Understanding Ponzi scheme allegations

Facing white collar crime charges can hurt people's businesses, their reputations and even their families; one of the most damaging types of charges concern accusations of running a Ponzi scheme. Understanding what exactly is involved in a Ponzi scheme allegation can help residents in Maryland, who find themselves dealing with such charges, know how best to plan out their criminal defense.

Ponzi scheme facts

According to the U.S. Securities and Exchange Commission, a Ponzi scheme is a form of fraud that involves the solicitation of investments, in exchange for very high returns. Recent headlines show that Ponzi scheme charges may be more common than some people may believe. Examples can be found around the nation and include the following:

  • LehighValleyLive.com recently reported that a physician from Maryland is allegedly connected to a Ponzi scheme involving a business operation managed by his family's trust. To date, two other people have entered guilty pleas in relation to the alleged scheme. The physician and his son have also been charged with tax fraud.
  • In North Carolina, WXII12.com reports that 20 criminal counts have been dropped in a Ponzi scheme case against a day trader. A guilty plea was entered for a remaining five counts and the woman is expected to receive a sentence of 10 years in prison.
  • According to CBS Miami, a former bank vice president was recently released from jail on a $250,000 bail and faces criminal charges for conspiracy and wire fraud related to an alleged $1.2 billion Ponzi scheme.
  • NJ.com posted a report about a music festival producer who will be sentenced in January after being convicted of wire fraud and conspiracy. He is said to have defrauded investors in an overseas mining scheme.

These stories indicate the wide range of situations from which Ponzi scheme allegations can arise.

Preventing allegations of running a Ponzi scheme

There are some things that people can do to ensure their business practices are not seen as illegal forms of fraud, including registering all investments as a means of offering security to investors. Including a conflict resolution path in any investment agreement is another good practice.

Other things which may raise suspicion of fraudulent activities include preventing investors from cashing out at any time or offering a fixed return on investments.

Accusations are not always true

The intent of any business or individual can also become part of the determination of fraud or not. A Savannah Morning News report stated that a University of Georgia coach was found not guilty of participation in an alleged Ponzi scheme because he did not intend to deceive others. He had faced charges of wire fraud, money laundering and mail fraud.

Every defendant must remember that an allegation does not predetermine a conviction. The right to a criminal defense is a central part of our nation's legal and judicial system. Contacting an attorney when criminal charges are faced is critical.

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