To a Ponzi Scheme
Ponzi Schemes typically follow the same regiment: the broker will promise the client an investment opportunity that he or she cannot refuse. The investment will involve high rates of return and “no risk” for the investor. What the client, or investor, does not know is that the people at the lower end of the investment, or the later investors, will likely lose their investment. Eventually there is not enough money to go around to fund the fraudulent investment scheme. The basic concept of a Ponzi Scheme is take money from Person A to pay Person B to pay Person C. Then, to pay Person A, they must find another investor, and the cataclysmic loop continues – until it falls apart. Most Ponzi Schemes eventually collapse, leaving the later investors with sometimes significant financial loss.
Fortunately, there are steps that you can take once you have determined that you have fallen victim to a Ponzi Scheme.
Do not contact your broker, as anything you say to him or her may be used against you in court, and may hinder your chances of getting reimbursed for money lost in the fraudulent scheme. They may try to offer you some sort of compensation, but do not answer if they attempt to contact you.
Gather any information you can regarding the scheme. This information is crucial for the success of a trial pertaining to Ponzi Scheme fraud, as it may be used as evidence in court. Important information may include:
- Checks from the broker.
- Paperwork regarding the investment.
- Any correspondence with the broker.
- Any other records pertaining to the fraudulent investment or returns.
Contact a lawyer experienced in fraudulent securities immediately.
The sooner you contact a lawyer, the better your chances are of regaining any losses incurred from the Ponzi Scheme.