"For a few months in 1922, throngs of America’s youth — from schoolkids to shopgirls — were swept up in a leaderless pyramid scheme that promised “something for nothing” and encouraged promiscuous flirtation. These were the “Shifters.” This is their (brief) story." (NYTimes link) Previously on the flappers and flapper slang: 1, 2.
U.S. Alleges Full Tilt Poker was Ponzi Scheme. The Justice Department has filed suite against popular online poker site Full Tilt Poker, asserting that money players believed to be stored in their accounts was actually diverted to the site's owners, with money from new players being used to pay off bets when necessary. Reaction from the poker community when the site was first shut down in April. Reaction now. Always good for a contrarian spin, Deadspin says the Ponzi scheme is really all the Justice Department's fault.
Phaser Inc., a trading company in space-based MMO EVE online, have absconded with a record-breaking 1 trillion ISK and revealed themselves as a giant ponzi scheme in a remarkably frank open letter. Their haul of the in-game currency translates to just over $50,000, or 242 years-worth, of PLEX (traded for playing time). [via RockPaperShotgun] [more inside]
On July 23, 1920, Charles Ponzi hired former Boston Post journalist William H. McMasters as his publicist, who quickly realized that his new client was defrauding the public. Just ten days later, McMasters wrote an exposé published in the Post that led to Ponzi's ultimate downfall. The newspaper won a Pulitzer. McMasters was The Man Who Time (Almost) Forgot (Via) [more inside]
The Growth Ponzi Scheme, a series of five blog posts on the financial underpinnings (or lack thereof) of the American post-war development pattern. 1: The Mechanisms of Growth - Trading near-term cash for long-term obligations. 2: Case studies that show how our places do not create, but destroy, our wealth. 3: The Ponzi scheme revealed - How new development is used to pay for old development. 4: How we've sustained the unsustainable by going "all in" on the suburban pattern of development. 5: Responses that are rational and responses that are irrational.
Monday, December 6, 2010: WASHINGTON— “Attorney General Eric Holder announced today the results of Operation Broken Trust, a nationwide operation organized by the Financial Fraud Enforcement Task Force to target investment fraud. To date, the operation has involved enforcement actions against 343 criminal defendants and 189 civil defendants for fraud schemes that harmed more than 120,000 victims throughout the country. The operation’s criminal cases involved more than $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. Operation Broken Trust is the first national operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.” —Or, well, maybe, perhaps, not so much. [more inside]
Bernie Madoff - Free At Last While incarcerated for 150 years for a $65 Billion dollar Ponzi scheme, Berine Madoff creates his own version of the events that led to his arrest and becomes a local celebrity at the Butner Federal Correctional Complex. (via metachat)
An Australian Madoff? Trio Capital, an Australian fund manager, has been ordered to wind up its funds after being unable to account for $123 million in its Astarra fund since investigations began in October. The fund "has a total of $426 million under management - including superannuation savings of about 10,000 Australians." Some worry what this means for more potential frauds in Australia's "privatized social security." [more inside]
If the Government is running a larger than usual Ponzi scheme, then developing your own abilities to launder money cannot be far behind. So, how would I go about laundering money?
Wall Street legend Bernard Madoff arrested over '$50 billion Ponzi scheme'. His company's website has a court announcement on the front page, but you can still find the old promises inside.
"As no rational agent would be willing to take part in the last round in a finite economy, it is difficult to design Ponzi schemes that are certain to explode. This paper argues that if agents correctly believe in the possibility of a partial bailout when a gigantic Ponzi scheme collapses, and they recognize that a bailout is tantamount to a redistribution of wealth from non-participants to participants, it may be rational for agents to participate, even if they know that it is the last round. We model a political economy where an unscrupulous profit-maximizing promoter can design gigantic Ponzi schemes to cynically exploit this "too big to fail" doctrine." [more inside]
Would you trust this man with your life's savings? Successful entrepeneur and president of Trans Continental Airlines cum boy band svengali, Lou Pearlman was the guiding hand behind N'Sync, the Backstreet Boys, and O-Town. Now, however, he's on the lam, wanted by the FBI for swindling old folks out of $317 million. Pearlman was last seen in Berlin on February 1st; as he sat in a crowded theater watching his latest creation, the German boy band US5, win an international pop award, FBI investigators were already combing through his Florida home and offices.
Herbalife to be bought for $685M. Does anyone else find this disturbing given the information revealed in this previous thread?
Earthlink founding investor Reed Slatkin to plead guilty of defrauding over 800 people out of $254 million in a Ponzi scheme. Several of the victims were members of the Church of Scientology, where he was a minister. Oh, and he filed for bankruptcy too so there's no chance for reparations... I don't know how to feel!