Ponzi Scheme Defense

Defense for Ponzi Scheme Accusations

  • The defense attorneys at Oberheiden, P.C. regularly advise clients on unfair and unsubstantiated allegations of Ponzi schemes.
  • We represent small and large corporations and have the extensive training and experience to defend our clients with the utmost care, persistence, and diligence.
  • Consider placing a well-qualified defense attorney on your side today to work on your Ponzi scheme defense and give you the best chance of success at every stage of the investigation and litigation process.

Experienced Defense Team

If you have been charged or are being investigated in connection with a Ponzi scheme, now is the time to take prompt action in your defense.

The SEC has increased its aggressive enforcement efforts against companies or individuals suspected of engaging in Ponzi schemes, especially in relation to digital currencies and online exchanges of value.

Federal agencies such as the SEC have made it a priority to seek out perpetrators of Ponzi schemes and hold them publicly accountable for their actions. This could result in unfair accusations leading to significant jail time and criminal penalties.

You need an individualized defense strategy. Do not wait to get in touch with an experienced defense attorney today.

A charge against you has the power to shut down your life’s hard work and your company itself. It is critical now more than ever to understand your rights and to have the right attorneys on your side.

Oberheiden, P.C. has the right attorneys to successfully defend you against unsubstantiated charges of a Ponzi scheme. Our attorneys include former FBI agents, former U.S. attorneys, and former prosecutors. This blend of highly qualified attorneys gives you the best chance of success. We can provide your defense with the utmost care and diligence.

The stakes are high. Call Oberheiden, P.C. today. We are on your side and we will fight for your liberty and reputation.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

What is a Ponzi Scheme?

Named after the notorious Charles Ponzi from the 1929s, a Ponzi scheme is a scam that promises high rates of returns for investors and little risk to those investors.

Companies engaging in Ponzi schemes focus their efforts in obtaining new investors to add to the investments. An organizer of a Ponzi scheme solicits new investors by promising to use the investors’ funds in lucrative projects with little risk. The new income from the new investors is used to pay the original investors their returns. This income is typically noted as profit.

In other words, the Ponzi scheme generates returns for the original investors from the investments of the new investors. In reality, the disbursements to the old investors are not legitimate returns but are instead simply the capital contributions of the new investors.

A Ponzi scheme is dependent upon acquiring new investors to continue paying the returns of the old investors. Without a steady inflow of new investors, the old investors will not get paid their “returns” and then Ponzi scheme falls apart. For instance, if a large number of investors wish to cash out or if new investors cannot be found, the Ponzi scheme fails.

In the following sections, we will explain the warning signs of a Ponzi scheme, some types of Ponzi schemes, how investigations work, and what you can do to protect yourself.

Warning Signs of a Ponzi Scheme

The SEC lists several red flags or warning signs that investors should be on the lookout for:

  • high investment returns with little or no risk,
  • overly consistent returns,
  • unregistered investments,
  • unlicensed sellers,
  • secretive and/or complex strategies,
  • issues with paperwork,
  • difficulty receiving payments

If you suspect that you or your company are being targeted in connection with a Ponzi scheme, get immediate help to prepare your defense. In many cases, there are steps that dedicated defense attorneys can take before an investigation is first initiated by the SEC.

What is a Smart Ponzi?

With the introduction of cryptocurrencies, a new form Ponzi scheme developed – the Smart Ponzi. A Smart Ponzi uses digital assets to carry out its plan. Because Smart Ponzi are a relatively new form of Ponzi scheme, there is a lack of consistent and developed regulation by federal agencies.

A Smart Ponzi often utilizes an initial coin offering (ICO). An ICO is the virtual equivalent of an initial public offering (IPO). Unlike an IPO that offers shares, the ICO offers crypto tokens. These tokens are used in the same manner as stock such as by acquiring an interest in a firm or purchasing other products and services.

Other than the differences above, a Smart Ponzi operates similarly to a regular Ponzi in that the scammer redistributes the tokens it claims from the new investors and gives it to the old investors as “profit” or “returns.” Instead, a profit is never really realized.

As long as there is a steady flow of individuals or entities buying into the crypto token investment, the Smart Ponzi scheme can continue. As soon as the scammer runs into difficulties in finding new investors to keep the scheme running, the Smart Ponzi falls apart.

What is a Pyramid Scheme?

Pyramid schemes and Ponzi schemes are very similar and contain many of the same basic features such scamming innocent investors into making investments in the hopes of returning a profit.

But there are also differences that we should note. In a Ponzi scheme, investors give money to the scammer, usually some kind of portfolio manager, in exchange for returns on their investment. The old investors are paid returns from the incoming funds of the new investors.

In a Pyramid scheme, the initial scammer solicits other investors, who in turn solicit other investors. Those other investors solicit further investors and so on and so forth. The later joining investors pay the person who solicited them.

Pyramid schemes are complicated because the later-involved investors inevitably become a part of the scheme. The Pyramid scheme will continue to generate profit as long as investors recruit subsequent investors and so on. As soon as the Pyramid scheme is unable to generate more investors to its pyramid, the scheme fails.

How Ponzi Scheme Investigations Work

Ponzi scheme investigations may begin as either sole or joint efforts between federal law enforcement agencies. The SEC often coordinates parallel investigations with other agencies such as the FBI or the DOJ.

The SEC makes it very easy for suspicious investors to report suspected Ponzi schemes by providing a direct phone number on its website along with a link to submit a tip to the SEC for possible investigation. If you think you may be the target of an impending investigation, you do not have to wait for an investigation to begin to seek legal help.

Further, the SEC maintains a Whistle-blower Program where individuals can receive substantial monetary awards for reporting suspected Ponzi schemes if the investigation leads to a successful enforcement proceeding.

If you have been charged or suspect you are under informal or formal investigation, get the advice of an expert defense attorney today.

How to Respond If You’ve Been Charged/Arrested in connection with Ponzi Scheme

Ponzi schemes can be elaborate and complex. Coupled with a formal investigation or indictment, the public outcry and media attention can transform a legitimate company into a distrusted entity. Further, the increased efforts of federal law enforcement agencies make it more likely that companies with suspected illicit behavior will be investigated.

Do not wait for an investigation to begin. Do not risk substantial criminal penalties and jail time. Protect your company, liberty, and reputation.

Do not divulge any information to a federal agent without first discussing with your attorney. Make sure you have your attorney present in all communications with federal law enforcement authorities.

At Oberheiden, P.C., our defense attorneys are highly skilled at preparing defense work for complex Ponzi scheme allegations. We pride ourselves in diligent defense preparation and aggressive trail defense strategies. Our attorneys have an impeccable record and the resources needed to give you a successful outcome.

Call us today or contact our office for a free consultation and protect your company.

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