Ponzi schemes are generally a type of investment scam in which current investors are paid returns from money contributed by new investors rather than from the profits of the business. The fraudster reports profits to attract new capital, but the Ponzi scheme eventually collapses and investors lose their money when new capital dries up.

Silver Law Group has represented Ponzi scheme victims in many of the largest frauds in the last twenty-five years. Our team of attorneys, forensic accountants and support staff has recovered millions of dollars from Ponzi schemers and in claims against banks, auditors, and law firms for aiding and abetting a Ponzi scheme.

Our law firm is unique in our ability to prosecute these types of cases and frequently work with SEC receivers, bankruptcy trustees, and others to pursue these claims and maximize investors recovery. Our institutional knowledge of the federal securities laws and experience working with receivers and trustees have garnered us a national reputation for expertise in this area.

Ponzi Schemes and Other Investment Frauds

A fraudster operating a Ponzi scheme often convinces a pool of investors to allow them to manage their money, paying a substantial rate of return to the initial investors and uses that success to lure additional investors. When new investors provide capital, the fraudster uses it to continue to pay inflated returns to existing investors.

Over the last twenty-five years, there have been several large Ponzi schemes that caused U.S. investors to lose shocking sums of money. One of the best-known Ponzi schemers, Bernie Madoff, ran a successful Ponzi scheme for over 20 years that defrauded investors of an estimated $65 billion. Silver Law Group has pursued losses in Ponzi schemes which focused on real estate, securities, merchant cash advance and we are now seeing many stories regarding Ponzi schemes using cryptocurrency. Silver Law Group is well-versed in these types of cases, and knows how Ponzi schemes work and how to recoup the money you lost.

How Ponzi Schemes Work

A Ponzi scheme can be successful for as long as new money continues to come in and support payouts to current investors. Successful scammers can operate Ponzi schemes for many years if they are careful to hide the red flags.

The individual profits by charging fees on transactions and, sometimes, account establishment fees. Some operators actually make investments on behalf of customers and reinvest the returns, but payouts are supplemented by capital from new investors.

Ponzi schemes collapse when the fraudster cannot continue paying high returns or honor requests to withdraw funds. In many cases, they steal the investors’ capital and use it to support their lifestyle.

Investor Remedies Against Ponzi Scheme Operators and Others

Getting back the money you lost in a Ponzi scheme is complicated, because often, the perpetrator of the scheme is bankrupt. If they have assets, the government can seize them, liquidate them, and use the proceeds to make partial restitution to scammed investors.

In many cases, the primary wrongdoer, the Ponzi schemer, is facing criminal or regulatory charges or otherwise does not have money to make restitution to the victims. However, Ponzi schemes rarely happen in a vacuum and are only able to succeed because third party professionals knowingly assist the Ponzi scheme or help the schemer breach their fiduciary duty to investors. Our team of attorneys and others have recovered millions of dollars from commercial banks, investment banks, auditors, and lawyers who have knowingly assisted these schemes and other frauds.

Restitution is sometimes managed through a bankruptcy trustee or SEC receiver. Our attorneys frequently work jointly with these professionals or directly for the SEC receiver to help maximize the recovery for the estate.

Learn How To Get Your Money Back From a Ponzi Scheme By Contacting Silver Law Group

When you’re the victim of a Ponzi scheme, it’s imperative to get legal representation. Silver Law Group understands the complexities of getting restitution in these cases and will aggressively advocate for you to obtain the maximum payout possible.

We are skilled investor advocates who have successfully represented defrauded investors nationwide. Reach out today to learn how we can help you.