Once Ponzi schemers are discovered, it is usually the case that the schemer has spent all or most of the money. So while you could certainly sue the Ponzi schemer and very likely win a judgment against them in court, it’s unlikely you’ll recover any money at the end of the day.
What is a Ponzi scheme and what does the victim lost?
In a Ponzi scheme, a con artist offers investments that promise very high returns with little or no risk to his victims. As a result, most investors end up losing all or much of the money they invested. In some cases, the operator of the scheme may simply disappear with the money.
Who are the victims of a Ponzi scheme?
In-depth research on the victims of Ponzi schemes appears to be limited. Recently, Lewis (2010, 2011a, 2011b) performed a series of studies on the victims of the Bernard Madoff fraud. Lewis found that Madoff used the art of impression management to ingratiate himself with potential or current investors.
How can you recover from a Ponzi scheme?
Recovering from a Ponzi Scheme. After a Ponzi scheme has collapsed, the first step is to “secure what assets remain,” and “state or federal court receivership and/or bankruptcy court protection can stem, or slow, a run on the remaining assets.” James C. Sell, “Anatomy of a Ponzi Scheme: Part 4,” May 2010 at 40.
What’s the difference between a Ponzi scheme and Peter to Paul?
A Ponzi scheme, or Peter-to-Paul scheme (from the phrase “robbing Peter to pay Paul”) is an investment scheme wherein new investors’ money is used to pay the promised return to previous investors” rather than profits of the purported business venture.
How is a Ponzi scheme different from an outstanding debt?
(James C. Sell, “Anatomy of a Ponzi Scheme: Part 1,” Greater Phoenix Attorney at Law Magazine, Feb. 2010 at 17.) Unlike borrowing money to pay an outstanding debt, with a Ponzi scheme there is still a debt, but it is owed to a different person and is larger.
