From time to time you read in the newspaper about someone being caught in a "Ponzi scheme." You may ask: Who was Ponzi and what did he do that causes his name to be used these days.
Charles Ponzi was a notorious con man in the early 1920s. He emigrated to the United States from Italy in 1902. He attracted investors in his scheme by offering to double their money in 90 days! (You've heard the saying: "If a deal sounds too good to be true, it probably is.")
His was! Ponzi paid off early investors with the money he took from later investors -- not from any real investment earnings. Obviously, Ponzi's scheme eventually collapsed. He served time in the Atlanta federal prison, was freed, lived in poverty and died in Rio de Janeiro in 1949.
More recently you have read of Bernard Madoff in New York. He was sentenced to 150 years in prison for his Ponzi scheme, for which he was ordered to repay $170 billion in reparations -- which are unlikely to materialize.
Now locally -- yes, here -- Luis Rivas this week was sentenced in U.S. District Court to 293 months in prison after his July guilty plea in a Ponzi scheme. Some say it involved $18 million, others say $33 million .
A word to the wise. Avoid "get rich quick" Ponzi schemes.
That goes for eager "investors" -- and should go for potential Ponzi scheme operators, too -- if they want to stay out of prison.
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