Generally, the fraudsters have worked in the industry in which they’ve hatched their scheme, so they have a deep knowledge of what they’re doing. Lawyers, accountants and registered brokers can often be found at the helm, but Ms. Springer has also uncovered schemes involving agricultural supplies, worm farms and a “whale whisperer,” who promoted a music business from the sounds of whales and dolphins.
“In all Ponzi schemes, the perpetrator was very pleasant, someone you’d want to be friends with,” she said.
So how do you tell which investments are cause for concern and which safeguards to use to ward them off?
Topics in the news are ripe for Ponzi schemes. At the moment, those could be cryptocurrency, artificial intelligence and research into Covid-19 treatments.
“Fraud feeds on uncertainty, financial distress, upheaval and times of change,” said Ms. Phelps, the lawyer. “That describes exactly the time we’re living in. Fraudsters take the latest news and exploit people.”
She has already seen Ponzi schemes around companies supposedly developing a cure or treatment. “Beware of promises,” Ms. Phelps said.
There are several tried and true ways to avoid being swindled, though they’re also a bit time-consuming. That is why Ponzi victims skip the due diligence and trust their friend who knows a guy who says he’s a great investor.
Article source: https://www.nytimes.com/2021/02/05/your-money/ponzi-schemes-stock-market.html
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