Ponzi County

[Coach McGuirk]

Dear Utah County residents,


If you here the word "Downline" when being asked to invest in a project, you can be assured that your money is not coming back. Could you please stop.

TIA!


Coach

Fraud probes such as this are keeping investigators busy. Victims of fraud in Utah County alone lost $64 million in 2008 and have lost $76 million so far this year. That's a spike from $45 million in the previous two years combined.

http://www.deseretnews.com/article/705339222/Scam-59M-down-drain.html

So this Ponzi raised $59M with $53.1M coming from the UC.

[wuapinmon]

Dear Utah County residents,


If you here the word "Downline" when being asked to invest in a project, you can be assured that your money is not coming back. Could you please stop.

TIA!


Coach

http://www.deseretnews.com/article/705339222/Scam-59M-down-drain.html

So this Ponzi raised $59M with $53.1M coming from the UC.

Given the high level of education in that county, that's fairly shocking. I'd love to see two business courses added to core requirements: Personal Finance, and Investing. Even if they were one-hour classes, I think that info could save some heartache.

[Coach McGuirk]

Given the high level of education in that county, that's fairly shocking. I'd love to see two business courses added to core requirements: Personal Finance, and Investing. Even if they were one-hour classes, I think that info could save some heartache.

yes, and maybe they could teach me to spell "hear".

[BigPiney]

yes, and maybe they could teach me to spell "hear".

there, their, they're. It is all the same to me.

[Uncle Ted]

Ponzi County is getting larger...


Father and Son Convicted of Operating $100 Million Ponzi Scheme That Targeted Members of the Church of Jesus Christ of Latter-day Saints

Guy Andrew Williams, 42, and Brent F. Williams, 66, both of Mesa, Arizona, were convicted by a federal jury in Phoenix on June 28, 2013, of 38 counts of conspiracy, wire fraud, mail fraud, and money laundering. The two-week trial was conducted by U.S. District Judge Jack Zouhary, a visiting judge from the Northern District of Ohio.


U.S. Attorney John Leonardo stated, “Affinity fraud is a particularly reprehensible crime because it depends upon a betrayal of trust to defraud victims of their money. The defendants preyed upon those with whom they made connections through church or in the community. This verdict holds the defendants accountable for their crimes and sends a message to others who would engage in such misconduct.”


FBI Special Agent in Charge Douglas G. Price, Phoenix Division, stated, “The guilty verdict rendered in this matter holds Guy and Brent Williams accountable for their actions. The FBI and the IRS are committed to investigating and pursuing those who conspire and prey on trusting individuals for their own personal gain. The FBI and our law enforcement partners will continue to combat fraud as it relates to money laundering, wire and mail fraud.”


“The defendants lived lavish lifestyles and enriched themselves at the expense of their unsuspecting investors. This classic Ponzi scheme serves as an unfortunate reminder that everyone should exercise extreme caution before committing their hard-earned money to investment opportunities that promise returns that sound too good to be true” said Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of Internal Revenue Service, Criminal Investigation.


“This verdict should serve as a strong deterrent to others who would misuse our nation’s mail system to commit mail fraud,” said Acting Phoenix Division Postal Inspector in Charge Adrian Gonzalez. “The United States Postal Inspection Service remains dedicated to our mission to enforce the laws that defend the nation’s mail system from illegal use and ensure public trust in the mail. Postal inspectors will continue to partner with fellow law enforcement agencies to bring those perpetuating fraud to justice.”


According to the evidence at trial, Guy Andrew Williams and his father, Brent F. Williams, served as the managing director and chief financial officer, respectively, of a group of Mesa, Arizona-based investment funds known as the “Mathon” entities. The evidence at trial showed that the Mathon entities collected more than $100 million in funds from investors from February 2002 until April 2005.


The evidence at trial further showed that Mathon’s investors, the majority of whom were members of the Church of Jesus Christ of Latter-Day Saints and hailed from Arizona, Utah, and Nevada, were generally told that their money would be used to make short-term loans to third-party borrowers at a high interest rate and that Mathon had an extensive track record of making such loans. In fact, the evidence at trial showed that the defendants and their business partners ran Mathon as a Ponzi scheme—that is, by using the overwhelming majority of incoming money from new investors to pay back initial investors. Finally, the evidence at trial showed that the defendants and their business partners paid themselves extravagant salaries and bonuses exceeding $10 million and also used their investors’ money to make millions of dollars of “loans” to companies they secretly controlled.
[...]

http://www.fbi.gov/phoenix/press-releases/2013/father-and-son-convicted-of-operating-100-million-ponzi-scheme-that-targeted-members-of-the-church-of-jesus-christ-of-latter-day-saints

[Jeff Lebowski]

Pretty sure my neighbor tried to get me to invest in that one. They were promising a modest 40% annual return on your investment.

[Uncle Ted]

Pretty sure my neighbor tried to get me to invest in that one. They were promising a modest 40% annual return on your investment.

40%?!? Not even Goldman Sachs promises 40% and they pretty much own all the politicians.

[PaloAltoCougar]

A former member of our HP Group is spending some time in the federal slammer for a Ponzi scheme that hooked local members, among others. His partner, the ringleader of the scheme, was sentenced last month, but they only promised a 36% return. I'm working with a few members whom the court-appointed receiver has demanded that they return some or all of the money the wrongdoers gave them while the scheme was running.

People who are tempted by these kinds of deals need to know that even if they happen to be one of the early investors and they see some profits, they'll be required to return the money they were lucky enough to have received.

[Indy Coug]

If you invest because someone promises 30%, 40%, 50% or more in annual returns, you deserve to lose every penny you have.

[Jeff Lebowski]

40%?!? Not even Goldman Sachs promises 40% and they pretty much own all the politicians.

Yeah, it was so absurd that I called a friend of mine that works for the FBI. He referred me to a guy who works for the SEC. We had a long (and fascinating) conversation. He said that they had this group on their list but their list was a mile long and with their budget and manpower they just couldn't investigate everything in a timely fashion. He called me back a week later and asked for a few more details and said that they were going to try to dig into it. It could be a different group but the location (Mesa), time frame, and everything else fits.

FTR, my neighbor wasn't prosecuted. He was just a low-level chump.

[Jeff Lebowski]

If you invest because someone promises 30%, 40%, 50% or more in annual returns, you deserve to lose every penny you have.

I kept telling my neighbor that 40% was absolute proof that it was a fraud and that he should step back and not have anything to do with it. He got pretty upset with me.

[Paperback Writer]

...were generally told that their money would be used to make short-term loans to third-party borrowers at a high interest rate and that Mathon had an extensive track record of making such loans.

So the pitch line was: "invest in our loan shark operation"? Lets see, 40% return, what interest rate were they charging on the ST loans? One would think, the interest rate on such loans would have to be > 50%. That's loan sharking.

My guess is that "investors" have trouble distinguishing between a Ponzi scheme and a MLM operation. Can't blame them as I have the same problem. And that's the reason I don't listen to MLM pitches.

[wuapinmon]

I know some people who make short-term loans to people who are buying houses in foreclosure at auction. Once the buyers secure financing or remodel and sell it, they pay the people back, and it's usually a set fee per $1k borrowed per 90 days. Even if you went 6 months, it doesn't even come close to 40% per year.

[Joe Public]

So the pitch line was: "invest in our loan shark operation"? Lets see, 40% return, what interest rate were they charging on the ST loans? One would think, the interest rate on such loans would have to be > 50%. That's loan sharking.

My guess is that "investors" have trouble distinguishing between a Ponzi scheme and a MLM operation. Can't blame them as I have the same problem. And that's the reason I don't listen to MLM pitches.

Or the payday loan business.

[CardiacCoug]

If you invest because someone promises 30%, 40%, 50% or more in annual returns, you deserve to lose every penny you have.

Yep.

Gotta say I don't feel too bad for the victims of these schemes because the combination of greed and stupidity that takes is pretty damn high.