Comments on: How to unravel a Ponzi scheme: Follow the money

By: Marshall

Marshall — Mon, 06 Jun 2011 07:22:25 +0000

Many of the comments are spot on and generally there should be no sympathy for the rich wanting to get even richer easily. But spare a thought for those who get duped by similarly callous conmen operating seemingly legitimate schemes. It is for this reason that the law has to deal HARSHLY with all scams, even if the “vicitms” are supposedly wealthy and foolish and gullible.

By: Ga Man Charged With Running $15 Million Forex Ponzi Scheme -CFTC (Nasdaq)

Ga Man Charged With Running $15 Million Forex Ponzi Scheme -CFTC (Nasdaq) — Thu, 09 Jul 2009 22:35:18 +0000

[...] Thought Leader » Michael Trapido » How to unravel a Ponzi scheme … [...]

By: chris2

chris2 — Wed, 17 Jun 2009 15:36:31 +0000

Mad(e)of(f) with the money!? Not me, says Mr T. Who then, begs the question… How can billions in actual cash simply disappear (we know how it happens with equities, but cash?). I guess it’s quite important to find out. The Soet Poppie scenario is worth checking out.

By: anton kleinschmidt

anton kleinschmidt — Wed, 17 Jun 2009 13:39:07 +0000

pete ess…well said. There MAY be people / “investors” who have benefitted from this (and could be prosecuted as a result) who:

1/ Made profits under the scheme and failed to inform SARS through the medium of their tax returns.
2 / Used the scheme to move large sums of money offshore using transfer pricing techniques and in doing so circumvented exhange control regulations.

If such “investors” exist then these are the people who will attract the real attention from the investigation team. This will also explain why the authorities are jumping around like scalded cats. This has the potential for significant immediate and long term losses to the fiscus because R15billion is serious money.

Think about this scheme in terms of the large amounts involved and then think about the tax implications and the loss of money flowing out of the country which will not generate taxable income for SA in future. There is a good reason why the ANC have retained the exchange control regulations which are a deplorable relic of the apartheid era.

By: pete ess

pete ess — Tue, 16 Jun 2009 17:17:01 +0000

I think Soet Poppie is on to something:
1. Whoops, sorry guys, I lost all your money;
2. Lots of crying and gnashing of teeth (wink, wink);
3. The heat dies down (no real efforts are made to prosecute);
4. A few key officials suddenly upgrade their cars and homes;
5. We meet again in Aussie and divide the spoils (or more subtle methods like the kids in Aussie get their bond paid off, buy a new business, etc);

What else explains people with R50m and R100m to play with getting duped so easily?

By: Michel

Michel — Tue, 16 Jun 2009 08:34:21 +0000

From what I’ve read in the press, all of these “losers” (in more ways than one!) were well heeled persons, who no doubt should know that there is no such thing as a quick buck. I fail to have sympathy for them, as the majority were all rich already, making a quick buck on system even I know is dubious – I mean 20-25% return after a month? What were they smoking?

By: Alan

Alan — Tue, 16 Jun 2009 05:39:48 +0000

I’m not sure that I agree with you that the state needs to get involved. These ínvestors’were for the most part rich, greedy and gullible. These were not little old ladies or pension funds doing the investments. These were already wealthy people who were blinded by their own greed. They knew it sounded too good to be true and they chose to ignore the obvious due dilligence questions that should have been asked. Why should the government get involved, other than through the normal criminal prosecution channels?

By: Lara Johnstone

Lara Johnstone — Mon, 15 Jun 2009 20:25:49 +0000

Ponzi Investment Scheme: an investment scheme that amounts to an expanding game of musical chairs, in which one must buy a chair for someone else in order to join the game, the price of a chair is ever rising (so that eventually, it will be unaffordable), the last people to join the game never get a chair, the number of players always far exceeds the number chairs, and none of the players create anything of worth by way of participation.

Ponzi Schemes rely upon, among others, exponential growth; and they collapse, when they run out of investor resources.

This is inevitable, because their investor resource requirement relies on exponential growth (ever increasing number of investors); in an environment where such investors are finite.

They will reach thier finite termination point, quicker (Madoff/Tannenbaum) or slower (Social Security/Pension Plans/Life INsurance), depending on their promised rate of return on the ‘ponzi investment’; which determines the finite nature of their pool of ‘investor resource’.

For example: large return, riskier greedier investors, with larger investment amounts; therefore a finite pool of less millionaire investors.

Social Security’s ‘investor pool reaches its limit, when ecological carrying capacity reaches its limit (about now, or very soon, if not already).

As for the financial crisis, that is a result of end of cheap oil’s effect on fiat currency, fractional reserve debt based ‘economic growth’ banking…

But don’t expect any talking head to tell you this, in FT, or Maverick!!

By: the critter

the critter — Mon, 15 Jun 2009 18:55:40 +0000

One word: GREED! Sorry guys, no sympathy from me. Remember the old ditum: Caveat Emptor! Let the buyer beware.

By: Hugh Robinson

Hugh Robinson — Mon, 15 Jun 2009 18:17:43 +0000

sorry that should have been SARS