White collar crimes are crimes that are non-violent and are committed for personal gain, typically to acquire money. They are typically committed when a person abuses his or her position and uses it to benefit through illegal means. A ponzi scheme is one example of a white collar crime. Conducting a ponzi scheme is a criminal act of fraud that often involves large sums of money and many affected investors.
Because so many people and such a large sum of money is involved, ponzi scheme charges often result in high profile cases, with the defendant facing an aggressive prosecution. If you have been charged with involvement in a ponzi scheme, consider contacting a criminal defense attorney immediately to assist you with your case.
How Does a Ponzi Scheme Work?
Most people have heard of a ponzi scheme and understand that it is an illegal act that involves stealing money, but they may not know exactly how the operation is run. In a ponzi scheme, a fraudulent investment entity is set up and promises to earn substantial returns for investors. Instead of actually paying back investors with earned money, however, the offenders use investments from later investors to pay back earlier investors.
Money is simply transferred from one investor to another, with the whole scheme hinging on the plan that only a few investors will ask for their money at any given time. The fraudulent individuals skim off the top throughout this entire process, spending money that rightfully belongs to investors.
Ponzi Scheme Fallout
White collar crimes like ponzi schemes are sometimes referred to as “victimless crimes” because they are non-violent. On the contrary, they often involve many victims who lose substantial sums of money. Some people may lose their entire fortunes and are left with nothing after the scam is uncovered. Because ponzi schemes can have such a negative effect on so many people and involve large sums of money, convicted individuals are often issued severe punishments, possibly including life in prison.
If you have been charged with involvement in a ponzi scheme, it is important to have an experienced criminal defense lawyer on your side to protect your legal rights and defend your case.