June 16, 2024

John Michael Thibodeaux Arrested Over Alleged Ponzi Scheme

John Michael Thibodeaux, a 44-year-old resident of Belle Rose is under arrest on suspicions of operating a Ponzi scheme. According to Assumption Parish Sheriff office spokesman Lonny Cavalier, they’ve been investigating Thibodeaux for the past five months, with other potential victims emerging since his arrest.

The analogy used to describe the nature of Thibodeaux’s actions is ‘robbing Peter to pay Paul’. Notably, most of the victims were his acquaintances.

On Friday, an arrest warrant was issued in relation to this case. Cavalier mentions that there are at least five more victims. The stolen amount is expected to exceed a quarter-million dollars, although the exact figure is still unclear.

The suspicion arose when victims stopped receiving interest payments after a few months, while some never received any payments at all. Thibodeaux couldn’t provide any financial records upon demand, making it evident he didn’t have an E-trade account.

In light of the situation, Cavalier urges the public to be vigilant, particularly when an investment opportunity appears too profitable.

He touches on the fact that the highest rates on CDs are around 5.25%, so when someone promises interest rates of 10, 12, or 15 percent, it should be seen as a red flag. These percentages are unrealistic in the current market.

According to Cavalier, all known victims were Thibodeaux’s personal friends. As a result, Thibodeaux was charged with theft and the illegal promotion of a pyramid scheme.

Frequently Asked Questions

What is a Ponzi Scheme?

A Ponzi scheme is a form of investment fraud that pays returns to earlier investors using funds contributed by newer investors. Operators of such schemes usually promise high returns with little risk. However, they do not invest the money but use it to repay earlier investors or fund a lavish lifestyle. Ernesto Ponzi was the infamous mastermind behind such a fraudulent system.

How can one spot a Ponzi scheme early?

Many Ponzi schemes seem too good to be true. So it’s wise to remain vigilant when someone promises you high returns for little or no risk. Also, be cautious when facing increasing pressure to recruit new members. Lack of official documentation or promised payments falling through are other indicators that one might be involved in a Ponzi scheme.

What actions should one take if they are involved in a Ponzi scheme unknowingly?

If you suspect you have fallen victim to a Ponzi scheme, you should report it to your local law enforcement agency and regulatory bodies. Gather as much information and evidence as possible regarding the fraud. It’s also advisable to contact a lawyer for advice on possible recourse.