Loading ...Florida’s Gulf Coast: Hotbed of Ponzi Schemes?
Earlier this month, we wrote about the federal indictment of Beau Diamond of Sarasota for wire fraud and money laundering. Federal prosecutors allege that Diamond ran an elaborate Ponzi scheme involving foreign currency (Forex) trading.
Although the national headlines have been dominated by the Bernie Madoff Ponzi scheme stories, Southwest Florida seems to have more than its fair share of these fraudulent stories.
Diamond, Arthur G. Nadel and John and Marian Morgan all face federal charges for allegedly fraudulent investment schemes based out of Southwest Florida. State investigators say there are likely dozens more schemes in various stages of investigation in Florida.
It seems that Southwest Florida’s laid-back lifestyle, its high per-capita wealth and its relative old age make the area attractive to financial scammers. Older residents, living on fixed incomes, often become vulnerable to the promises made by Ponzi schemers.
Nearly 2,500 investors and a half-billion dollars are estimated to be involved in the suspected Ponzi schemes based in Southwest Florida. In a Ponzi scheme, investors are paid “profits” with their own money or that of other investors who got in after them.
The deals inevitably collapse when the influx of money stops being enough to make the outgoing payments. The current recession has stopped the investment influx in its tracks and caused many, many scams to be exposed. The Madoff scandal itself also caused some of Florida’s schemes to be discovered – because many local investors lost money in that debacle while it made others nervous enough to start withdrawing their investments.
The investigation and prosecution of alleged Ponzi schemes can be drawn-out and complicated matters, best navigated with the assistance of an experienced federal criminal defense attorney. Involving an attorney early on in the process can be extremely beneficial to any fraud suspect or defendant.