Posts Tagged ‘ponzi’

Schemer Buys Yacht, Hangs With Celebs, Is Jailed For 50 Years

Wednesday, June 16th, 2010

A prominent Florida lawyer is the latest example of what not to do as an investor, a business person, or a generally moral person.

  • 47 year-old Scott Rothstein was convicted on charges of money laundering, conspiracy to commit bank transfer fraud, and criminal conspiracy related to the financial system.
  • Rothstein managed to buy several houses, cars, and a yacht before he was caught. He also befriended celebrities and politicians, including Arnold Schwarzenegger.
  • Rothstein used new investors’ money to pay off earlier investors, and just like Bernie Madoff’s famous  Ponzi scheme, he left countless investors with immense losses.

Facts & Figures

  • Rothstein’s fraudulent investment scheme was worth more then $1 billion.
  • He was sentenced to 50 years in prison.
  • Rothstein forged the signatures of at least three federal judges.

Best Quote

“This rags-to-riches-to-jail saga is a humbling reminder of what can happen when greed and ambition run amok.”  - Wifredo Ferrer, U.S. Attorney

A Ponzi Scheme is…

Friday, May 15th, 2009

A Ponzi scheme (named after Charles Ponzi) is an investment scam that promises investors high returns that aren’t actually real profits. Instead, each time a new investor signs on with the money manager, he uses their new funds to pay the high ‘returns’ to his older clients. Ponzi schemes fall apart because the manager eventually will fail to find new clients or regulators catch on – it’s generally just a matter of when.