Bernie Madoff was arrested for stealing $64.8 billion from investors in the single largest Ponzi scheme in United States history less than a decade ago, but Americans are still falling prey to these types of schemes every single day.
According to Kathy Bazoian Phelps, a bankruptcy law and fraud litigation lawyer based out of Los Angeles, a dozen or more Ponzi schemes are exposed every month. Phelps, the author of “Ponzi-Proof Your Investments,” catalogues these busts on her blog, and said that,
“People continue to be very trusting and not do the level of due diligence. If you don’t understand it after a five-minute conversation, don’t invest in it.”
David Wall, CPA at the Los Angeles-based accountancy firm CliftonLarsonAllen, sat down with MarketWatch to discuss a recent Ponzi scheme where the mastermind, Ryan Rude, stole nearly $5 million from his investors.
“[Rude] gave free seminars on how to get rich quick with no money down at airport hotels,” said Wall. “He sold CDs. He did those speeches as a guest host of a national educational organization. That organization introduced Ryan Rude as one of its disciples. He was billed as a highly successful real-estate investor who was worth millions and achieved his wealth through the application of the program.”
Unlike Madoff, Rude didn’t target the wealthiest people he could find – he went after people without much money to spare. He convinced at least one investor to shift from an IRA into a self-directed IRA which allowed her to invest with far fewer restrictions. He convinced another to take out $120,000 from their credit cards.
“It’s not wise to give everything you have to one man who promises the earth, but Rude’s MO was to target unsophisticated people who dreamed of building their wealth against all odds,” said Wall.
No matter the scheme, our team of investment fraud lawyers at Meyer Wilson are ready to provide our clients with the knowledgeable and dedicated representation they need to secure the compensation they deserve. Over the years, we have successfully recovered more than $350 million for our clients and continue to fight in arbitration, court, and at the negotiation table every day. Call us at one of our offices located across the United States, or send us your information through our online form to get started with a free consultation today.