Ponzimonium: How Scam Artists are Ripping Off America
A new book by Commissioner Bart Chilton
Financial scam artists are ripping off Americans more and more according to recent government figures. "We thought all the frauds and Ponzi scams were horrific in the wake of the Madoff scandal, but it is even worse now,” says Commissioner Bart Chilton. While federal, state and local law enforcement are going after the con artists more than ever before, there are basic precautions consumers should take before they part with their hard-earned money.
Commissioner Chilton lays it all out in a new book. In Ponzimonium—How Scam Artists are Ripping Off America, he tells the fascinating stories of ten such Ponzi scams that took place in 2009. “These are real cases, real fraudsters, with unfortunately, very real victims,” Chilton writes. The book also captures, in words and pictures, a behind-the-scenes look at the lifestyles of the schemers.
One con artist purchased a fleet of luxury vehicles in colors like lime green and “blue & cream,” including multiple Ferraris, Lamborghinis, Porsches, a Bentley, a Maserati, a Lincoln Limousine, and a metallic burnt orange Hummer golf cart. “This guy took hard-working peoples’ money and used it for a mansion, nearly 20 plasma televisions, sports and rock and roll memorabilia, and a contingent of body guards,” Chilton said. Another fraudster bought a 269-acre ranch, a fleet of classic sports cars, two airplanes and massive diamonds for ladies he was wooing in New York, Toronto and St. Louis.
These mini-Madoff scams took place all across the nation,” Chilton notes. “The consequences for the investors-turned-victims can be pretty horrific—people losing money for their kids’ college funds, for needed health care expenses, or for their own retirement.” “In most instances it is preventable with a little education and some due diligence fact checking.”
Designed and written as a consumer education tool, Ponzimonium includes a chapter containing the “Red Flags of Fraud” to help people avoid being scammed. The Red Flags are tips like checking to make sure a company is legitimately registered and other due diligence “to do” items before an investment is made. Ponzimonium also includes an “Investor Checklist” designed to help citizens ask the right questions prior to investing.
Ponzimonium is a CFTC publication available for sale by the Government Printing Office online at http://bookstore.gpo.gov/. It may also be purchased online at barnesandnoble.com and amazon.com. Neither Chilton nor the CFTC, make any profit from the sale.
Ponzi Scheme Red Flags
1. If it sounds too good to be true, it is.
2. The investment promises little or no risk of loss or promises you won't lose money.
3. Profits or rates of return on an investment are guaranteed regardless of the direction of markets.
4. The investment is difficult to understand or incomprehensible.
5. There is a need for secrecy. Not being able to get written information about a potential investment should raise suspicions.
The following checklist is designed to help you ask the right questions before making an investment. Once you get the answers, do your due diligence and verify the information with the appropriate federal regulator, and with your state securities regulator. Remember, the time to ask questions is before you hand over your money.
• Salesperson/Agent Name
• Company/Business Name
• Company/Business Address
• Phone Number
• Website Address
Investment Products/Services Offered:
• Commodity Futures/Options
• Foreign Currency
• Estate Planning
• Real Estate
Who regulates or licenses the product/service offered?
What license(s) or registration(s) to you hold that authorizes you to offer or sell this product/service? Write down the license/registration numbers for all applicable licenses/registrations.
What written information will I receive about his investment before I make a decision?
• Offering or Private Placement Memorandum
• Most Recent Annual Report
• Most Recent Quarterly or Interim Report
• Recent News Releases
• Research Reports
What are the risks associated with this investment?
What are the fees and associated costs for this investment and how are they calculated?
Are there any restrictions on accessing funds once I invest?