The Madoff scandal is two years old today, and yet the Ponzi world continues. More victims, more lost savings. There will always be scamsters, of course, but there also are lots of ways to avoid getting scammed. The most obvious step: Do a Google search. You'd be amazed how much information concerning a possible Ponzi artist is available by just going online. It's also amazing how many people don't bother. But what if you can't find anything definitive? From the NYT:
Randy Shain, an executive vice president at First Advantage Investigative Services, had several suggestions. First, he said, an investor should ask the manager of the fund what institutions have invested with him. If the manager has been in the business for decades yet has not secured any institutional investments, that should be a warning sign, he said. Second, people should consider the manager's pedigree and ask where he learned how to manage money. "I don't want to hear, 'I've been trading my own account for 10 years,' " he said. Related to that is knowing who the manager's bosses were at those places.
Unfortunately, victims are often led into a swindle by friends and relatives.
[Thomas R. Ajamie, managing partner at Ajamie L.L.P., a Houston law firm that specializes in fraud litigation], said one of the most egregious recent examples of this involved Imperia Invest IBC, whose assets were frozen by the Securities and Exchange Commission in October. According to the S.E.C., Imperia defrauded some 14,000 investors out of $7 million. About $4 million was collected primarily from the deaf. "They found some deaf people who would ingratiate themselves into the deaf community," Mr. Ajamie said. "It was really vicious, but it was very consistent."