Hey you, got some money you want to invest? This is a can’t-miss deal; good, no, great returns; stable performance even in bad times; and to top it off, everything is guaranteed. Interested?
Unfortunately for many investors, the answer was yes. But what they invested their money in wasn’t some sort of special high-interest CD or high-tech stock trading system that couldn’t lose. It was a Ponzi scheme, a fraud that uses cash from newer investors to pay those attractive returns to older investors. That is, until the scheme collapses.
Any time you make an investment, there’s a chance you may lose money. This can happen from bad investment performance, your investment company going bankrupt, or outright fraud. When you lose money in an investment, you might be able to recover it, but it depends on why your investment went sour.
A quick case that comes to the mind is the MMM Ponzi scheme. The Nigerian Deposit Insurance Corporation, NDIC, has said that an estimated three million Nigerians lost N18 billion in the MavrodiMundial Movement, MMM, ponzi scheme. Over 3 million Nigerians were participating in MMM before December 2016 when organizers suspended payment to investors due to its system “experiencing heavy workload.” By the time the scheme returned in January, few new investors joined and the millions waiting for their payments were left disappointed with majority never paid.
Ponzi scheme fraud is not limited to Nigeria, if you watch television, read the newspaper, or surf news sites, you’re sure to have heard about the $50 billion Ponzi scheme masterminded by Bernard Madoff. The $50 billion in losses is merely an estimate. Some experts think that the actual losses will be much higher.
Just as common sense could help avoid new Ponzi schemes. People ought to know it’s completely unrealistic that they can get into one of the financial pyramids and come out ahead. You’re either going to lose everything or you’re going to have to give back what you earned.
This report will examine what to do to avoid being a victim of Ponzi scheme fraud and if you are a victim, the options you have to recover your loss. It will finally provide a recipe for those who will like to tour a more honourable root for passive income investment.