Increase in Number of Ponzi Schemes

City regulators have quadrupled the size of the investigation team looking at Ponzi frauds after a large increase in the number of cases.

The FSA that it had recorded a 190 per cent rise in intelligence reports of “illegal deposit-taking” since last year, much of it Ponzi-style frauds of the type that came to prominence in the trial and conviction of Bernard Madoff.

The Ponzi scheme is a relatively simple but hard to detect fraud in which high-value investors are personally invited to join a small group that offers big returns but operates by siphoning off money from new clients to make bogus interest payments to established clients.

City of London Police are investigating two cases in which sports personalities are known to have lost substantial amounts. There is also concern that people who have received big redundancy cheques are being pursued by a new wave of Ponzi fraudsters.

Frenkels can assist in all types of fraud investigations and have specific experience of Ponzi schemes.  For more information, please contact John Frenkel or Vivian Cohen.

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