The Ponzi scheme, coined after the scheme dreamt up by a 1920’s Italian immigrant, later became a household term after the spectacular collapse of Bernard Madoff’s scheme in 2008 that duped thousands of victims out of billions of dollars. A Ponzi scheme is defined as the solicitation of investors with the promises of consistently stable and above-average returns with little or no risk but, in reality, uses the funds of new investors to pay returns to existing investors. The lifeblood of a Ponzi scheme is the ability to maintain the steady inflow of new investor funds to keep the scheme going, with the inevitable result that the scheme will collapse when the flow of incoming funds dries up.
Both the rate of newly-discovered Ponzi schemes and the resulting prison sentences handed down to the offenders are ahead of the pace for the full-year figures seen in 2013, suggesting that the schemes continue to be prevalent despite mounting government and regulatory prevention efforts. For more information and to view an interactive database of Ponzi schemes uncovered and prosecuted over the past six years, please visit Ponzitracker.com
Jordan Maglich is an attorney at Wiand Guerra King, P.L (http://www.wiandlaw.com). in Tampa, Florida. His practice includes complex commercial litigation, receiverships, white collar defense, and regulatory matters, with a focus on securities and financial services litigation. He represents securities broker/dealers, investment advisors, and their associated persons in federal and state court and in arbitration. Additionally, Jordan is currently part of the team that represents the court-appointed receiver nominated by the SEC in the Arthur Nadel $350 million Ponzi scheme. Jordan is also the founder and editor of Ponzitracker, a nationally-recognized blog that provides near-daily insight and analysis on the proliferation of Ponzi schemes. LexisNexis named Ponzitracker among the top twenty-five business law blogs in 2011, while the ABA Journal included Ponzitracker in its 2013 Blawg 100. Ponzitracker is also ranked among the top 50 legal blogs on the internet by legal website Avvo.
Jordan D. Maglich
Jordan D. Maglich