Monday, February 02, 2009

The Elderly May be Targeted by Some Ponzi Schemes

The term “Ponzi Scheme” derives from a financial fraud perpetrated by con man  Charles Ponzi, where he promised investors very high returns in a relatively short period of time.  The initial investors are actually paid their returns from subsequent investment victims.  Because these schemes entice the investor with tempting and remarkable profits, they usually involve a proposition that is difficult to understand or vague in its description.

 A Wall Street Journal article reports that the number of alleged Ponzi Schemes has mushroomed since the Bernie Madoff scandal.  The reason for the proliferation is that financially-strapped investors are trying to access their assets.  Also, the inevitable failure of this type of pyramid scheme is accelerated when new investors are difficult to lure.  The poor economy is like fuel to the fire.

 A troubling detail of the article is that many of the victims are the elderly.  People who will likely need access to their nest egg in the near future and will not be able to work to try to rebuild any wealth.  In the meantime, the predators typically enjoy a lavish lifestyle.

If you personally are approached by someone offering incredible returns with little or no risk, recall the old saying “if it sounds too good to be true, it probably is.”

3 comments:

Elaine Renoire said...

The elderly are also often targeted by the system claiming protection.

NASGA is an organization of victims and families working to expose and end unlawful and abusive guardianships/conservatorships -- a growing national epidemic.

Guardianship wards are stripped of all rights: the right to decide where to live and whom to associate with, how to spend (or save!) ones own money, to accept or refuse medical treatment -- or even ask for a second opinion, marry, vote, etc. Most important, wards are stripped of the right to complain.

With the fox guarding the henhouse and the hens muzzled, guardians and their attorneys can easily unjustly enrich themselves at the expense and to the detriment of the very person they have been court-appointed to protect.

Visit NASGA at StopGuardianAbuse.org and NASGA’s blog at http://NASGA-StopGuardianAbuse.blogspot.com for more information.

Yours,
Elaine Renoire
NASGA

Bradley Wrightsel said...

Elaine,

You make a very good point. Regardless of whether your talking about a guardian, an agent under a power of attorney, a trustee or some other type of fiduciary, there is the possibility of abuse or exploitation. I appreciate your taking the time to read the post and comment.

Regards,

Bradley Wrightsel

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