What is a PONZI scheme?
Have you lost money in a PONZI scheme? Do you suspect that what you thought was a legitimate investment may be a PONZI scheme?
PONZI schemes typically promise attractive returns through legitimate investing. However, the scheme actually relies on new investors to provide new money, which is used to pay earlier investors. When there are not enough investors available to pay the promised return the scheme falls apart. People lose money.
Warning signs of a PONZI scheme
- The promised return seems too good to be true.
- Returns are very consistent, which is unusual particularly for higher returns.
- Limited ability to withdraw cash.
- Non-standard assets that may not be easily transferred, valued or liquidated.
MetLife PONZI scheme case
In 2016, a Los Angeles Superior Court jury awarded $15.6 million to a grandmother who lost her life savings in a bogus investment fund that was offered by a MetLife insurance agent.