Federal Crimes Blog

Federal Ponzi Scheme Crimes

Posted by Hedding Law Firm | Jul 22, 2020

A lot of people nowadays are getting entrapped in the government's net of prosecuting the so-called Ponzi schemes.  Basically, it is where people are purportedly involved in some sort of a legitimate business venture and they end up taking investors.

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

To give readers a better understanding about Ponzi Schemes, our federal criminal defense attorneys are providing a review below.

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 and the person who is in charge of the Ponzi scheme is taking the money for themselves.

Maybe giving 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 that's purportedly in charge of it, and ultimately what ends up happening is, the Ponzi scheme comes collapsing down.

The person who invested the money ends up getting either a very small dividend or no dividend at all, and 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 to a Ponzi scheme offense, you're going to have to show the government and/or 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 that are not filling out contracts, that are just going by their promise, obviously the investor is stupid to get involved in something like that, but it also shows a level of unsophistication and it helps the argument for the government 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, then 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 you come in and we talk about it.  I encourage you to be honest and give me the straight-forward information because if you want me to help you now and down the road, I need the truth.

I need exactly what happened so I can best defend you and I'm not caught by surprise by the government being able to show that it truly is a Ponzi scheme six months to a year from no because you're the one that will suffer in that scenario.

Because the government is going to be angry that we didn't try to work out some sort of a resolution with them and they're going to try to get a much harsher sentence than if we would have 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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