MetaFilter posts tagged with ponzi

Oh those crazy kids!

OmieWise — Thu, 06 Dec 2012 05:21:46 -0800

"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.

Full Tilt Ponzi

escabeche — Tue, 20 Sep 2011 22:00:27 -0800

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.

We don't have to worry about ISK for a very long time, now.

Drexen — Sun, 21 Aug 2011 08:21:36 -0800

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] Say the scammers: "It's been a journey for all of us. Some people trusted us. Others didn't but accepted the risks. Yet, other people were skeptical at first, but became convinced by friends and testimonials (those were all genuine by the way). Everyone has his/her own Phaser Inc. experience. A couple of you withdrew your ISK this week - just in time. Probably some of you were just about to do it, but forgot to send the mail, and are a little too late now; all part of the experience." Eve News 24 have the numbers, and the text of the in-game announcement. "You’ve invested it, got a chance on some profit, but it turned out to be not the best choice you’ve ever made. That’s how investing works. At least, that’s how it went for the most of you." Previous notable events in EVE include: * 800 billion ISK of hardware and cash stolen from Titans4U by one "Bad Bobby". * A vast fleet battle in February, with around 1 trillion ISK of ships destroyed. * The destruction of the Band of Brothers alliance by the SomethingAwful-based Goonswarm in early 2009. * The in-game massacre and theft of 30 billion ISK by the Guiding Hand Social Club. In-game scams, spying and sabotage are 'legal' and allowed by the makers of the game as long as they don't involve account-hacking or real-world illegal activity.

"I do not anticipate that another Charles Ponzi will ever appear in the financial world"

zarq — Wed, 10 Aug 2011 07:24:53 -0800

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) Mentioned in the article is this one, from 2009 in The New York Times: Lost Manuscript Unmasks Details of Original Ponzi Background on Ponzi Schemes. Fraud Magazine has a blog entry on their story.

The Growth Ponzi Scheme

parudox — Thu, 23 Jun 2011 11:08:46 -0800

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.

If it bends, it’s funny.

kipmanley — Thu, 09 Dec 2010 09:10:49 -0800

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. Ryan Chittum at the Columbia Journalism Review summarizes the findings of a couple of reporters who’ve spent the past few days digging into these claims: “The New York Times’s Andrew Ross Sorkin called out Eric Holder’s Justice Department on Monday, noting that the 343 criminal defendants it said it’s prosecuting in a sweep it lamely calls Operation Broken Trust are small fry. No executive from the major corporations (like, oh, AIG, Lehman Brothers, Washington Mutual, Countrywide, Ameriquest, etc.) has yet been charged.

“[Shawn J.] Chen [a partner in the Washington office of Cleary Gottlieb Steen & Hamilton] went so far as to suggest that the number of cases Mr. Holder cited as evidence of the department’s crackdown were somewhat fictional. “‘It’s hard to believe that they built up all these cases in the past four months,’ since the task force was created, Mr. Chen said, suggesting it was more likely that Mr. Holder counted every case that had anything to do with financial fraud and put them all under the Operation Broken Trust umbrella.”

And also: “Bloomberg’s Jonathan Weil comes along today with an outstanding column further proving that the feds are full of it...

“The statistics looked squirrely on their face. Some of these cases began years ago, long before the multiagency task force was formed. It’s obvious what the prosecutors did here, too. First they tracked down every small-fry Ponzi scheme, affinity fraud and penny-stock pump-and-dump they could find that had advanced through the courts since mid-August. Then they totaled them up and called it a sweep, lumping together cases that had nothing to do with each other[...] “For instance, the list said a fellow named Lorenzo Altadonna had been convicted in the Western District of New York on Oct. 27. Actually, he was sentenced to three years probation on Aug. 5, court records show. That was 11 days before Operation Broken Trust began, which means the task force shouldn’t have counted him in its results, even by its own loopy methodology. Finelli said Altadonna was included mistakenly. “The first page of the list also showed a Nov. 8 federal conviction in New Jersey of a man whom I won’t name here. There was no record for him on Pacer, which is the government’s online database of federal court proceedings. But I did find an Oct. 13 article in the Daily Record of Parsippany, New Jersey, about a fraud at an insurance agency where a person with the same name had worked. The article said he had not been charged criminally. Finelli declined to comment on why he was included in the task force’s list of defendants.”

“People are not going to befriend you unless there is something in it for them”

The Whelk — Mon, 07 Jun 2010 09:49:12 -0800

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)

Australia's own Madoff affair?

FuManchu — Sun, 21 Mar 2010 15:01:51 -0800

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." The Syndey Morning Herald has more: the initial scrutiny, the whistleblower, the fears, hope fades. John Hempton, blogger and hedge fund manager based in Australia, notified the Australian Securities and Investments Commission (ASIC) in September. He outlined his story of delving into the problems in a January post, explaining to non-Australians how the Superannuation system (privatized Social Security) makes this fraud a significantly bigger story. Dominck McCormick, the fund manager who initially tipped Hempton, has written a fantastic summary of what red flags existed, the role of due diligence, and how the financial planning industry can move forward. Hempton has an eye for frauds. He previously tussled with hedge fund Ponta Negra, whose manager recently plead guilty to defrauding investors. Ponta Negra shared an office and marketer with Paradigm Global, a fund of hedge funds owned by the son and brother of U.S. Vice President Joe Biden. Hempton had found connections between Paradigm and other questionable funds. This included several connections to eccentric Allen Stanford's Stanford Financial Group, which remains frozen and under investigation for fraud. Hempton first investigated Astarra because of its connections to Paradigm. Other links at Hempton's blog discussing Astarra: Astarra Marketing, Submission to the Superannualtion review discussing industry structure and regulations, The Regulator's Culpability, Debating accusations of jealousy. (Hempton was previously linked to on the blue for an interesting index proposal)

We are all Madoffs

mareli — Tue, 01 Sep 2009 07:12:22 -0800

David P. Barash argues that our addiction to economic growth is a Madoff/Ponzi scheme.

So, how would I go about laundering money?

wallstreet1929 — Sat, 17 Jan 2009 07:09:05 -0800

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?

Madoff Securities: Quality Executions and Service Through Innovative Technology

445supermag — Fri, 12 Dec 2008 20:50:02 -0800

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.

Ponzi Scheme, Credit Default Swaps in 2004 vs. 2008

Rafaelloello — Tue, 23 Sep 2008 03:46:05 -0800

"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." Sounds like something written this month in New York? Nope. The correct answer would be Bloomington, Indianna in 2003 Utpal Bhattacharya wrote On the Possibility of Ponzi Schemes in Transition Economies in 2001, but the above quote is from The Optimal Design of Ponzi Schemes in Finite Economies in 2003. Bhattacharya's proof works only where more than half the population takes part (hmm... How many people own homes?) Despite the Enron collapse and the published works of scholars like Bhattacharya, The $3.5 Trillion CDS market was still viewed this way in 2004. The current (collapsing) $64 Trillion CDS market is viewed a little differently in 2008. BTW, as of Yesterday, New York is going to try to regulate the CDS market. Good Luck NY.

Lou Pearlman's Ponzi Scheme

billysumday — Tue, 17 Apr 2007 08:31:25 -0800

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.

bkdelong — Thu, 11 Apr 2002 06:08:09 -0800

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

kfury — Wed, 27 Mar 2002 16:22:27 -0800

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!