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Federal Ponzi Scheme Crimes

Posted by Hedding Law Firm | Jul 22, 2020

Nowadays, a significant number of individuals find themselves ensnared in the government's pursuit of so-called Ponzi schemes. These schemes, which initially appear as legitimate business ventures, often lead to devastating consequences for the investors involved.

Those investors pay money in hopes of getting dividends, high quick profits, or huge percentages on their money. Of course, the person operating the Ponzi scheme usually makes a lot of grandiose promises, shows the potential would-be investor some dividends and some things that have happened regarding the property, and obviously has a big hyped-up story about whatever the scheme involves.

Our federal criminal defense attorneys have provided a review below to help readers better understand Ponzi schemes.

Real Estate Ponzi Schemes

A lot of times, I see it involving real estate.  Sometimes, I see it involving other business ventures, and really, what seems to be happening is people are investing their money. The person who is in charge of the Ponzi scheme is taking the money for themselves.

Maybe they give very small dividends to some of the investors, but in reality, the money is not being invested in any project, or the project really doesn't have anything to do with the person purportedly in charge of it. Ultimately, what ends up happening is that the Ponzi scheme collapses.

The person who invested the money ends up getting either a very small dividend or no dividend at all. Ultimately, in these Ponzi scheme scenarios, the investors lose thousands, sometimes even millions of dollars, while the person in charge gains a bunch of money.

Defending Ponzi Scheme Charges

If you want to have a defense against a Ponzi scheme offense, you're going to have to show the government and a jury that you had a legitimate business venture.  That means all the tell-tale signs of a legitimate business venture have to be there.

Federal Ponzi Scheme Crimes

In other words, you have to have a legitimate bank account.  If it's a property that they're supposedly investing in or some sort of a business, there actually better be a property there, there better be a business there.  You have to have money going into the bank account.

You need to show step-by-step when somebody comes and they give money, show that money goes into the bank account, what that money is being used for.  You also are usually going to want to have a contract with the investor.

These people are not filling out contracts; they are just going by their promises. Obviously, the investor is stupid to get involved in something like that, but it also shows a level of unsophistication, and it helps the government's argument that it's all a big scam or big scheme.

Obviously, if you're investing the money the right way, you've got everything under contract, you have a bank account, you have a corporation, for example, and you can prove where you are investing the money.

Also, how you're investing it, you can show that you are legitimately trying to make money for the investors. You've got an argument, and you have a potential defense that it's not a Ponzi scheme, but instead, it's a legitimate business, and you shouldn't be criminally prosecuted just because things didn't go the right way.

Negotiation with Federal Prosecutor For Best Outcome

What I have you do is come in, and we can talk about it. I encourage you to be honest and give me straightforward information because if you want me to help you now and down the road, I need the truth.

I need to know exactly what happened so I can best defend you and am not caught by surprise when the government is able to show that it truly is a Ponzi scheme six months to a year from now because you're the one who will suffer that scenario.

The government is going to be angry that we didn't try to work out some sort of resolution with them, and they're going to try to get a much harsher sentence than if we had handled it the right way.

So, if you have a situation where you're being charged with some sort of a Ponzi or pyramid scheme by the federal government at the criminal level and you need help, you've come to the right place: pick up the phone.  Ask to speak to Ron Hedding.  We'll get you in for a consultation.  We'll do everything we can to turn the tide in your favor.

Hedding Law Firm is a top-ranked federal criminal defense law firm located in Los Angeles County at 16000 Ventura Blvd #1208 Encino, CA 91436. Contact our office for a free case consultation at (213) 542-0994.

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