The Ponzi scheme relies on keeping up an appearance of legitimacy while luring in new investors. Prior investors are paid with the money coming in from new investors, and the scheme continues until the money runs out and the fraudster takes off with your cash. Because they have to rely on investors’ trust to make the scam profitable, Ponzi schemers usually choose their victims carefully.
For the most part, fraudsters who run Ponzi schemes tend to target two main groups:
- People who have already worked with the promoter in legitimate investment activity.Because they have already had a successful business relationship with the promoter in the past, theseinvestors are more likely to take the fraudster’s word for it.
- The friends and family of investors who have already been lured into the scam. When the initial investors start receiving checks, they are encouraged to tell their friends and families about the deal—which really only means more victims are lured into the trap.
It’s important to note that many of the victims of Ponzi schemes are experienced investors who are well aware of the danger of investment scams. Unfortunately, the desire to make more money often trumps reason, and they often already trust the broker or financial adviser who is making the fraudulent pitch.
If you or a family member has become the victim of a Ponzi scheme or investment scam, reach out to an experienced and professional Ponzi scheme lawyer today. You can reach Meyer Wilson to schedule a free and confidential consultation today. We look forward to talking with you about your situation and explaining more about your options for recovering investment losses.