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Defending Yourself Against Allegations of Involvement in a Ponzi Scheme

Ponzi

Ponzi schemes can and do take a number of different forms, but all involve some sort of fraud and so qualify as white collar crimes, which should be taken seriously, as conviction can come with expensive fines and even jail time. With so much at stake, it is critical for those who are being investigated for, or have been accused of, involvement in a Ponzi scheme, to contact an experienced white collar crime lawyer who can help them begin formulating a defense.

What is a Ponzi Scheme? 

Ponzi schemes are a form of investment fraud that involves paying existing investors with funds collected from new investors. Although most Ponzi scheme organizers promise to invest the funds obtained from new investors and then generate returns, which will be handed down to investors, in reality, they use these funds to pay earlier investors and or keep it themselves. Because Ponzi schemes often come with little or no legitimate earnings, they require a constant flow of additional funds in order to survive, so when it becomes difficult to recruit new investors, or when significant numbers of investors cash out, the scheme usually collapses, at which point, many investors realize that they were unwittingly dragged into a fraudulent scheme.

State and Federal Law  

In Florida, the Deceptive and Unfair Trade Practices Act, prohibits involvement in Ponzi schemes, which includes:

  • Using chain referral sales techniques to convince customers to purchase a service or product worth more than $100 that is actually not being offered; and
  • Promising to compensate investors for recruiting more members.

Depending on the nature of the crime, namely the number of people affected and the amount of money involved, this type of offense can be classified as either a misdemeanor or a felony. As a result, residents who are convicted could face a wide range of penalties, including fines, jail time, supervised release, business license revocation, and mandatory restitution.

Federal law, unlike state law, does not specifically address Ponzi schemes in a single statute. Instead, the Federal Trade Commission is permitted to prosecute those whose deceptive practices and fraudulent acts affect trade in some way.

Possible Defenses  

Multi-level marketing businesses, which are perfectly legal, may appear similar to Ponzi schemes in many ways. The primary difference between multi-level marketing companies and Ponzi schemes is that with the former, the company provides a product or service to customers via sales or online services. When a defendant can prove that the company in question had a legitimate business model that provides a customer with a product or service, he or she may be able to avoid criminal conviction.

Call Our Office Today to Schedule a Free Case Evaluation with a Dedicated Miami Attorney  

If you are being investigated for your involvement in a Ponzi scheme, you need the advice of an experienced white collar crime attorney who can help you formulate a defense. To learn more about your charges and possible defenses, please call Jeffrey S. Weiner, P.A. Criminal Defense Attorneys at 305-670-9919. Initial consultations are offered free of charge, so please don’t hesitate to call or contact us online today.

Resource:

investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme

https://www.jeffweiner.com/white-collar-crimes-and-asset-forfeiture/

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Miami Criminal Attorneys

9130 South Dadeland Blvd
Miami, Florida 33156

Telephone: 305-670-9919
Fax: 305-670-9299
Email:lawfirm@jeffweiner.com

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