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Assertive Representation In State & Federal Court

Pyramid and Ponzi schemes could lead to investment fraud charges

We’ve all heard of scammers using pyramid or Ponzi schemes as a way of taking advantage of hopeful, unsuspecting investors to get rich. What you may not know is that there are many laws in place in Ohio that prohibit these fraudulent activities.

Under the Ohio Anti-Pyramid Sales Act and Business Opportunity Purchaser’s Protection Act, as well as many other fraud laws, pyramid and Ponzi schemes are considered fraudulent investment operations and forms of embezzlement and those running these operations could be charged with a misdemeanor or felony.

Pyramid and Ponzi schemes are both forms of securities fraud that are prohibited by the Anti-Pyramid Sales Act. Pyramid schemes generally require someone to invest money in an operation for the mere opportunity to earn returns on their investment. Generally, those in charge will take in money from new investors and use that money to pay off earlier investors. Those participating in the pyramid scheme are mostly aware that they will only earn returns on their investment if they bring in new participants.

Those in charge of a Ponzi schemes on the other hand generally tell investors that they are investing in something and that they will earn quick returns on their investment. Those participating don’t typically have to do much more than hand their money over to the person in charge of the scheme, but the risks can be much greater.

If you are convicted of investment fraud in Ohio, you could face a number of legal consequences including prison time, probation, fines, community service, freezing of business assets, and business license revocation. If you have been criminally charged for your alleged involvement in a pyramid or Ponzi scheme, consulting with a criminal defense attorney may be the best way to protect your rights.