List of Ponzi schemes - AbsoluteAstronomy.com

This is a list of Ponzi scheme

Ponzi scheme

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...

s, fraudulent investment operations that pay returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.

19th century

Before Ponzi, in 1899 William "520 Percent" Miller opened for business as the "Franklin Syndicate" in Brooklyn
Brooklyn
Brooklyn is the most populous of New York City's five boroughs, with nearly 2.6 million residents, and the second-largest in area. Since 1896, Brooklyn has had the same boundaries as Kings County, which is now the most populous county in New York State and the second-most densely populated...

, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

. Miller promised 10% a week interest and exploited some of the main themes of Ponzi schemes such as customers reinvesting the interest they made. He defrauded buyers out of $1 million and was sentenced to jail for 10 years. After he was pardoned, he opened a grocery store on Long Island. During the Ponzi investigation, Miller was interviewed by the Boston Post
Boston Post
The Boston Post was the most popular daily newspaper in New England for over a hundred years before it folded in 1956. The Post was founded in November 1831 by two prominent Boston businessmen, Charles G...

to compare his scheme to Ponzi's – the interviewer found them remarkably similar, but Ponzi's became more famous for taking in seven times as much money.

1930s

Ivar Kreuger
Ivar Kreuger
Ivar Kreuger was a Swedish civil engineer, financier, entrepreneur and industrialist. In 1908 Kreuger co-founded the construction company Kreuger & Toll Byggnads AB which specialized in new building techniques. By aggressive investments and innovative financial instruments he built a global match...

, a Swedish businessman, known as the "match king", built a Ponzi scheme, defrauding investors based on the supposedly fantastic profitability, and ever expanding nature, of his match monopolies. The scheme soon collapsed in the 1930s, and Kreuger shot himself.

1980s

Between 1970 and 1984 in Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...

, a woman known as Dona Branca
Dona Branca
María Branca dos Santos, more commonly referred to as "Dona" Branca was a Portuguese criminal known chiefly for maintaining a Ponzi scheme in Portugal between 1970 and 1984 that paid a ten percent monthly interest...

maintained a scheme that paid 10% monthly interest. In 1988 she was sentenced to 10 years in prison. She always claimed that she was only trying to help the poor, but in her trial it was proven that she had received the equivalent of €85 million (almost US$120 million).
In January 1984 Adriaan Nieuwoudt started the so-called "Kubus" scheme
Kubus scheme
The Kubus scheme was a Ponzi scheme that originated in South Africa in the 1980s and was subsequently exported to the United States. It remains among the biggest frauds in the history of both countries.-Origins:...

with an apparent beauty product in South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...

. Subscribers to the scheme bought a supposedly biological substance called an "activator", that was used to grow cultures in milk. After growing for a week or two, the cultures were harvested and dried, and sold back to the scheme. The cultures were never used for a beauty product but were simply ground up and resold to further investors as activators. Other schemes by Nieuwoudt include investment in a holiday resort and a scheme involving collecting useless old postage stamps. He is seeking investors for a get-rich-quick coaline mining operating on his farm.
Sixteen hundred investors in Diamond Mortgage Company and A.J. Obie, two firms with the same managers, lost approximately $50 million in what the Michigan Court of Appeals
Michigan Court of Appeals
The Michigan Court of Appeals is the intermediate-level appellate court of the state of Michigan. It was created by the Michigan Constitution of 1963, and commenced operations in 1965...

described as "the largest reported 'Ponzi' scheme in the history of the state." It led to the passage in 1987 of the Mortgage Brokers, Lenders, and Servicers Act."
In the 1980s in San Diego, California
San Diego, California
San Diego is the eighth-largest city in the United States and second-largest city in California. The city is located on the coast of the Pacific Ocean in Southern California, immediately adjacent to the Mexican border. The birthplace of California, San Diego is known for its mild year-round...

, J. David & Company, an alleged currency and commodity trading and investing operation named after its founder, J. David Dominelli, a withdrawn and shy currency and commodity trader, was revealed to be a Ponzi scheme which took in $200 million and returned $120 million to investors, leaving a net loss of $80 million. The scheme touched all levels of upper class business and professional life in San Diego and environs, and involved the mayor of Del Mar, California
Del Mar, California
Del Mar is an upscale beach town in San Diego County, California. The population was 4,161 at the 2010 census, down from 4,389 at the 2000 census. The San Diego County Fair is hosted on the Del Mar Fairgrounds every summer. Del Mar is Spanish for "of the sea" or "by the sea", because it is located...

, a cozy upscale beach town just north of La Jolla, who was J. David's assistant and live-in companion, and others, including the prominent New York law firm Rogers & Wells
Rogers & Wells
Rogers & Wells was a New-York based international law firm founded in 1873. After several name changes, it was renamed for William P. Rogers and John A. Wells. The firm was well known for its litigation arm...

(now Clifford Chance
Clifford Chance
Clifford Chance LLP is a global law firm headquartered in London, United Kingdom and a member of the 'Magic Circle' of leading UK law firms. It is one of the ten largest law firms in the world measured by both number of lawyers and revenue...

), which had advised J. David (through a rogue partner) and others. When the fall came, J. David briefly escaped to Montserrat in the Caribbean, but was returned ultimately to plead guilty to federal charges and receive 20 years federal imprisonment.
Between 1978 and 1983 Ron Rewald
Ron Rewald
Ron Rewald is a former Hawaii investment advisor, professional football player and self-described CIA agent who was convicted of wire fraud and mail fraud in 1985.-Football career:...

ran an investment firm in Hawaii
Hawaii
Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...

. The firm declared bankruptcy in 1983 and was revealed to have been a Ponzi scheme which defrauded over 400 investors of more than $22 million. Rewald claimed that he had been operating the firm as a front for the U.S. Central Intelligence Agency
Central Intelligence Agency
The Central Intelligence Agency is a civilian intelligence agency of the United States government. It is an executive agency and reports directly to the Director of National Intelligence, responsible for providing national security intelligence assessment to senior United States policymakers...

.

1990s

МММ was a Russian company that perpetrated one of the world's largest Ponzi schemes of all time. By different estimates from 5 to 40 million people lost up to $ 10 billion. The company started attracting money from private investors, promising annual returns of up to one thousand percent. It is unclear whether a Ponzi scheme was the initial intention, inasmuch as such extravagant returns might have been possible during the Russian hyperinflation in such commerce as import-export. In the aftermath at least 50 investors, having lost all of their money, committed suicide.
In Romania, between 1991 and 1994, the Caritas scheme run by the "Caritas" company of Cluj-Napoca
Cluj-Napoca
Cluj-Napoca , commonly known as Cluj, is the fourth most populous city in Romania and the seat of Cluj County in the northwestern part of the country. Geographically, it is roughly equidistant from Bucharest , Budapest and Belgrade...

, owned by Ioan Stoica promised eight times the money invested in six months. It attracted 400,000 depositors from all over the country who invested 1,257 billion lei
Romanian leu
The leu is the currency of Romania. It is subdivided into 100 bani . The name of the currency means "lion". On 1 July 2005, Romania underwent a currency reform, switching from the previous leu to a new leu . 1 RON is equal to 10,000 ROL...

(about 1 billion USD) before it finally went bankrupt on 14 August 1994, having a debt of US$450 million. The owner, Ioan Stoica was sentenced in 1995 by the Cluj
Cluj-Napoca
Cluj-Napoca , commonly known as Cluj, is the fourth most populous city in Romania and the seat of Cluj County in the northwestern part of the country. Geographically, it is roughly equidistant from Bucharest , Budapest and Belgrade...

Court to a total of seven years in prison for fraud, but he appealed and it was reduced to two years; then he went on to the Supreme Court of Justice
High Court of Cassation and Justice
The High Court of Cassation and Justice is Romania's supreme court, and the court of last resort. It is the equivalent of France's Cour de cassation and serves a similar function to other courts of cassation around the world...

and the sentence was finally reduced to one year and a half.
In late 1994, the European Kings Club collapsed, with ensuing losses of about $1.1 billion. This scam was led by Damara Bertges and Hans Günther Spachtholz. In the Swiss cantons
Cantons of Switzerland
The 26 cantons of Switzerland are the member states of the federal state of Switzerland. Each canton was a fully sovereign state with its own borders, army and currency from the Treaty of Westphalia until the establishment of the Swiss federal state in 1848...

Uri
Canton of Uri
Uri is one of the 26 cantons of Switzerland and a founding member of the Swiss Confederation. It is located in Central Switzerland. The canton's territory covers the valley of the Reuss River between Lake Lucerne and the St. Gotthard Pass. German is the primary language spoken in Uri...

and Glarus
Canton of Glarus
The Canton of Glarus is a canton in east central Switzerland. The capital is Glarus.The population speaks a variety of Alemannic German.The majority of the population identifies as Christian, about evenly split between the Protestant and Catholic confessions.-History:According to legend, the...

, it was estimated that about one adult in ten invested into the EKC. The scam involved buying "letters" valued at 1,400 Swiss francs that entitled buyers to receive 12 monthly payments of 200 Swiss francs. The organisation was based in Gelnhausen, Germany.
In early 1996, the United States Securities and Exchange Commission
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...

(SEC) filed a civil action against Bennett Funding Group
Bennett Funding Group
The Bennett Funding Group were the perpetrators of the second largest Ponzi scheme in U.S. history. The leasing & funding company was based in Syracuse, New York...

, its chief financial officer, Patrick R. Bennett, and other companies Bennett controlled, in connection with a massive Ponzi scheme. The companies fraudulently raised hundreds of millions of dollars, purportedly to purchase assignments of equipment leases and promissory notes.
From 1993 until 1997 a church named Greater Ministries International
Greater Ministries International
Greater Ministries International was a church ministry that ran a Ponzi scheme taking nearly 500 million dollars from 18,000 people. Headed by Gerald Payne in Tampa, Florida, the ministry bribed church leaders around the United States to keep "donations" coming in. Payne and other church elders...

in Tampa, Florida
Tampa, Florida
Tampa is a city in the U.S. state of Florida. It serves as the county seat for Hillsborough County. Tampa is located on the west coast of Florida. The population of Tampa in 2010 was 335,709....

, headed by Gerald Payne bilked over 18,000 people out of $500 million. Payne and other church elders promised the church members double their money back, citing Biblical scripture. However, nearly all the money was lost and hidden away. Church leaders received prison sentences ranging from 13 to 27 years.
In the mid-1990s, Albania
Albania
Albania , officially known as the Republic of Albania , is a country in Southeastern Europe, in the Balkans region. It is bordered by Montenegro to the northwest, Kosovo to the northeast, the Republic of Macedonia to the east and Greece to the south and southeast. It has a coast on the Adriatic Sea...

was transitioning into a liberalized market economy after years under a State-controlled economy reinforced by the cult of personality
Cult of personality
A cult of personality arises when an individual uses mass media, propaganda, or other methods, to create an idealized and heroic public image, often through unquestioning flattery and praise. Cults of personality are usually associated with dictatorships...

involving longtime Communist leader Enver Hoxha
Enver Hoxha
Enver Halil Hoxha was a Marxist–Leninist revolutionary andthe leader of Albania from the end of World War II until his death in 1985, as the First Secretary of the Party of Labour of Albania...

; the rudimentary financial system became dominated by pyramid schemes, and government officials tacitly endorsed a series of pyramid investment funds. Many Albanians, approximately two-thirds of the population, invested in them. In 1997
1997 rebellion in Albania
The 1997 unrest in Albania, also known as the Lottery Uprising or Anarchy in Albania, was an uprising sparked by Ponzi scheme failures...

, Albanians, who had lost $1.2 billion, took their protest to the streets where uncontainable rioting and attacks on government infrastructure led to the toppling of the government and the temporary existence of a stateless society. Although technically a Ponzi Scheme, the Albanian scams were commonly referred to as pyramid schemes both popularly and by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

.
In 1997, South African businessman Kenny Kunene
Kenny Kunene
-Early life:Kenny was raised by his mother and grandparents. Kunene's mother has served as an Evangelist and faith healer. While he was growing up near Odendaalsrus his grandmother, a midwife, was the family's sole breadwinner. As as an impoverished teenager living under apartheid, Kunene...

was convicted of running a Ponzi scheme with over 2,000 investors and sentenced to six years in prison.
In Delhi, India, Hoffland Finance collapsed amid a major scandal in 1998. Hoffland, a category II merchant banker, had been suspended by SEBI, which directed it to refrain from undertaking any new portfolio management assignments. It had floated a scheme, called "Invest Card", that lured investors with a return of 27 per cent annually.

21st century

In 2001, the Haitian population fell prey to Ponzi schemers offering rates up to 15%. The outfits called "cooperatives" appeared to be implicitly backed by the government and became wildly popular in the population at large who felt safe since the coops were openly advertising on the radio, TV ads, and used as spokepeople Haitian pop stars. It is estimated that more than $240 million were swindled from investors, equivalent to 60% of the country's GDP.
The Brothers was a large investment operation, eventually exposed as a Ponzi scheme, in Costa Rica
Costa Rica
Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....

from the late 1980s until 2002. The fund was operated by brothers Luis Enrique and Osvaldo Villalobos. Investigators determined that the scam took in at least $400 million. Most of the clientele were American and Canadian retirees but some Costa Ricans also invested the minimum $10,000. About 6,300 individuals ultimately were involved. Interest rates were 3% per month, usually paid in cash, or 2.8% compounded. The ability to pay such high interest was attributed to Luis Enrique Villalobos’ existing agricultural aviation business, investment in unspecified European high yield funds, and loans to Coca Cola, among others. Osvaldo Villalobos’ role was primarily to move money around a large number of shell companies
Shell (corporation)
A shell corporation is a company which serves as a vehicle for business transactions without itself having any significant assets or operations. Shell corporations are not in themselves illegal and have legitimate business purposes. However, they are a main component of the underground economy,...

and then pay investors. In May 2007 Osvaldo Villalobos was sentenced to 18 years in prison for fraud and illegal banking. Luis Enrique Villalobos remains a fugitive.
In 2003, the SEC closed a $1 billion scheme by Mutual Benefits Company in Florida, run by Peter Lombardi, affecting 28,000 investors. Mutual claimed it used the money to pay viaticals settlements to HIV
HIV
Human immunodeficiency virus is a lentivirus that causes acquired immunodeficiency syndrome , a condition in humans in which progressive failure of the immune system allows life-threatening opportunistic infections and cancers to thrive...

patients. Lombardi is now serving a 20-year prison sentence.
In 2004, the SEC fined Raymond James
Raymond James
Raymond James Financial is a diversified financial services holding company whose subsidiaries engage primarily in investment and financial planning, in addition to investment banking and asset management...

$6.9 million for failure to supervise former broker Dennis Herula. Herula was accused of participating with others in a ponzi scheme that raised about $44.5 million from investors in 1999-2000. Herula himself raised about $16.5 million of investor funds, most of which was later transferred to his wife's brokerage account at Raymond James
Raymond James
Raymond James Financial is a diversified financial services holding company whose subsidiaries engage primarily in investment and financial planning, in addition to investment banking and asset management...

. He was arrested in Bermuda and pleaded guilty to criminal charges of wire fraud and sentenced to 188 months in jail.
In February 2005, Moshe Leichner and his son Zvi Leichner were sentenced to 240 months in federal prison for running a Ponzi scheme through a commodities futures trading firm, Midland Euro that defrauded hundreds of investors out of more than $95 million, including Dean Tanella of GunnAllen Financial (shut down by regulators in March 2010 for fraud allegations and losses related to another Ponzi scheme) and Safe Harbor Capital Management (now dba HarborLight Capital Management) which lost $40 million for their investors.
In May 2006, James Paul Lewis, Jr.
James Paul Lewis, Jr.
James Paul Lewis, Jr. operated one of the largest and longest running "Ponzi schemes" in United States history.Over approx. 20 years, Lewis collected around $311 million U.S. dollars from investors. He operated under the name of Financial Advisory Consultants in Lake Forest, Calif., and promised...

was sentenced to 30 years in federal prison for running a $311 million Ponzi scheme over a 20-year time period. He operated under the name Financial Advisory Consultants from Lake Forest, California
Lake Forest, California
Lake Forest is a city in Orange County, California. The population was 77,264 at the 2010 census.Lake Forest incorporated as a city on December 20, 1991. Prior to a vote of the residents in that year, the community had formerly been known as El Toro since the 1880s...

.
In October 2006 in Malaysia, two prominent members of society and several others were held for running an alleged scam, known as SwissCash or Swiss Mutual Fund
Swiss Mutual Fund
The Swiss Mutual Fund or Swisscash is an offshore investment company headquartered in the Commonwealth of Dominica. Despite the inclusion of the word Swiss in its name, the Swiss Mutual Fund's board of directors is comprised solely of Dominican citizens, and the company does not appear to have any...

(1948). SwissCash offered returns of up to 300% within a 15-month investment period. Currently, this HYIP investment is offered to citizens of Malaysia, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

, and Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...

. It claimed investors’ funds were channeled to business activities ranging from oil exploration to shipping and agriculture in the Caribbean. The company claims to be operating out of New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

and incorporated in the Commonwealth of Dominica.
In Oct, 2006 Gregory Nathan, a Sydney fund manager, was arrested on charges including dishonest conduct and obtaining money by making false and misleading statements, in what investigators discovered to have been a Ponzi scheme. Nathan, a notorious gambler, reported returns that were always stellar, prompting many to invest their life savings. Nathan didn't discriminate when it came to pitching his investment opportunities with victims including his mother, his girlfriend, his flatmate, the elderly and handicapped. Nathan falsely reported his fund had $22 million under management, when the most it could have had at any one time was approximately $4.9 million. From 2001 - 2006 an estimated $8.8 million was lost by an untold number of investors believed to be in the hundreds. In a desperate late bid to perpetuate the scheme, Nathan sent an email to existing clients on Oct 9, 2006 just days before placing his companies in administration, encouraging them to increase their investment. On 19 Sept, 2008, Nathan was sentenced to a total of seven years imprisonment including a five year non-parole period.
On June 27, 2007, former boy band
Boy band
A boy band is loosely defined as a popular music act consisting of only male singers. The members are expected to dance as well as sing, usually giving highly choreographed performances. More often than not, boy band members do not play musical instruments, either in recording sessions or on...

mogul
Business magnate
A business magnate, sometimes referred to as a capitalist, czar, mogul, tycoon, baron, oligarch, or industrialist, is an informal term used to refer to an entrepreneur who has reached prominence and derived a notable amount of wealth from a particular industry .-Etymology:The word magnate itself...

Lou Pearlman
Lou Pearlman
Louis Jay "Lou" Pearlman is a former impresario of the successful 1990s boy bands such as The Backstreet Boys, *NSYNC, Take 5, O-Town and US5. In 2006, it was discovered that Pearlman had perpetrated one of the largest and longest-running Ponzi schemes in American history, leaving more than $300...

was indicted by a grand jury on several counts of fraud which is turning out to be one of the largest and longest running United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

Ponzi schemes ever. His scheme lasted for over 20 years. The final total damage may rest somewhere near $500 million.
On August 17, 2007, the Philippine National Bureau of Investigation (NBI) filed syndicated estafa cases against 27 officers and investors of FrancSwiss Investment, a "Ponzi" pyramiding scam on the Internet. Charged were Michael Mansfield, chief financial officer; Kurt Sandelman, risk management team leader; Rupert Benedict Da Vinco, investment team leader; Julia Rodriguez, international banking team leader; Hector Willem Sidberg, marketing and international affairs; and Fernando Munoz, customer service leader; Roger Smith, the British chief operation officer of FS Investment in the Asia-Pacific region; Bensy Fong, the Singaporean system operation officer; Raymond Chua, Singaporean marketing officer; a certain Michelle and Mike, Filipino secretaries and collectors of money from investors; 16 investors, including arrested suspect Eleazard Castillo, 26, a native of Cabuyao, Ilocos Sur, allegedly one of the financial advisers of FrancSwiss Investment. 41 investors claimed they lost a total of $75,000 to the investment scheme. FrancSwiss deceived investors in the Philippines of ₱1 billion ($50 million).
In the third and the biggest Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...

Ponzi scam (involving $150 million and $250 million), criminal charges, based on suit filed by 21,000 complainants were filed on June, 2008, with the Department of Justice, against Performance Investments Products Corp (PIPC) officers and incorporators for violation of the Securities Regulation Code (SRC), versus: Singaporean national Michael H.K. Liew, PIPC president; Cristina Gonzalez-Tuason, general manager, and other officers and agents - Ma. Cristina Bautista-Jurado, Barbara Garcia, Anthony Kierulf, Eugene Go, Michael Melchor Nubla, Ma. Pamela Morris, Luis Aragon, Renato Sarmiento Jr., Victor Jose Vergel de Dios, Nicoline Amoranto Mendoza, Jose Tengco III, Oudine Santos and Herley Jesuitas.
The WexTrust Investment firm was closed August 1, 2008 by the Securities and Exchange Commission, charging that WexTrust and two of its owners (Joseph Shereshevsky of Norfolk and Steven Byers of Oak Brook, Ill) operated a Ponzi-type scheme by promising unusually high returns to earlier investors and paying them with money raised from later investors. The SEC case, filed in federal court in Manhattan, alleged that WexTrust and the two men defrauded investors by diverting at least $100 million to unauthorized uses. WexTrust targeted the Orthodox Jewish community, particularly in Norfok, VA and New York City. The receiver, Timothy Coleman, has returned only 2% of principal to WexTrust investors. Shereshevsky and Byers have not got gone to trial.
Minnesota, USA - allegedly orchestrated by Saint Cloud, Minnesota celebrity businessman Tom Petters
Tom Petters
Thomas Joseph Petters is an American business man and the former CEO and chairman of Petters Group Worldwide. Petters resigned his position as CEO on September 29, 2008, amid mounting criminal investigations...

. On December 1, 2008 Tom Petters was charged by the Federal government as the mastermind behind a $3.65 billion Ponzi scheme that bilked investors over a 13-year period. Tom Petters lived an extravagant lifestyle supported by his Ponzi scheme. Petters faces 20 counts of wire
Wire fraud
Mail and wire fraud is a federal crime in the United States. Together, 18 U.S.C. §§ 1341, 1343, and 1346 reach any fraudulent scheme or artifice to intentionally deprive another of property or honest services with a nexus to mail or wire communication....

and mail fraud, Conspiracy
Conspiracy (crime)
In the criminal law, a conspiracy is an agreement between two or more persons to break the law at some time in the future, and, in some cases, with at least one overt act in furtherance of that agreement...

, and money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...

for the alleged investment scheme that ran from 1995 through September 2008. He is expected to plead not-guilty, but his co-conspirators in the Ponzi scheme, Deanna Coleman, Robert White, Michael Catain, and Larry Reynolds, have all pled guilty. The Petters Ponzi scheme came to an end when Petters' top co-conspirator Deanna Coleman turned government informant and wore a wire. Petters and the others were planning to flee to countries without extradition agreements with the U.S. Deanna Coleman and Michael Catain had properties in Costa Rica. On December 2, 2009, Tom Petters was found guilty in the U.S. District Court in St. Paul, Minnesota on 20 counts of wire and mail fraud. Reporters from the Minneapolis Star Tribune stated that it is extremely unlikely that Petters will ever again live as a free citizen. The US federal government is now seeking forfeiture of all Petters' assets. He later was convicted for turning Petters Group Worldwide
Petters Group Worldwide
Petters Group Worldwide was a diversified company based in Minnetonka, Minnesota that was turned into a $3.65 billion Ponzi scheme by its founder and CEO, Tom Petters. It currently has 3,200 employees and investments or full ownership in 60 companies, of which it actively managed 20, with offices...

into a $3.65 billion Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...

and was sentenced to 50 years in federal prison.
Jordan : Many traders were arrested on October / November 2008 for multi-millions Ponzi Scams.
September 15, 2008, Securities and Exchange Commission v. Jeanne M. Rowzee, James R. Halstead, and Robert T. Harvey United States District Court for the Central District of California. Civil Action No. SACV 08-1025 AG (ANx)SEC Charges Bogus PIPE Promoters in $52 Million Ponzi Scheme. The Securities and Exchange Commission today charged an Irvine, Calif., attorney and two other promoters for conducting a $52.7 million Ponzi scheme in which they sold investors bogus PIPE (private investment in public equity) investments, promised unrealistic profits, and misappropriated more than $20 million of investors' funds to function as their own personal piggy bank. Harvey misappropriated at least $2 million of Harvest Income funds to pay his personal credit card bills and other expenses. Harvey also paid himself approximately $2.3 million in purported "management fees." Harvey had a prior conviction with SEC violations in the early 80's and released from Federal Prison in 1987. Harvey currently operates an oil and gas investment company, Harvest Petroleum, Inc. located in McKinney, Texas. http://www.harvestpetroleum.com/ The defendants are charged with securities fraud under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and with conducting an unregistered offering under Section 5 of the Securities Act. Rowzee and Harvey are also charged with investment adviser fraud under Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and Halstead is charged with aiding and abetting violations of Sections 206(1) and 206(2) of the Advisers Act. The Commission's complaint seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties against each defendant.The Commission acknowledges the assistance of the Federal Bureau of Investigation and the California Department of Corporations in this matter.
On December 10, 2008, Bernard Madoff
Bernard Madoff
Bernard Lawrence "Bernie" Madoff is a former American businessman, stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S...

made an admission to his sons that his investments were "all one big lie." The following day he was arrested and charged with a single count of securities fraud. the losses were estimated to be $65 billion, making it the largest investor fraud in history. Madoff was sentenced to 150 years in prison on June 29, 2009.
On January 9, 2009, the U.S. Securities and Exchange Commission (SEC) charged Joseph S. Forte
Joseph S. Forte
Joseph S. Forte of Broomall, Pennsylvania operated a Ponzi scheme that cost investors $50 million. He reportedly signed a confession with the United States Postal Inspection Service.-Biography:...

from Bromall, PA with masterminding a $50 million Ponzi scheme. He swindled over 80 investors, mostly close friends from 1995 to 2009. The SEC investigator called Forte a "complete fraud". Records show Forte used for his own personal use, over $28 million.
On January 16, 2009, the Serious Fraud Office in the United Kingdom uncovered an £80 million buy-to-let property fraud scheme operating under a company called Practical Property Portfolio in which at least 1,750 investors were conned out of £25,000 each in return for a promise of a house in the North East of England. All five directors – John Potts, Peter Gosling, Natalie Laverick, Peter Graham, and Eric Armstrong – pleaded guilty to fraud and were sentenced in March 2009.
On January 26, 2009, Nick Cosmo, the founder of Agape World, surrendered to federal authorities in connection with a suspected $380 million Ponzi scheme. Previously convicted of fraud in 1999, Nicholas Cosmo, surrendered at the Long Island Rail Road train station in Hicksville, N.Y. In March 2009, a lawsuit was filed in New York against Bank of America, one of the largest banks in the United States, that claimed that Bank of America “established, equipped and staffed” a branch office in the headquarters of Mr. Cosmo’s firm, Agape Merchant Advance. As a result, the lawsuit contends that the bank knowingly “assisted, facilitated and furthered” Mr. Cosmo’s fraudulent scheme.
On February 9, 2009, the City of London Police Economic Crime Department arrested Terry Freeman, director of GFX Capital Markets Ltd, over £40 million fraud which is possibly another Ponzi scheme.
On February 17, 2009, the Stanford International Bank and proprietor Allen Stanford
Allen Stanford
Robert Allen Stanford is a former prominent financier and sponsor of professional sports who is in prison awaiting trial on charges his investment company was a massive Ponzi scheme and fraud. Stanford was the chairman of the now defunct Stanford Financial Group of Companies. A fifth-generation...

were accused of "massive fraud" by U.S. authorities. SIB's assets were frozen. The apparent Ponzi scheme drew in more than $8 billion of "deposits", many from investors in Latin America. He was arrested by the Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...

on June 18, 2009.
On February 25, 2009, the SEC charged James Nicholson
James Nicholson (Investor)
James M. Nicholson was an American businessman and was the head of the investment firm Westgate Capital Management. The headquarters of Westgate Capital was located in Pearl River, NY. Nicholson was arrested on February 25, 2009 by the FBI and charged by the SEC for allegedly "defraud[ing]...

for allegedly "defraud[ing] hundreds of investors of millions of dollars"
On March 13, 2009, a 67 year old Ohio woman named Joanne Schneider was sentenced to three years in prison, the minimum allowed, for operating a Ponzi scheme that cost investors an estimated $60 million.
On March 13, 2009, the SEC charged Brian J. Smart of Lehi, Utah
Lehi, Utah
-Attractions:Lehi Roller MillsLehi Roller Mills was founded in 1906 by a co-op of farmers. George G. Robinson purchased the mill in 1910, and since then it has remained in the family. It is run today by grandson R. Sherman Robinson....

, with securities fraud, saying he created a Ponzi scheme through which he defrauded elderly victims of $1.7 million.On June 6th 2011, Federal Judge Dale Kimball ruled that Brian Smart was found to be responsible for losses in the amount of 2.05 million. He was fined a total of $4,715,580 dollars.
On June 17, 2009, Donald Anthony Walker Young
Donald Anthony Walker Young
Donald Anthony Walker Young, who is known as Tony Young or Walker Young, was the owner of Acorn Investments and Acorn II L.P.. He was indicted, pleaded guilty and was sentenced for running a $25 million Ponzi scheme.Young was raised in Fitzgerald, Georgia...

, who is known as Tony Young or Walker Young, had his office seized for using money from new investors to pay previous investors and “stole some of the money to purchase a vacation home in Palm Beach, Fla.” Young operated the alleged Ponzi scheme through an investment partnership Acorn II L.P., which he established in 2001 to invest in publicly traded securities, authorities said. The SEC alleged in its 22-page complaint that the fraud began in mid-2005 and continued until recently. He was indicted on April 1, 2010; pleaded guilty in July, 2010, to mail fraud and money laundering; and was sentenced to 17-1/2 years in prison in May, 2011.
On June 2, 2009, the Colorado State Grand Jury indicted Jason Trevor Brooks of Boulder, Colorado on 24 counts of security fraud and theft. Authorities allege that from June 2005 to February 2008, Brooks collected about $10 million from investors to invest, but then used a vast majority of the funds for personal expenses, gambling, and to make interest payments and payouts to other investors. Brooks, working under the Genius Inc. name, told investors he had a distribution agreement with Matsushita Electric Industrial Co. Ltd. of Japan, which allowed him to purchase electronics and appliances as a distributor and then resell them for a profit to various home builders and other businesses, authorities said. On April 27, 2010 Jason Trevor Brooks pleaded guilty to four felony counts of securities fraud in a scheme in which he bilked investors out of $10 million. Jason was sentenced to 32 years in prison and was also ordered to pay more than $5.1 million in restitution to his victims. Brooks received eight-year prison sentences for each of the four counts to which he pleaded guilty—two counts of securities fraud and two counts of making an untrue statement.
On June 12, 2009, investors were reported to have lost billions of South African Rands in a Ponzi scheme masterminded by Barry Tannenbaum
Barry Tannenbaum
Barry Tannenbaum is a South African businessman who currently is living in Runaway Bay, Queensland. He is accused of running a R10 billion Ponzi scheme which was worth $1.2 billion at the time of the accusation, which could make this scheme South Africa's largest corporate fraud.- References :...

.
December 1, 2009: Scott W. Rothstein
Scott W. Rothstein
Scott W. Rothstein is a disbarred lawyer and the former managing shareholder, chairman, and chief executive officer of the now-defunct Rothstein Rosenfeldt Adler law firm. He was accused of funding his philanthropy, political contributions, law firm salaries, and an extravagant lifestyle with a...

is a disbarred lawyer and the former managing shareholder, chairman, and chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...

of the now-defunct Rothstein Rosenfeldt Adler law firm. He is accused of funding his philanthropy, political contributions, law firm salaries, and an extravagant lifestyle with a massive 1.4 billion dollar Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...

. Scott Rothstein turned himself in to federal authorities and was subsequently arrested on charges related to the Racketeer Influenced and Corrupt Organizations Act
Racketeer Influenced and Corrupt Organizations Act
The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization...

(RICO). Rothstein was denied bond by U.S. Magistrate Judge Robin Rosenbaum, who ruled that due to his ability to forge documents, he was considered a flight risk. Although his arraignment plea was not guilty, Rothstein cooperated with the Government and reversed his plea to guilty of five federal crimes on January 27, 2010. He was sentenced to 50 years, despite the prosecution asking for 40 years.
In 2010 Trevor Cook of Minnesota plead guilty and began serving a 25 year federal prison sentence in connection with the Oxford Group which reportedly took in $194 million. Bo Beckman still has charges pending in connection with the scheme.
In early 2010, it was reported that Tzvi Erez
Tzvi Erez
Tzvi Erez is a classical pianist and an alleged organizer of a multi-million dollar ponzi scheme in Toronto.Erez was born in Israel and began to toy with the piano at the age of three, beginning to study it formally at six....

from Toronto had scammed 76 creditors out of a combined 27 million dollars. He created an illegitimate print business called E Graphix, and convinced investors to give him large loans in order to carry out fictional printing orders. He was charged with fraud and forgery by Toronto police, but was not convicted because the Canadian courts lacked adequate trial time to give him a trial.
On May 20, 2010, the U.S. Securities and Exchange Commission (SEC) filed a federal case against Edward A. Allen and David L. Olson, two former brokers of World Financial Group
World Financial Group
World Financial Group is a financial services marketing organization based in Johns Creek, Georgia that markets investment, insurance, and various other financial products through a network of associates in the United States and Canada. It is a wholly owned subsidiary of AEGON...

/ World Group Securities
World Group Securities
World Group Securities, Inc. is the exclusive broker-dealer affiliate of World Financial Group and is a member of the AEGON Group.- Registration :...

, accusing them of having raised approximately $14,800,000 through the offer and sale of promissory notes as part of an illegal Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...

in the States of Ohio and Florida between September 2005 and December 2008.
On August 29th, 2011, James Davis Risher, a twice convicted securities felon plead guilty in Federal Court for his role in operating a massive $21 million dollar Ponzi scheme from 2007 to 2010, targeting elderly and unsophisticated investors. His victims were spread out across 8 US States and Canada, although most were concentrated near the city of Lakeland, FL. Operating through multiple US banks and at least two FINRA-registered investment firms, Risher was able to attract approximately $21 million of unsuspecting investor's money to be managed in his "Private Equity Funds." Although millions did find their way to the FINRA-registered brokerages through which he advertised he would manage, many millions more were funneled through his bank accounts and used to purchase real estate, vehicles, artwork, and other effects. The FBI, the SEC, the Florida Department of Law Enforcement, the IRS, Florida's Office of Financial Regulation, and the US Postal Inspection Service began to collaborate on an investigation into the matter sometime in 2010, leading to the May, 31st, 2011 apprehension and subsequent arrest of Mr. Risher.

Other notable schemes

Other notable (but involving smaller amounts of money) Ponzi schemes include:

Sarah Howe, who in 1880 opened up a "Ladies Deposit" in Boston promising eight percent interest, although she had no method of making profits. This unique scheme was billed as "for women only." Howe was arrested on October 18, 1880 by New York City Police and sentenced to three years in prison.

On March 22, 2000, four people were indicted in the Northern District of Ohio, on charges including conspiracy to commit and committing mail and wire fraud. A company with which the defendants were affiliated allegedly collected more than $26 million from "investors" without selling any product or service, and paid older investors with the proceeds of the money collected from the newer investors.

In late 2003, a scheme by Bill Hickman, Sr., and his son, Bill Jr., was shut down. He had been selling unregistered securities that promised yields of up to 20 percent; more than $8 million was defrauded from dozens of residents of Pottawatomie County
Pottawatomie County, Oklahoma
Pottawatomie County is a county located in the U.S. state of Oklahoma. The population was 65,521 as of the 2000 census. Its county seat is Shawnee...

, Oklahoma
Oklahoma
Oklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...

, along with investors from as far away as California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...

. Hickman was sentenced to 8 years in state prison.

In December 2004, Mark Drucker pleaded guilty to a Ponzi scheme in which he told investors that he would use their funds to buy and sell securities through a brokerage account. He claimed that he was making significant profits on his day trades and that he had opportunities to invest in select IPOs that were likely to turn a substantial profit in a short period of time. He promised guaranteed returns of up to fifty (50%) percent in 90 days or less. In less than two years of trading, Drucker actually lost more than $850,000 in day trading and had no special access to IPOs. He paid out more than $3.6 million to investors while taking in $6.3 million.

In June 2005, in Los Angeles, California, John C. Jeffers was sentenced to 168 months (14 years) in federal prison and ordered to pay $26 million in restitution to more than 80 victims. Jeffers and his confederate John Minderhout ran what they said was a high-yield investment program they called the "Short Term Financing Transaction." The funds were collected from investors around the world from 1996 through 2000. Some investors were told that proceeds would be used to finance humanitarian projects around the globe, such as low-cost housing for the poor in developing nations. Jeffers sent letters to some victims that falsely claimed the program had been licensed by the Federal Reserve and the program had a relationship with the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

and the United States Treasury. Jeffers and Minderhout promised investors profits of up to 4,000 percent. Most of the money collected in the scheme went to Jeffers to pay commissions to salespeople, to make payments to investors to keep the scheme going, and to pay his own personal expenses.

In February 2006, Edmundo Rubi pleaded guilty to bilking hundreds of middle and low-income investors out of more than $24 million between 1999 and 2001, when he fled the U.S. after becoming aware that he was under suspicion. The investors in the scheme, called “Knight Express”, were told that their funds would be used to purchase and resell Federal Reserve notes, and were promised a six percent monthly return. Most of those bilked were part of the Filipino community in San Diego.

On May 10, 2006, Spanish police arrested nine people associated with Forum Filatelico and Afinsa Bienes Tangibles
Afinsa
Afinsa was the world's third largest collectibles company, after Sotheby's and Christie's, and with its controlling stake in Escala Group operates in many European cities, the USA and Asia...

in an apparent Ponzi scheme that affected 250,000 investors from 1998 to 2001. Investors were promised huge returns from investments in a stamp fund.

Sept. 15, 2010, Nevin Shapiro
Nevin Shapiro
Nevin Shapiro is a former University of Miami football booster who is currently imprisoned for orchestrating a $930 million Ponzi scheme. According to interviews, he engaged in rampant violations of NCAA rules over eight years as a booster for University of Miami athletes...

pleaded guilty to a 2005 - 2009 Ponzi scheme in a Newark, New Jersey court. The scheme brought in approximately $880 million. Headquartered in Miami, the scheme was based on an import/export grocery business but was diverting investments to attract new investors. Among the items seized as a result of his plea were a $5 million Miami mansion and a yacht. He was known as "Lil Luke" because of his relationship with the Miami Hurricanes football
Miami Hurricanes football
The Miami Hurricanes football program competes in the Atlantic Coast Conference of the NCAA's Division I Football Bowl Subdivision for the University of Miami. The program began in 1926 and has won five AP national championships...

team. This was a tribute to Luther Campbell
Luther Campbell
Luther R. Campbell , also known as Luke Skyywalker, Uncle Luke or Luke, is a record label owner, rap performer , and actor...

, a famous former Hurricanes booster. On August 16, 2011, in a story broken by Yahoo! Sports
Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...

, Shapiro stated that his support of the team included cash, entertainment, prostitutes
Prostitution
Prostitution is the act or practice of providing sexual services to another person in return for payment. The person who receives payment for sexual services is called a prostitute and the person who receives such services is known by a multitude of terms, including a "john". Prostitution is one of...

, and gifts, all against NCAA
National Collegiate Athletic Association
The National Collegiate Athletic Association is a semi-voluntary association of 1,281 institutions, conferences, organizations and individuals that organizes the athletic programs of many colleges and universities in the United States...

rules. For more details on Shapiro's involvement with the Miami program, see 2011 University of Miami athletics scandal
2011 University of Miami athletics scandal
In 2011, the University of Miami Hurricanes football and men's basketball programs were investigated for NCAA rules violations alleged to have taken place from 2002 to 2010, centering around improper benefits given by booster Nevin Shapiro, and reported by investigative reporters at Yahoo!...

.

External links

Ponzi Schemes Have Colorful History, NPR
NPR
NPR, formerly National Public Radio, is a privately and publicly funded non-profit membership media organization that serves as a national syndicator to a network of 900 public radio stations in the United States. NPR was created in 1970, following congressional passage of the Public Broadcasting...

.org
Ponzi Scheme in Colombia. people falling prey to pyramid schemes
http://query.nytimes.com/gst/fullpage.html?res=9D06EFD9153AF935A25756C0A9679C8B63&scp=1&sq=theTaxPeople.net+&st=nyt
US Securities and Exchange Commission background information
Is Social Security a Ponzi Scheme? - Social Security Administration
Ponzi Schemes, by Bill E. Branscum, a financial crimes investigator.

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