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Authorities allege over $1.3 billion stolen in Ponzi scheme

On Behalf of | Apr 15, 2019 | Fraud

In any case dealing with investments in Houston, the potential of sustaining losses is ever-present. Many may say that is simply the price one pays for delving into the investment market. Yet when people invest funds, they typically do so for a very specific purpose. That purpose is typically proposed by their investment brokers, and the exchange of monies only occurs under the condition that the funds be used for those specified goals. Any other use of the money could potentially constitute fraud on the part of the broker. 

A trio of such professionals is currently facing such charges after being arrested by authorities in California. Officials say that they bilked investors from all over the country of over $1.3 billion. Their claims were that the money was going into conservative investment opportunities, when in reality it was actually being used to fund both the investment company’s own real estate purchases as well as the luxurious lifestyle enjoyed by its owner. The Ponzi scheme led to the company becoming insolvent and eventually prompted its leadership to file for bankruptcy, costing investors huge losses on the principal that they had put up. 

The company at the center of this case had already had issues with the Securities an Exchange Commission, having to pay out over $1 billion in another matter. The fact that its representatives were able to go on stealing from investors speaks to the complexity of investment accounts and the trust that people place in brokers. When that trust is violated, victims may certainly be justified in seeking action. The likelihood of such action yielding positive results may increase dramatically if one has an experienced attorney on their side. 

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