June 16, 2024

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The law has caught up with a fraudster who managed a successful scam for five years, cheating investors and leading a luxurious lifestyle.

Frequently Asked Questions

What is a Ponzi scheme?

A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The scheme generates returns for earlier investors by acquiring new investors.

How can one spot a Ponzi scheme?

While it’s not always easy, one of the biggest red flags is the promise of high returns with little to no risk. Also, Ponzi schemes generally depend on a constant flow of new investments to continue to provide returns to older investors.

What happens when a Ponzi scheme falls apart?

As the scammer struggles to recruit new investors or when a large number of investors ask to get their money back, that’s when the scheme could likely fall apart. At that point, the fraudster will vanish, often taking all the remaining investment money with them.