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Assertive Representation In State & Federal Court

What is a Ponzi Scheme?

Investing other people’s money is a risky job to engage in, as many Cincinnati residents might be aware of. Not only does one have to worry about getting people the return they were promised, but one also has to make those returns consistently, which is often not possible. In order to ensure that people are getting their promised returns, some investors might take some extreme steps that could end up turning into financial fraud.

A Ponzi Scheme is one such example where the investor pays the supposed returns to existing clients from funds that were contributed by new members. This means that through a consistent flow of money from new investors, the earlier stage investors are made their payments. According to the U.S. Securities and Exchange Commission, new investors are promised high return with little risk, and they are bolstered by the payments being made to the previous stage people, so new customers get attracted.

What may have started out as a small mistake can end up snowballing, as an individual tries to get everyone their money back. A Ponzi Scheme is a form of investment fraud and if someone is convicted of the crime, they face severe penalties that could even include jail time. However, proving these cases requires investigators and prosecutors to establish their case with often complicated facts and theories.

In order to prove any form of embezzlement though, the prosecution must prove all the elements of the crime. Therefore, Cincinnati residents accused of committing financial fraud should consider consulting an experienced defense attorney to aggressively attack the prosecution’s case.