Why South Florida is a Target for Ponzi Schemers

Learn what to look for to avoid being swindled by a Ponzi scheme in South Florida

A Ponzi scheme is a type of investment fraud that is directed by a single individual who creates an entire scheme that hinges on new investment funding being used to pay existing investors. As long as new investors are plentiful, the scheme can work and the orchestrator can benefit financially for years. Ponzi schemers generally urge investors to promote the investors preying on whole communities, religious institutions and similarly situated people.

Some of the most elaborate and successful Ponzi schemes have spanned decades (Bernie Madoff was engaged in fraudulent activities for at least 20 years). But once new investors dry up, the investment scheme quickly collapses and numerous investors lose large sums of money.

Targeted victims of Ponzi schemes

Elder financial fraud is on the rise in our country as baby boomers enter retirement, many of whom rely on their investments to support them. The large population of retirement communities in South Florida has made the Sunshine State a particularly vulnerable area. There are several reasons why the elderly (particularly in South Florida) are likely being targeted for these types of fraudulent investments:

• The majority of people living in South Florida are over the age of 65 and some have disposable income that can be invested.

• Groups living in close proximity (retirement communities, for example) often meet together and have guest speakers talk about a variety of topics. Fraudulent investors often use these forums to find groups of vulnerable investors. The devious orchestrators of Ponzi schemes also benefit from the community atmosphere and the group dynamic. If they can convince one member of a wealthy community to invest, then others will often follow their lead. This is frequently referred to as affinity fraud.

• Masterminds of Ponzi schemes tend to want to make connections with their investors and cultivate trust and a personal relationship, making it easier to persuade them to invest their money. Some older Americans are also looking for friendship and appreciate the attention and personal interest, which makes them vulnerable to being taken advantage of.

• One of the primary strategies of the scheming mastermind is to talk about the investment as a low risk, high yield prospect, which may particularly appeal to older Americans living in the South Florida area.

How to protect yourself and your loved ones

Here are some common strategies used by the leaders of Ponzi schemes:

• Unexpected calls, emails or other correspondence with lofty promises for high returns

• Promises of significant short term returns without any real specific information

• Uncommon, unconventional business model or strategy; vague information and difficulty answering questions

• Limited availability for investors once initial investment is made

• Investors are concentrated in a specific area or are part of an organization or affiliation

If you or a loved one suspects that your investment broker is not being entirely honest about your financial investment, or if you are unable to get specific information or paperwork from him/her about your investments or returns, you may want to seek help from a law firm or the SEC.

Silver Law Group represents victims of Ponzi schemes in South Florida and all over the United States. We understand that you feel betrayed and it may be difficult to trust after this experience, but our team only gets paid if we help recover your funds, so you can be confident that we have your best interest at heart.

We also frequently represent whistleblowers who report Ponzi schemes to the SEC in the hope of protecting future potential victims. The SEC program offers a reward to whistleblowers in many circumstances which lead to successful SEC action.

Call our experienced attorneys at 1-800-975-4345 to discuss your case with an experienced securities arbitration attorney at no cost.