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Old 11-28-2020, 11:16 AM   #41
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I believe that it comes down to one or a combination of greed, stupidity, and abject naivety.

Expecting incredible above average guaranteed financial returns from a rock solid safe investment with your principal 'guaranteed' only means one thing to me. Ponzi.

it is not a head scratcher. DW's dopey cousin probably still has a big box of Iraqi dinars that she purchased a few years ago. DW advised her at the time it was a scam and to check the internet.

But no, she bought it because someone at her church said it was a great investment and her son did a lot of research. He probably just asked others at that same church what they thought. SO they paid $3K, which they probably could not afford, for a box of worthless paper on the advice of a know nothing friend in the expectation that it would turn into several hundred thousand a year later.

I guess they could use it as wallpaper, or shred it up for insulation of some sort.

Go figure. You cannot fix stupid.
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Old 11-28-2020, 11:51 AM   #42
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Originally Posted by Rianne View Post
Did Bernie Madoff steal or lie about returns and that he was investing with amazing returns? Stealing is different than misleading people/banks/charities/investment companies into bad investments. I looked at the list of investors on Wikipedia and they look like financially savvy investors. Stealing is taking something without permission. All these entities gave money to Madoff with permission. The ponzi part is illegal but aren't some pyramid scheme companies like ponzi schemes?

....
Everyone should follow "due diligence" practices. Talk about complicated! If the SEC made huge errors in figuring out Madoff's scam, how could an investor?

....
Bernie lied.
He took their money and didn't do what they thought he was doing (investing), so he Stole their money, Committed Fraud and Theft.

He spent the peoples money instead of investing it. He printed out fake documents to substantiate his claims of high earnings.
In his office, staff (except few in on the deal, mostly family) were not allowed to enter the 17th floor offices. This was to hide the printing of fake performance returns.
Bernie lied to SEC, along with lying to all the investors.
Bernie did not invest in bad investments, he didn't invest hardly at all.
One of his son's committed suicide from being dragged into his Father's crimes.
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Old 11-28-2020, 12:04 PM   #43
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Bernie lied.
He took their money and didn't do what they thought he was doing
Sounds familiar.
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Old 11-28-2020, 01:21 PM   #44
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Interesting thread. My wife and I know someone who was recently charged and awaiting trial for stealing $4.7 million in a Ponzi scheme. He was formerly a real estate attorney, but then started his own business of buying and flipping using investors money then returning to them their principal with excellent interest rates (10-12%)...he just deposited the money, then used the next investor's money to pay off the previous investors.

My wife and I actually met with him about 6 years ago and it did seem suspicious to us and I never followed up with him. The latest on him is that he was a flight risk to South America so he is sitting in jail and had to surrender his passport. He also got debarred earlier this year.
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Old 11-28-2020, 02:18 PM   #45
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Anyone see The Polka King movie? Jan Lewan pulled off a classic ponzi scheme for a while.
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Old 11-28-2020, 02:25 PM   #46
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The recent novel The Glass Hotel by Emily St. John Mandel offers an interesting take on the Madoff scam. The critics really liked it too.
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Old 11-28-2020, 03:07 PM   #47
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Years ago I worked as an Investigator for the USDL. We audited compliance with the wage provisions of the Service Contracts Act. Part of the process was to interview employees. During an audit, one of my peers couldn't find several employees listed on the payroll. As this was a cost-plus contract that rang a lot of bells and the Contract Officer was contacted. The bookkeeper was issuing payroll checks and depositing them in her personal account. The employer was notified and the bookkeeper was arrested for defrauding the US. I believe that the employer had to make the contracting agency whole and likely was bankrupted.

I live in a housing co-operative. A few years ago a couple made an offer on a unit. They submitted their financial statement on a thumb drive insisting that only the Treasurer review it. It is the practice that all members of the Board review prospective buyer's submissions. The application was 'unique' prompting a little poking around on Google. We discovered that the husband had changed his name and that under the old name members of his congregation sued him for improper financial activity associated with the congregation's assets. We insisted that he submit his financial statement on paper. He withdrew his application.
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Old 11-28-2020, 06:33 PM   #48
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We had a local office of Fair Finance. I remember seeing ads in the very local paper for their high interest CDs. Always higher than the banks and definitely not FDIC.

https://www.sec.gov/news/press/2011/2011-67.htm


This one was on American Greed also. As I recall Fair Finance was a legit local finance company that was bought out by a scammer.

https://www.imdb.com/title/tt6806098/
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Old 11-29-2020, 01:12 PM   #49
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We had one in my former home town. He took about $25m from relatives, friends, associates. Over a period of many years.

Many complained to our Investment Regulator after the scandal broke.

The thing is NOT ONE of his customers over all those years ever bothered to call the Investment Reg. office to see if he was licensed. If they had, they would have discovered that he was not AND he would have been immediately investigated and closed down by the authority. They only called after he disappeared and it was apparent that something was wrong.

Exact same thing happens regularly where we currently live. Many people do more research when they are buying a new fridge or tv than they do when investing their life savings. Never could figure this out.

We have a rule. NEVER invest with friends, business associates, and especially not with relatives.
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Old 11-29-2020, 06:33 PM   #50
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...

We have a rule. NEVER invest with friends, business associates, and especially not with relatives.
I don't have this rule.
My parents best friends, so close he was my "uncle" died and the investment evaporated.
I am as suspicious of friends as I am of strangers for investments.
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Old 11-29-2020, 10:07 PM   #51
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And a 13 year debarment. Why not lifetime?

Up to 20 years. I'd bet it will be less than 5.
Hmm, If you look him up on Brokercheck, it looks to me like he's
permanently barred?

https://brokercheck.finra.org/indivi...ummary/2788055
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Old 11-30-2020, 06:20 AM   #52
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Hmm, If you look him up on Brokercheck, it looks to me like he's
permanently barred?

https://brokercheck.finra.org/indivi...ummary/2788055
Good! I guess the "quality writing" of the article was wrong. Imagine that!
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Old 11-30-2020, 08:43 AM   #53
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This guy from Atlanta has been on the run since the end of October. The scary thing about this is that he had a show on the #1 radio station in the Atlanta metropolitan area...which I would guess meant he had a LOT of listeners.

Quote:
An Atlanta-area advisor who went missing after allegedly scamming about 100 investors as part of a Ponzi scheme involving the sale of illegal promissory notes is now facing a class-action lawsuit.

The suit was filed Wednesday against Christopher W. Burns, 37, of Berkeley Lake, Georgia, and his various business entities in U.S. District Court for the Northern District of Georgia in Atlanta.
Matson Money, an Arizona RIA that Burns allegedly referred his clients to, was also named as a defendant in the complaint for its alleged role as a financial co-advisor with Burns. However, the firm “had absolutely no knowledge of, nor did we profit from Mr. Burns’ outrageous scam,” Mark Matson, its CEO and founder, said in a statement provided to ThinkAdvisor on Friday.

The firm was “shocked and deeply saddened” to hear that Burns had “stolen money from his clients through a fraudulent and deceitful investment scheme,” and was “outraged on behalf of the individuals and families who trusted him to act in their best interests,” Matson said.
Burns “invested a portion of his client capital into our equity and fixed income funds from 2016 to 2020 [and] we were not aware that at the same time, Mr. Burns was apparently luring his clients to invest their free cash in fraudulent promissory notes in a local peer-to-peer lending scheme,” Matson added.

The FBI and U.S. Attorney’s Office for the Northern District of Georgia announced Monday that Burns was charged with mail fraud and there was a warrant for his arrest because his whereabouts were unknown.
https://www.wsbtv.com/news/local/gwi...J2JEVQXCGVMF4/

https://www.thinkadvisor.com/2020/10...s-action-suit/

https://dynamicmoney.com/chris-burns-show
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Old 11-30-2020, 01:06 PM   #54
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We have had a number of Ponzi runners with radio shows. One had show on local Christian radio station. It was a disaster for those who swallowed the bait- hook, line, and sinker.

In all cases it was the same. These people actually purchased time and hour or two each week from the radio station in order to run their show. . They operated their own financial advice/discussion show and of course endorsed the ads that ran during their purchased air time.

Many of the victims appeared to think that these crooks were endorsed by the radio station. Why that would be such a great endorsement is beyond me...even if they were legit. There was always a disclaimer but who pays attention to that?

Some amateur sports organization in our area are having a challenge raising money from parents. There have been too many cases of treasures stealing funds. These groups run with volunteers and the is often very little financial oversight or proper oversight on expenditures.
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Old 11-30-2020, 01:59 PM   #55
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In all cases it was the same. These people actually purchased time and hour or two each week from the radio station in order to run their show. . They operated their own financial advice/discussion show and of course endorsed the ads that ran during their purchased air time.
Yep. People miss the whispered disclaimer at the beginning: "The following program is a paid advertisement and does not reflect an endorsement by WDUM, its owners or affiliates."

We have them too. They fill up Saturday and Sunday. Each respective show argues that the other guys' shows are wrong.

I listened one time and now just turn on music while shredding the offers of free steak that come in the mail from the same outfits.
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Old 12-01-2020, 09:36 AM   #56
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- CEO says he'd love to promote departee to VP status but his wife would be an embarrasment.

- Scene switch: 'Stripper' removes wig and flashy attire, and husband says "That was close, I can't afford to be moved from this job until I've embezzled enough money so that we can make a run for it".
You should never underestimate the street smarts of executive scammers.
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Old 12-01-2020, 10:55 AM   #57
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Yep. People miss the whispered disclaimer at the beginning: "The following program is a paid advertisement and does not reflect an endorsement by WDUM, its owners or affiliates."

....
Similar to how AARP takes $$$ to rent out their "AARP" name.

I've been with REALLY old folks, and they gravitate towards the AARP designated sales pitch, because it says: "AARP".
They don't get that AARP does not evaluate the truth/honest/goodness of what is being shilled.
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Old 12-01-2020, 11:34 AM   #58
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A 'BBB" designation is not much better than an AARP or CARP endorsement.

A $1500 suit, a $200 bottle of wine, or shiny car only means that someone was able to obtain it on credit. Same for a nice smile and a firm handshake. All meaningless.

Not that they are a successful financial adviser.

'Trust but Verify"
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Old 12-01-2020, 06:19 PM   #59
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Anyone heard of General Development Corporation (GDC)?
I was a agent for them for a (thankfully) short time.
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Old 12-01-2020, 06:19 PM   #60
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We have a rule. NEVER invest with friends, business associates, and especially not with relatives.
I've mentioned before that I have a relative (now deceased) who was involved in the creation of a closed corp many years ago to take advantage of an investment opportunity. This wealthy relative supplied much of the initial financial capital but (not being too bright - family money) didn't supply any intellectual capital; acquaintances and friends supplied the rest. It turned into a disaster, with multiple lawsuits among participants .

I only know about this investment because another relative inherited this toxic asset and all of the headaches associated with it, including being sued (if I had known then what I know now, I would have recommended she disclaim this "asset"). After much effort we managed to disentangle her from this investment, but the anxiety associated with being sued, etc. lowered her quality of life for a couple of years. Some 30 years later, the now-elderly folks who originally invested in this toxic asset are still trying to wrap it up. What a mess!

The sad fact is that it's sometimes impossible to distinguish incompetence from evil, and it's not clear that the folks who created the closed corp intended from the beginning to defraud my now-deceased relative, although in retrospect it sure looks that way.

My participation in cleaning up this mess was educational. I don't circulate among the 1% like my relative, but I imagine that investment opportunities are plentiful for that crowd. In 99.9% of cases, the correct answer when offered an opportunity to invest is probably NO!
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