In more desperate era, Ponzi schemes skip little old ladies, target men struggling to retire
Wake up and good morning. All this time and we Floridians have missed our biggest growth industry blossoming right under our noses. Alas, it is the Ponzi scheme. (Yes, that's a real shirt available at Zazzle.)
Another cycle of Ponzi schemes starring Floridians has been exposed. The bad news is for every Ponzi scheme (luring new investors with money to pay off old investors thinking they actually are getting a return on a legitimate investment -- until it all collapses) discovered and prosecuted in Florida, I assure you there are dozens more out there yet undiscovered or in the early stages of the big scam.
IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS. Okay, I've said it. Done my duty as a journalist. Folks, please become more skeptical when it comes to investment offerings that offer absurdly high returns in this low-interest rate, struggling economy.
Here's what's new in the Ponzi game: The Victim. According to this South Florida Sun Sentinel piece, consumer watchdogs say scammers increasingly include down-on-their-luck stockbrokers looking to recoup their losses. And the victims tend to be relatively well-educated men, many in their 50s and early 60s, who are desperate or overeager to set up a comfortable retirement.
"Recent research has 'shattered the theory of the typical victim as the little old lady living alone with limited means,' said Gerri Walsh, vice president of investor education at the Financial Industry Regulatory Authority. 'To the contrary, investment-fraud victims tend to be well-educated males who have higher levels of income and education than nonvictims, who also tend to be very self-reliant and confident when it comes to their investments and also have had a recent change in their financial circumstances.'
"Those changes include home foreclosures, lost jobs or dwindling stock investments. Many victims refuse to admit they have been scammed," Walsh told the Sun Sentinel. The story notes the government also launched a website for reporting suspicions: StopFraud.gov.
Here's a rundown of three of the latest Ponzi elites of Florida.
* Two Florida men -- James Davis Risher of Sanibel and Daniel Joseph Sebastian of Lakeland -- are accused of bilking at least 106 people, many of them retirees or teachers in Florida. Risher and Sebastian, a former insurance agent, are accused of raising more than $21 million — and spending most of it on themselves. At promotional events, they dangled the prospect of up to 51 percent returns through a fund dubbed Safe Harbor. At an Orlando resort last year, Sebastian allegedly told prospective investors: "At Safe Harbor, you could retire today, like right now. And I'm telling you, you get rid of the struggle." (Gee, think that kind of promise might be a tip-off this was nonsense?)Here's the Securities and Exchange Commission press release and here is the full 23-page complaint against these two.
* In Mobile, Alabama, a 27 year old Tampa man named Anthony J. “A.J” Klatch II (mug shot, left), is due to be arraigned on federal fraud charges this week. Prosecutors maintain that he defrauded eight investors -- four from the Mobile area -- out of most of the $2.3 million that they gave him in 2009 and 2010, says the local Press-Register newspaper coverage here. "The Mobile federal indictment paints an image of a man living big: Prosecutors seek a court order requiring Klatch to forfeit the $2.3 million that investors paid along with high-priced vehicles that he bought with their money. Among those: an $84,285 2011 Land Rover Range Rover, a $64,295 Land Rover Range Rover Sport Luxury, a $192,000 Ferrari California convertible, a $124,300 Aston Martin Vantage Roadster and a $56,600 BMW M3 convertible," the story reports.
The Tampa man’s legal problems go beyond that. He is named as a defendant, along with four investment companies to which he had ties, in a complaint filed by regulators in New York’s federal court. The civil complaint contends that he solicited $11.3 million from 62 people from 2007 through 2009.
* Finally, on the local scene, Marian Morgan went on trial Tuesday, as jury selection got under way in Tampa federal court. The former Sarasota socialite (photo, right), accused of being the ringleader in a $27 million Ponzi scheme, faces 21 felony counts, including conspiracy, wire fraud, money laundering and tax evasion, says the Sarasota Herald Tribune here. "Morgan's husband, John S. Morgan, indicted on the same 21 counts, pleaded guilty in June to just two counts and promised to cooperate in return for what is likely to be a sharply reduced sentence compared to the sentence his wife could face," the story says. How did Marian Morgan snooker so much money out of more than 100 investors in Canada and the U.S.? By promising ultra-high yields.
Come on, folks, wake up. You can't stop every single Ponzi schemer but stop acting like fish in a barrel.
-- Robert Trigaux, Business Columnist, St. Petersburg Times