Complete Coverage: Local Ponzi investigation
A local couple allegedly swindled "north of $50 million" from more than 200 Miami Valley investors in Ponzi-type financial pyramid schemes to fund an extravagant lifestyle that included buying racehorses, luxury cars and a $1 million farm in Clark County, according a federal court document and the Federal Bureau of Investigation.
Coverage of the investigation
Key documents
- Application for seizure warrant
- Verification and affidavit in support of complaint
- Creditors' petition for unpaid claims
Excerpts
In its application for a seizure warrant, the FBI describes key points in its case:
- How a pyramid scheme works
- Investigation key points summary
- An alleged victim's story
- An alleged victim's story
Ponzi schemes data
Ponzitracker.com maintains a database of Ponzi schemes uncovered or sentenced in the "Madoff era."
- 8Cases in Ohio
- 83Cases in California,
most in the U.S. - 120Most common sentence,
in months - 149Average sentence,
in months (386 cases) - $194MTotal losses
in Ohio cases - $65.9BTotal losses
Brief history of Ponzi scheme
Boston businessman Charles Ponzi is the scam's namesake, but he wasn't its original practitioner. According to Mitchell Zuckoff, a Ponzi biographer, the reigning king of the "rob Peter to pay Paul" scam was a New York grifter named William Miller, who bilked investors out of $1 million - nearly $25 million in 2008 dollars - in 1899.
After drumming up interest by claiming to have an inside window into the way profitable companies operated, Miller salted his scam by paying out the first few investors. After his racket was exposed by a newspaper investigation, he was sentenced to 10 years in prison.
Ponzi was an Italian immigrant who, in 1919 and 1920, coaxed thousands of people into shelling out millions of dollars - including a staggering $1 million in a single three-hour period - to buy postage stamps using international reply coupons. This strategy, Ponzi promised, enabled one to purchase postage at European currencies' lower fixed rates before redeeming them in U.S dollars at higher values.
Source: Time.com
Spotting a con
- Con artists do not like to be found
- They dress for success
- They often push poorly understood financial products
- They bring out the worst in you
- For every silver lining, there is a cloud
- Watch out for the Ponzi schemes
- Steer clear of pyramid schemes
Quotes to watch out for
- "Your profit is guaranteed."
- "It's an amazingly high rate of return."
- "There is no risk."
- "You can get in on the ground floor."
- "The offer is only good today."
- "I'll get you the paperwork later."
- "Just make your check out to me."
- "You would be a fool to pass this by."
Tips on how to avoid scams
- Contact the Ohio Division of Securities at (800) 788-1194, the investor protection hotline at (877) 683-7841 or www.com.ohio.gov/secu to see if the investment vehicle and the person selling it are registered.
- Get in touch with the Better Business Bureau and ask if they have any complaints on file for the venture’s promoters or principals.
- Deal only with financial advisers, broker-dealers or financial institutions that have a proven track record.
- Ask for written information on the investment product and the business. Such information, including financial data on the company and the risks involved in the investment, is contained in the prospectus.
- Steer clear of investments touted with no downside or risk.
If you think you've been a victim of securities fraud, call the Ohio Dept. of Commerce Division of Securities at (800) 788-1194 or visit www.com.ohio.gov/secu. The division's Investor Protection Hotline is (877) 683-7841.
Sources: Ohio Dept. of Commerce
Top: Photos are examples used in court documents of the Apostelos' assets, which according to the FBI were acquired "despite the meager income" they reported and "significant losses suffered by their business."