In the US the term "PONZI SCHEME" is used to describe what the rest of the world calls "Pyramid Scheme" or in Spanish
"ESTAFA PIRAMIDE". Since the current crsis is revealing a deluge of Ponzi/Piramides this page deals with them.
THE WORLD'S GREATEST PONZI SCHEME
Let’s say there is $10 trillion of central
bank notes everywhere in the world...The central bank then prints $1 trillion more and gives it to whoever. Now there is $11
trillion. As that new money goes into circulation, the $10 in yesterday’s dollars is now worth about $8.89 in today’s
dollars. Or, in reverse, what cost you $10 today will cost you $11 tomorrow, on average. You’ve just been ripped off,
and the beneficiaries are whoever received that extra $1 trillion that the central bank just printed.
Because of its importance the followng article is presented
in its entirety:
Ponzi Schemes Are
Busting Out All Over
It seems almost unimaginable that
Americans who are rightfully cheering
Madoff's 150-year sentence don't
understand that their President, along
and legislators across
the fruited plain, are
involved in the very
same scam, and with their money.
The same week Ponzi
schemer Bernard Madoff was sentenced to 150 years in prison, and Ponzi schemer Allen Stanford was denied bail, government
Ponzi schemes in states across the country exploded.
If you fail to see
the irony and/or the connection, you mustn't understand what a Ponzi scheme really is.
Without getting too
technical, such a scam raises money by promising investors extraordinary returns. To attract more victims, interest payments
are made out of the pool of invested dollars to give the appearance the fund manager is doing a good job.
As high-yielding "dividends"
continue to be distributed in a timely fashion, more and more investors give the con artist their money. When the flow of
new dollars ends, the scam explodes, and the schemer is exposed.
Sadly, this is
across the nation
- including the
one in Washington
- have been
behaving for many
They distribute more
and more money - much like a Ponzi schemer's interest payments or "dividends"- in anticipation that additional investments
will be made in the future - i.e. taxes.
Fortunately for the
feds, since there is no balanced budget requirement, the Treasury can just sell more bills, notes, and bonds to make up for
the shortfall, although this ironically adds to the Ponzi scheme since the buyers are hoping to some day get their money back.
But, in states like
California, whose Constitution demands a balanced budget, this is not an option thereby forcing it to issue IOUs to employees,
which comically is what Ponzi scheme investors often get once the scam is exposed.
The saddest part of
this story is that governments around the country- including the feds - were warned about their exploding Ponzi schemes in
the early part of this decade.
When tax receipts
plummeted after the tech stock bubble burst and a recession ensued in 2001, governments from coast to coast including in Washington
were suddenly awash in red ink they never anticipated.
But did they do anything
about it? Did legislators, governors, and presidents learn anything by this and become fiscally responsible?
Of course not, for
much like a Ponzi scheme, once the economy began growing again, and tax receipts started to rise, so did expenditures.
The "finest" example
was Washington expanding Medicare at the end of 2003 to include payments for prescription drugs. Rather than learning from
the previous years' massive budget shortfalls, our elected officials actually added exponentially growing costs to the ledger.
Was this ignorance
Probably both, as
top economists advised California back in 1999 for example, that the explosion in tax receipts the state was enjoying was
non-recurring, and that they shouldn't create budgets anticipating this revenue growth to continue.
Of course, they didn't
listen, and California not only entered into an easily avoidable budget crisis several years later resulting in Gov. Gray
Davis' recall, but his supposedly more fiscally adroit replacement ended up making the same mistake in subsequent years leading
to the current calamity.
3,000 miles east in
the nation's capital, after years of fiscal irresponsibility by the Republicans in power, the new Democrat regime has taken
the Ponzi scheme to an unprecedented level.
current explosion in expenditures is happening at the exact same time tax receipts are shrinking due to the ongoing recession.
As this is typically
when Ponzi schemes explode and the perpetrators are arrested, it seems almost unimaginable that Americans who are rightfully
cheering Madoff's 150-year sentence don't understand that their President, along with governors and legislators across the
fruited plain, are involved in the very same scam, and with their money.
Noel Sheppard is the Associate Editor of the Media Research Center's NewsBusters.org. He
welcomes feedback at firstname.lastname@example.org.
Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of
New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take
advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors
that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds
from investors, taking in $1 million during one three-hour period—and this was 1921! Though a few early investors were
paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international
Decades later, the Ponzi scheme continues to work on the "rob-Peter-to-pay-Paul" principle, as
money from new investors is used to pay off earlier investors until the whole scheme collapses. For more information, please
read pyramid schemes...
Charles Ponzi (click on photo to go to Ponzi page)
It's a bird, it's a plane, whatever it is, it's flying
away with YOUR BAILOUT MONEY...
Meet Citigroup's golden fingered trader whose claim to a $100,000,000.00 "bonus" proves what we said above
about the NY Stock Exchange and all others. What benefit to the economy is the work of these "high producing traders?
Or are they better described as "traitors" to the free enterprise system? - JW
trader's $100 million pay deal highlights executive comp dilemma
The Eternal Recurrence of Financial Corruption
Lessons for today from the infamous industrialist/crook Ivar Kreuger
TO some,Bernard L. Madoffwas an affable, charismatic man who moved comfortably among
power brokers on Wall Street and in Washington, a winning financier who had all the toys: the penthouse apartment in Manhattan,
the shares in two private jets, the yacht moored off the French Riviera.
Madoff, right, in 1993 at a House hearing with David S. Ruder, formerly of the S.E.C., center, and Richard Grasso of the New
York Stock Exchange.
Although hardly a household name, he secured a longstanding role as an elder statesman on Wall Street,
allowing him to land on important boards and commissions where his opinions helped shape securities regulations. Along the
way, he snared a coveted spot as the chairman of a major stock exchange, Nasdaq.
And his employees say he treated them like family.
There was, of course, another side to Mr. Madoff, who is 70. Reclusive, at times standoffish and aloof,
this Bernie rarely rubbed elbows in Manhattan’s cocktail circuit or at Palm Beach balls. This Bernie was quiet, controlled
and closely attuned to his image, down to the most minute details.
He was, for instance, an avid collector of vintage watches and took time each morning to match his
wedding ring — he owned at least two — to the platinum or gold watch band he was wearing that day.
Per his directives, the décor in his firm’s New York and London offices was stark. Black, white
and gray — or “icily cold modern,” as one frequent visitor to the New York operation described it.
Despite nurturing a familial atmosphere in his offices, he installed two cameras on the small trading
floor of the firm’s London operations so he could monitor the unit remotely from New York.
This Bernie also ran a money management business on the side for decades that he kept hidden far from
colleagues, competitors and regulators.
While he managed billions of dollars for individuals and foundations, he shunned one-on-one meetings
with most of his investors, wrapping himself in an Oz-like aura, making him even more desirable to those seeking access.
So who was the real Bernie Madoff? And what could have driven him to choreograph a $50 billionPonzi scheme, to which he is said to have confessed?
An easy answer is that Mr. Madoff was a charlatan of epic proportions, a greedy manipulator so hungry
to accumulate wealth that he did not care whom he hurt to get what he wanted.
But some analysts say that a more complex and layered observation of his actions involves linking the
world of white-collar finance to the world of serial criminals.
They wonder whether good old Bernie Madoff might have stolen simply for the fun of it, exploiting every
relationship in his life for decades while studiously manipulating financial regulators.
“Some of the characteristics you see in psychopaths are lying, manipulation, the ability to deceive,
feelings of grandiosity and callousness toward their victims,” says Gregg O. McCrary, a former special agent with theF.B.I.who spent years constructing criminal behavioral profiles.
Mr. McCrary cautions that he has never met Mr. Madoff, so he can’t make a diagnosis, but he says
Mr. Madoff appears to share many of the destructive traits typically seen in a psychopath. That is why, he says, so many who
came into contact with Mr. Madoff have been left reeling and in confusion about his motives.
“People like him become sort of like chameleons. They are very good at impression management,”
Mr. McCrary says. “They manage the impression you receive of them. They know what people want, and they give it to them.”
As investigators plow through decades of documents, trying to decipher whether Mr. Madoff was engaged
in anything other than an elaborate financial ruse, his friends remain dumbfounded — and feel deeply violated.
“He was a hero to us. The head of Nasdaq. We were proud of everything he had accomplished,”
says Diana Goldberg, who once shared the 27-minute train ride with Mr. Madoff from their homes in Laurelton, Queens, to classes
at Far Rockaway High School. “Now, the hero has vanished.”
If, in the end, Mr. Madoff is found to have been engaging in fraud for most of his career, then the
hero never really existed. Authorities say Mr. Madoff himself has confessed that he was the author of a longstanding and wide-ranging
financial charade. His lawyer, Ira Lee Sorkin, declined to comment.
During the decades that Mr. Madoff built his business, he cast himself as a crusader, protecting the
interests of smaller investors and bent on changing the way securities trading was done on Wall Street. To that end, like
a burglar who knows the patrol routes of the police and can listen in on their radio scanners, he also actively wooed regulators
who monitored his business.
“He once mentioned to me that he spent one-third of his time in Washington in the early 1990s,
late 1980s,” says a person who has known Mr. Madoff for years but requested not to be identified because he does not
want to be drawn into continuing litigation. “He was very involved with regulators. I think they used him as a sounding
board and he looked to them like a white knight.”
“He was smart in understanding very early on that the more involved you were with regulators,
you could shape regulation,” this individual adds. “But, if we find out that the Ponzi scheme goes back that far,
then he was doing something much smarter. If you’re very close with regulators, they’re not going be looking over
your shoulders that much. Very smart.”
MR. MADOFF spent his early years in Laurelton, a close-knit, Jewish enclave where he and his friends
ate ice cream at the local five-and-ten and attended activities at the community center.
“It was an idyllic place to grow up in,” recalls Vera Gitten, who attended elementary school
with him. She remembers him as “very thin,” a good student and extremely outgoing. She recalls a musical skit
that he and his best friend wrote, rehearsed and performed for the class when they were in fifth or sixth grade.
“It was a broad company, sort of a ‘Sheik of Araby’ kind of thing where they wore
costumes, which were their parents’ bedsheets, that made them look like they were desert sheiks,” Ms. Gitten says.
“They would have us rolling.”
None of Mr. Madoff’s former elementary school friends could recall what his parents, Ralph and
Sylvia, did for a living. According to Securities and Exchange Commission documents from the 1960s, it appears that his mother
had a brokerage firm called Gibraltar Securities registered in her name with an address in Laurelton.
In 1963, the S.E.C. began investigating whether a number of firms, including Ms. Madoff’s, had
failed to file financial reports and whether that required revoking their registrations. Early the next year, Ms. Madoff withdrew
her registration and the S.E.C. dropped its proceedings against her.
While Mr. Madoff’s friends remember little about his parents, they all clearly recall his childhood
sweetheart, and future wife, Ruth Alpern, a pretty, bubbly blonde who was voted “Josie College” by her Far Rockaway
High School class.
Mr. Madoff, after graduating from high school in 1956, spent a year at theUniversity of Alabama, where he joined Sigma Alpha Mu, a Jewish fraternity. A year later, he transferred toHofstra University, where he graduated in 1960 with a degree in political science. He later became a Hofstra trustee, but
the university never invested with him.
Mr. Madoff spent the next year at Brooklyn Law School, attending classes in the morning and running
his side business — installing and fixing sprinkler systems — in the afternoon and evening, recalled Joseph Kavanau,
who attended law school with Mr. Madoff. When Mr. Kavanau married his wife, Jane, who was Mrs. Madoff’s best friend
from Queens, Mr. Madoff was the best man.
“Bernie was very industrious,” Mr. Kavanau explains. “He was going to school and
working at the same time.”
Mr. Madoff was never interested in practicing law, Mr. Kavanau says. Instead, Mr. Madoff left law school
and, using $5,000 saved from being a lifeguard and from his sprinkler business, joined the ranks of Wall Street in the 1960s.
“For many years when we were first married, my wife and I would go to their house or we would
all go out to dinner, maybe a couple of nights a month,” said Mr. Kavanau, who says that the first home Mr. Madoff shared
with his bride was a modest, one-bedroom apartment in Bayside, Queens.
Over the years, however, the two couples drifted apart. From time to time, Mr. Kavanau said he turned
on the television and caught a glimpse of Mr. Madoff — now a successful financier — being interviewed, realizing
that he had made his mark on Wall Street.
“The last time I saw him, we had run into him and Ruth on Worth Avenue in Palm Beach,”
Mr. Kavanau recalls. “We were definitely aware of how well he was living.”
When asked if he can understand what happened, what may have motivated or prompted Mr. Madoff to eventually
take such risks after building up a seemingly successful business, Mr. Kavanau paused.
“There is no way to. I can’t make it add up. It doesn’t make sense,” he says,
growing increasingly frustrated. “I cannot take the Bernie I knew and turn him into the Bernie we’re hearing about
24/7. It doesn’t compute.”
WHEN Mr. Madoff arrived on Wall Street in the 1960s, he was an outsider. His small firm, Bernard L.
Madoff Investment Securities, got its start by matching buyers of inexpensive “pennystocks” with sellers in the growing over-the-counter market. This hardscrabble market was made up of stocks
that were not listed on the tonierNew York Stock ExchangeorAmerican Stock Exchange.
In the O.T.C. market, it was common practice — and completely legal — for firms like Mr.
Madoff’s to try to attract big trades to their shop by offering to pay clients a penny or two for every share they traded.
His firm would make money by pocketing the difference in the “spread,” or the gap between the offering and selling
price for the stocks.
During the mid-1970s, when changes in the rules allowed his firm and others like it to trade more expensive
and more prestigious blue-chip stocks, Mr. Madoff began gaining market share from the Big Board.
“He was a man with a good idea who was also a terrific salesman,” says Charles V. Doherty,
the former president of the Midwest Stock Exchange. “He was ahead of everyone.”
While completely legitimate, the practice of paying for trading orders was entirely distasteful to
blue bloods on the established exchanges who saw the actions, ultimately, as a threat to their livelihood. Around this time,
Mr. Madoff began cultivating key relationships with regulators.
“He was the darling of the regulators, without question. He was doing everything the regulators
wanted him to do,” says Nicholas A. Giordano, the former president of the Philadelphia Stock Exchange. “They wanted
him to be a fierce competitor to the New York Stock Exchange, and he was doing it.”
Current and former S.E.C. regulators have come under fire, accused of failing to adequately supervise
Mr. Madoff and being too cozy with him.
Arthur Levitt Jr., who served as S.E.C. chairman from 1993 to early 2001, has acknowledged that he occasionally turned
to Mr. Madoff for advice about how the market functioned. But Mr. Levitt strongly denies that Mr. Madoff had undue influence
at the S.E.C. or that the agency’s enforcement staff deferred to him.
Mr. Levitt said that he was unaware that Mr. Madoff even ran an investment management business, and
that Mr. Madoff never had special access to him or other S.E.C. officials. He also noted that he and Mr. Madoff opposed one
another on several key industry issues.
“The notion that Madoff came to my office many times is a fiction,” Mr. Levitt says. “And
the notion that he did my bidding is so fantastic that it defies belief.”
Mr. Madoff’s firm was an early adopter of new trading technologies. And, during the early 1990s,
he served three one-year stints as head of the Nasdaq, an electronic exchange that has competed vigorously and won market
share from brick-and-mortar exchanges like the Big Board.
Despite this flair for the experimental, Mr. Madoff routinely told his employees to adopt the mantra
“KISS,” or “keep it simple, stupid.” He was, after all, a man of precise and controlled habits. He
smoked Davidoff cigars and, in London, tailored his suits at Kilgour on Savile Row and bought many of his watches at Somlo
Associates and others acquainted with him said his punctilious ways sometimes veered into obsessive-compulsive
behavior. His office, for example, always had to be immaculate.
According to a former employee, who requested anonymity because of continuing litigation and because,
he said, regulators have told Madoff employees not to speak to the media, Mr. Madoff scouted the office for potential filth.
Once, when he spotted an employee eating a pear at his desk in New York, this person said, Mr. Madoff spied some juice dripping
onto the gray carpet.
“What do you think you are doing?” this person recalls Mr. Madoff demanding. Eating a pear,
the employee replied. Mr. Madoff ripped the soiled carpet tile from the floor, then rushed to a closet to retrieve a similar
swatch to replace it.
Julia Fenwick, who was the office manager for Mr. Madoff’s London operation from 2001 until the
unit was shuttered in December, said that “everything had to be perfect” and that “you never left paper
on your desk — ever.”
Although he visited the London office only a couple of times a year, usually on the way to his vacation
home in France, Mr. Madoff still reveled in micromanaging everything there, including the office décor.
The London unit recently finished spending about $700,000 for a refurbishment that recreated the black
and gray palette of Mr. Madoff’s New York office and his private jet, Ms. Fenwick says. The result was office furniture
made from black ash, black trimming on gray walls, black computers, black mouse pads and even a black refrigerator on the
But former employees and friends say Mr. Madoff’s obsession with order and control of his environment
never led them to believe that deeper problems were afoot.
“He appeared to believe in family, loyalty and honesty,” said one former Madoff employee,
who asked to remain anonymous because of the continuing litigation and investigations. “Never in your wildest imagination
would you think he was a fraudster.”
Despite all of the easy money that rolled into Mr. Madoff’s firm for much of its existence, financial
pressures began to emerge there during the last several years after Wall Street changed the way securities were priced and
as new competition emerged.
In his asset management business, however, Mr. Madoff continued to haul in fresh rounds of money from
unsuspecting investors hungry for the predictable and handsome returns he booked year after year, without missing a beat.
Employees who were veterans in the New York and London offices were even allowed to invest with Mr.
Madoff, according to people who worked at the firm. Some employees are said to have given Mr. Madoff a large portion of their
life savings — all of which now appears to be gone.
Like so many others who invested with him, his employees weren’t lured to his funds simply by
a promise of outsize returns. Rather, they say, they sought the security of investing with a man they knew and trusted. The
Bernie they thought they knew.
Mr. Madoff’s confidence reminds J. Reid Meloy, a forensic psychologist, of criminals he has studied.
“Typically, people with psychopathic personalities don’t fear getting caught,” explains
Dr. Meloy, author of a 1988 textbook, “The Psychopathic Mind.” “They tend to be very narcissistic with a
strong sense of entitlement.”
All of which has led some forensic psychologists to see some similarities between him and serial killers
like Ted Bundy. They say that whereas Mr. Bundy murdered people, Mr. Madoff murdered wallets, bank accounts and people’s
sense of financial trust and security.
Like Mr. Bundy, Mr. Madoff used a sharp mind and an affable demeanor to create a persona that didn’t
exist, according to this view, and lulled his victims into a false sense of security. And when publicly accused, he seemed
to show no remorse.
Television footage of Mr. Madoff entering his apartment building on East 64th Street at Lexington Avenue
after federal authorities charged him with fraud in December doesn’t seem to show a man exhibiting any sorrow or regret.
With a battery of reporters asking him whether he felt remorse, he declined to respond and pushed his way into his building.
(Thus far, his only public apology has apparently been in letters left in his lobby for fellow tenants who suffered through
the media circus outside their building.)
To some extent, analysts of criminal behavior say, defining Mr. Madoff is complicated by the wide variety
of possible explanations for his scheme: a desire to accumulate vast wealth, a need to dominate others and a need to prove
that he was smarter than everyone else. That was shown, they say, in an ability to dupe investors and regulators for years.
Like the former F.B.I. agent Mr. McCrary, Dr. Meloy cautions that he has not met Mr. Madoff and can’t
make a clinical diagnosis. Nevertheless, he says individuals with psychopathic personalities tend to strongly believe that
“They believe ‘I’m above the law,’ and they believe they cannot be caught,”
Mr. Meloy says. “But the Achilles’ heel of the psychopath is his sense of impunity. That is, eventually, what
will bring him down.”
He says it makes complete sense that Mr. Madoff would have courted regulators, even if he ran the risk
of exposing his own actions by doing so.
“In a scheme like this, it’s very important to keep those who could threaten you very close
to you,” Dr. Meloy explains. “You want to develop them as allies and shape how they go about their business and
their attitudes toward you.”
INDEED, if it is shown that Mr. Madoff fooled regulators for decades, that would have been a “heady,
intoxicating” experience and would have fueled a sense of entitlement and grandiosity, Mr. McCrary says.
And by reeling in people from the Jewish community, from charities, from public institutions and from
prominent and relatively sophisticated investor networks worldwide, Mr. Madoff wreaked havoc on many lives.
That’s why Mr. McCrary says it’s not too far-fetched to compare Mr. Madoff to serial killers.
“With serial killers, they have control over the life or death of people,” Mr. McCrary
explains. “They’re playing God. That’s the grandiosity coming through. The sense of being superior. Madoff
is getting the same thing. He’s playing financial god, ruining these people and taking their money"
Stanford Indicted in $7 Billion Scam With Regulator
Stanford Financial Group
flew more than 200 overseas employees to Miami in January for a weekend meeting and yacht cruise. In a pep talk, the company's
billionaire chairman, R. Allen Stanford, announced a quarterly sales contest called the Top Performers Club.
Leading sellers of Stanford's
certificates of deposit, he said, would compete for big bonuses, recalls an employee who was there. Attendees watched a video
of a Stanford financial adviser in Switzerland who, during an earlier incarnation of the contest, received more than $400,000
in pay for three months of sales.
R. ALLEN STANFORD
What Mr. Stanford didn't
reveal, says the employee who attended, was that his financial empire desperately needed cash from the sales to survive. Clients
recently had redeemed about $500 million from the bank. Its assets were depleted and bills were piling up, federal court records
Federal authorities now
say much of the $8 billion Stanford Financial raised selling CDs is missing. In court papers, the Securities and Exchange
Commission has described Stanford Financial as "a massive Ponzi scheme" in which new investments were used to pay off early
Interviews with numerous
former employees and people involved in the investigation, along with internal Stanford documents, paint a picture of a turbocharged
sales machine. Stanford pushed employees hard to sell CDs with an incentive program some of them called "bank crack," while
simultaneously misleading investors who pressed for details about its investments. In the end, mounting pressure from the
SEC triggered a series of tense internal meetings in which one top executive broke into tears and an outside lawyer suggested
A rash of alleged Ponzi
schemes have surfaced during the financial crisis, including Bernard Madoff's, but Mr. Stanford's operation stands out in
one respect. It had a huge and conspicuous marketing presence -- a sprawling network of offices that made his company appear
both legitimate and durable.
In February, the SEC
filed a civil lawsuit accusing Mr. Stanford and two other executives -- James M. Davis and Laura Pendergest-Holt -- of engineering
a massive fraud. A federal judge in Dallas has placed Mr. Stanford's companies in receivership, and their operations have
ceased. Ms. Pendergest-Holt also faces a separate criminal complaint alleging obstruction of justice.
Reached on his cellphone,
Mr. Stanford, 59 years old, declined to comment. David Finn, a lawyer for Mr. Davis, Stanford Financial's chief financial
officer, said, "We are fully cooperating with the federal investigation." Through an attorney, Ms. Pendergest-Holt, Stanford
Financial's chief investment officer, denied wrongdoing.
Stanford Financial looked
like a solid company. It had posh offices, many adorned with green marble and mahogany, throughout the U.S., in Switzerland
and in Latin American nations including Mexico, Venezuela and Peru, staffed by about 430 financial advisers. It spent $12
million last year to host the Stanford St. Jude Championship golf tournament in Memphis, Tenn., and $2 million for an endorsement
contract with golfer Vijay Singh, according to people familiar with the matter.
Yet there were signs
that Mr. Stanford, a Texas native, wasn't a typical banker. After graduating from Baylor University, where he roomed with
Mr. Davis, he unsuccessfully tried his hand at running health clubs, then shifted to real-estate investing.
He set up a bank in 1985,
on the Caribbean island of Montserrat, to hold funds for his real-estate investors. Five years later, amid a British crackdown
on Montserrat's offshore-banking industry, he moved his bank to Antigua, another tax haven. U.S. regulators blacklisted Antigua
for lax regulation in the late 1990s, then lifted the sanctions in 2001.
The 6-foot-4-inch financier
became a towering figure on the island, which granted him citizenship in 1999 and knighted him in 2006. He served as chairman
of the government board that oversaw its offshore financial industry, was a major lender to the government, launched an airline
and a construction firm, and purchased the island's biggest newspaper. He poured considerable sums into West Indian cricket,
hosting a tournament last fall that awarded the winning team $20 million. He told people his life had been changed by an encounter
with a local Catholic priest with wounds in his hands and feet that Mr. Stanford believed to be the stigmata of Jesus Christ.
He began carrying with him a vial of congealed fluids from the priest's foot.
The core of his financial
empire was his Antiguan bank, Stanford International Bank Ltd. The bank issued the CDs, many of which were sold in Latin America.
In the U.S., the CDs were sold by a brokerage unit, Stanford Group Co. The brokerage targeted well-heeled clients and recruited
financial advisers from the likes ofMerrill Lynch& Co. andUBSAG. Its headquarters in Houston featured a concierge, a
multimedia theater for client presentations and a half floor of private offices for Mr. Stanford. Employees say he hardly
ever used them.
In happier times, financier R. Allen Stanford is thanked by a cricket fan at a tournament he staged last fall,
where the winning team got $20 million.
The CDs promised yields
several percentage points higher than U.S. bank CDs. Stanford said that was possible because of its offshore bank's tax advantages.
They were pitched to clients as conservative instruments. "Our strategy is based on an investment methodology that seeks to
minimize risk, and achieve liquidity," said a 2007 disclosure statement that came with the CDs.
Michael Kogutt, 51, of
Coppell, Texas, says he and several relatives met with two Stanford financial advisers in November 2007 after a German company
purchased his family's promotional-products business. "We told them that we were extremely risk-averse," he recalls.
He says he initially
invested about $700,000 in several mutual-fund products, and about $700,000 in five-year "flex" CDs, which allowed partial
withdrawals up to four times a year. Last summer, after the stock market declined, he liquidated the mutual-fund products
and invested most of his life savings -- $2 million -- in the CDs. He said the Antiguan bank promised 9.87% compounded annual
interest, about six percentage points higher than prevailing U.S. bank CD rates at the time.
Stanford financial advisers
had incentive to push the CDs, which earned them higher commissions than other products -- a straight fee of 1%, plus a chance
to earn an additional 1% a year over the term of the CD if they sold at least $2 million worth in a quarter. Some Stanford
employees referred internally to the CD compensation program as "bank crack," says former Stanford financial adviser Charles
Rawl, "because it seemed to be addicting."
Advisers around the world
belonged to CD sales teams with names like the "Superstars," "The Deal Hunters" and "Money Machine," according to internal
emails reviewed by The Wall Street Journal. Spreadsheets and tables reported the latest sales, broken down by team, offices
Managers pushed advisers
hard. "Unfortunately, the fourth quarter has gotten off to a REALLY SLOW start," stated a Nov. 3, 2005, email from Jason Green,
then a managing director in the Baton Rouge, La., office. "We only have about $1.7MM of production for October, well short
of our $21MM monthly goal! However, I'm counting on a really strong November and December!!!!"
The email added, "Of
course, as always, don't try to force it, if it's not the right thing for your clients/prospective clients." Mr. Green declined
Customers of Stanford Bank outside one of its offices in Caracas, Venezuela, in February. The U.S. Securities
and Exchange Commission has accused Mr. Stanford and two other executives of engineering a massive fraud.
Advisers sometimes accompanied
wealthy potential CD buyers on all-expenses-paid, three-day trips to Antigua so they could meet bank officials. If the potential
sales reached $5 million, they flew by private jet, says D. Mark Tidwell, who worked from 2004 to 2007 as a financial adviser
and sales manager in Stanford Group's Houston office.
Mr. Tidwell says when
one of his corporate clients once asked what the bank invested in, Juan Rodriguez-Tolentino, the bank's president, deflected
the question, replying: "You don't ask what Bank of America is investing in." Mr. Rodriguez-Tolentino declined to comment.
The second most lucrative
product for Stanford's U.S. operations was a mutual-fund product called Stanford Allocation Strategy, or SAS. It was made
up of third-party funds purchased from companies likePutnam Investmentsand Vanguard Group Inc. In 2007 and 2008, Stanford's brokerage
arm sold about $1.2 billion of the products, according to the SEC.
Charts shown to clients
claimed the SAS funds beat the S&P 500 index year after year. One 2006 chart showed that over a five-year period, the
SAS Growth fund posted a 13.82% annualized return, versus 6.19% for the S&P 500. In its lawsuit, the SEC calls the SAS
performance results from 1999 to 2004 "fictional and/or inflated."
Steve Riordan, a Boston-based
performance-measurement reporting consultant, says Stanford Group hired him in November 2006 to review the figures after some
clients complained that they hadn't received the robust returns reported in the tables.
"Nobody could tell me
with certainty how these numbers were being calculated," Mr. Riordan recalls. "I didn't know how they were getting their returns.
I just knew that they were wrong."
He says he helped Stanford
provide accurate returns, which were lower than suggested, for SAS funds from 2005 onward. He couldn't correct the prior performance
tables, he says, because Stanford told him it didn't have underlying data.
Mr. Riordan says he also
tried to calculate the returns on the CDs. But Stanford's Antiguan bank, he says, refused to provide any information, citing
Stanford Financial also
exaggerated how much money it oversaw, according to several former employees. This year, the company's Web site claimed it
had "over $50 billion in assets under management or advisement." But several former employees say that number was inflated
by including the total value of portfolios for which Stanford played only a minor role, such as providing brokerage services.
For example, Stanford
Group occasionally sold government securities to the Dallas Fort Worth International Airport Board, but it didn't manage the
board's investments or provide it with advice, says a person familiar with the matter. "The airport manages its own money
completely in house," says David Magana, a board spokesman. Nevertheless, Stanford counted the board's entire $1 billion investment
portfolio in its money-management total, says Charles Satterfield, who worked in Stanford Group's fixed-income unit.
"My understanding was
they were doing that," says Benjamin Finkelstein, Stanford Group's former senior managing director of public funds. "I was
concerned about that, and I expressed those concerns, and I was told that they were not being used for that purpose."
Over the years, Mr. Stanford's
operations attracted considerable attention from U.S. regulators and investigators. He is involved in a long-running dispute
with the Internal Revenue Service over back taxes. The agency says he and his wife currently owe $226.6 million, including
penalties and interest.
In 2007, the Financial
Industry Regulatory Authority, Wall Street's self-policing body, fined Stanford Group for, among other things, using sales
material that contained "misleading, unfair and unbalanced information" about the CDs. By June 2008, Mr. Stanford's companies
were being investigated by the Federal Bureau of Investigation, the SEC, the IRS and the U.S. Postal Inspection Service for
possible fraudulent CD sales, federal court records show.
The U.S. brokerage unit
grew rapidly, to more than 20 offices last year from a half-dozen in 2004. The costly operation, it now appears, was being
kept afloat by revenue from CD sales. Deposits in Mr. Stanford's Antiguan bank jumped to $8 billion last year, from $3 billion
in 2004, internal Stanford documents indicate. The U.S. brokerage unit lost tens of millions of dollars over that period,
according to the SEC. Over that time, the bank and Mr. Stanford transferred hundreds of millions of dollars to the unit, the
As recently as December,
in a report to clients following the Madoff scandal and global stock-market turmoil, the Stanford bank stated it was "strong,
safe and fiscally sound." By then, serious pressure was building. Spooked by the global financial crisis, clients had begun
trying to pull money out.
Around that time, Mr.
Kogutt, the investor from Texas, told a Stanford adviser, Patrick J. Cruickshank, that he wanted to do just that. "I wanted
to have more diversified investments, but he said these were the safest things you could do with that kind of rate of return,"
Mr. Kogutt recalls. "He said, 'No. Leave it. Leave it.' " Mr. Cruickshank didn't return calls seeking comment.
Between Jan. 21 and Feb.
6, top Stanford executives discussed the mounting problems in a series of meetings in Miami, according to an FBI affidavit
included with the criminal complaint against Ms. Pendergest-Holt. The purpose of the meetings, the FBI says, was to prepare
for testimony before the SEC, which was investigating Mr. Stanford's companies and seeking an accounting of the assets behind
During one meeting, Ms.
Pendergest-Holt disclosed that one pool of assets had declined to $350 million from $850 million in June, the FBI says. She
displayed a pie chart of a much larger pool that held more than $3 billion in real estate and a $1.6 billion loan to Mr. Stanford.
The affidavit, which
describes conversations that took place during the meetings, doesn't provide the names of the other executives involved. The
Wall Street Journal identified them through interviews with people familiar with the matter.
In a subsequent telephone
conversation, Stanford Financial's outside attorney, Thomas Sjoblom, told Stanford's general counsel, P. Mauricio Alvarado,
"The assets may or may not be there," the affidavit said, without identifying the men by name.
stated that if Ms. Pendergest-Holt's pie chart was accurate, then Stanford International Bank would be insolvent. Danny Bogar,
Stanford Group's president "broke down crying" at one point, according to the affidavit, again without naming names. Mr. Sjoblom
later "suggested they begin to pray together."
The affidavit said Mr.
Sjoblom told another executive, Lena Stinson, "The party is over."
Mr. Sjoblom, who later
withdrew as Stanford's attorney, didn't return calls seeking comment. Messrs. Bogar and Alvarado and Ms. Stinson all declined
On Feb. 19, two days
after the SEC filed its civil lawsuit, Mr. Kogutt, his father and brother -- all three had invested in CDs -- boarded a plane
to Antigua in hopes of retrieving their savings from Stanford International Bank. For two days, says Mr. Kogutt, they joined
about 30 other frantic people, mostly from Mexico and South America, inside the bank's lobby, with a single bank employee
trying to handle the crowd.
After learning the bank
had been placed in receivership, they returned to Texas, leaving behind instructions to wire their money home. To date, they
have received nothing.
Investigators now estimate
that less than half of the $8 billion raised through CD sales will ever be recovered...WSJ
Madoff's auditor claimed it didn't do audits Friehling & Horowitz, the small New York auditing firm
that certified the financial statements of Bernard Madoff Investment Securities, has been telling the AICPA for 15 years that
it doesn't perform audits. By denying it did audits, the firm avoided reviews by the AICPA. New York is one of only six states
that doesn't require accountants to be peer-reviewed. "The plain fact is that this group hasn't submitted for peer review
and appears to have done an audit," said AICPA spokesman Bill Roberts, noting the Institute has now launched an investigation
into the firm. CNNmoney.com/Fortune
Stanford Financial: el ascenso y caída de una máquina de ventas financieras
Por Steve Stecklow
En enero, Stanford Financial
Group llevó a más de 200 empleados internacionales a Miami para una reunión de fin de semana y un viaje en yate. En un discurso,
el presidente de la compañía, el millonario R. Allen Stanford, anunció un concurso de ventas trimestrales.
Lo que Stanford no reveló, cuenta
un empleado que asistió a la reunión, era que su imperio financiero necesitaba desesperadamente el efectivo de las ventas
para sobrevivir. Los clientes recientemente habían retirado unos US$500 millones del banco. Sus activos se habían agotado
y las facturas se acumulaban, según documentos judiciales.
Ahora, las autoridades de Estados
Unidos dicen que gran parte de los US$8.000 millones que Stanford Financial recaudó vendiendo certificados de depósito (CD)
ha desaparecido. En documentos judiciales, la Comisión de Bolsa y Valores de EE.UU. (SEC) ha descrito a Stanford Financial
como una pirámide financiera masiva, en el que las nuevas inversiones eran utilizadas para pagarles a los previos inversionistas.
Entrevistas con varios ex empleados
y personas involucradas en la investigación, además de documentos internos de Stanford, ofrecen una descripción del banco
como una máquina de ventas que presionaba duramente a sus empleados para que promocionaran CD con un programa de incentivos
y engañaba a inversionistas que pedían detalles sobre sus inversiones.
En febrero, la SEC presentó una
demanda civil acusando a Stanford y otros dos ejecutivos —James M. Davis y Laura Pendergest-Holt— de tramar un
masivo fraude. Un juez federal de EE.UU. ha puesto las compañías de Stanford bajo administración judicial y sus operaciones
han cesado. Pendergest-Holt también enfrenta una demanda criminal aparte por obstrucción a la justicia.
Contactado a su teléfono celular,
Stanford, de 59 años, declinó hacer comentarios. David Finn, abogado de Davis, el director general de finanzas de la empresa,
señaló que están "cooperando completamente con la investigación". A través de un abogado, Pendergest-Holt, la directora general
de inversión, negó haber actuado inapropiadamente.
Stanford Financial parecía una
compañía sólida. Poseía oficinas lujosas, muchas de ellas adornadas con mármol verde y caoba, a lo largo de EE.UU., Suiza
y en países latinoamericanos como México, Venezuela y Perú, en las que tenía 430 asesores financieros.
Stanford, oriundo de Texas, se
dedicó a invertir en inmuebles desvalorizados y, en 1985, fundó un banco en la isla de Montserrat, en el Caribe, para depositar
los fondos de sus inversionistas en bienes raíces. Cinco años después, debido al estricto control del gobierno británico sobre
la industria bancaria en el exterior, trasladó su banco a Antigua, otro paraíso fiscal.
El financista se convirtió en
una figura prominente en la isla. El eje de su imperio financiero era su banco en Antigua, Stanford International Bank Ltd.,
que emitió los CD vendidos en EE.UU. y América Latina. En EE.UU., fueron vendidos por una filial de corretaje, Stanford Group
Los CD prometían rendimientos
más altos que los de bancos estadounidenses. Stanford Financial aseguraba que eso era posible gracias a sus ventajas tributarias
en el exterior. Fueron promocionados a los clientes como instrumentos conservadores. "Nuestra estrategia se basa en una metodología
de inversión que busca minimizar el riesgo y lograr liquidez", afirmaba en un documento que venía con los CD.
Los asesores financieros de Stanford
tenían incentivo para promocionar los certificados de depósito, los cuales les daban mayores comisiones que otros productos:
un pago fijo de 1% más la posibilidad de obtener un 1% extra al año sobre el término de la cuenta si vendían por lo menos
US$2 millones en un trimestre.
Los asesores a veces acompañaban
a potenciales compradores de CD en viajes pagados de tres días a Antigua para que pudiera conocer a los directivos bancarios.
Mark Tidwell, quien trabajó de
2004 a 2007 como asesor financiero y gerente de ventas en la oficina de Houston de Stanford Group, dice que cuando uno de
sus clientes corporativos le preguntó en una ocasión en qué invertía el banco, Juan Rodríguez-Tolentino, el director general
del banco, esquivó la pregunta, contestando: "Uno no le pregunta a Bank of America en qué está invirtiendo". Rodríguez-Tolentino
declinó realizar comentarios.
El segundo producto más lucrativo
para las operaciones de Stanford en EE.UU. fue un producto de inversión de fondos mutuos llamado Stanford Allocation Strategy,
o SAS. Estaba conformado por fondos de terceras partes comprados de compañías como Putnam Investments y Vanguard Group Inc.
En 2007 y 2008, el brazo de corretaje de Stanford vendió unos US$1.200 millones en productos, según la SEC.
La unidad de corretaje de EE.UU.
creció rápidamente, pasando de tener media docena de oficinas en 2004 a más de 20 oficinas el año pasado.
La costosa operación, parece,
se mantenía a flote con ganancias de las ventas de CD. Los depósitos en el banco de Stanford en Antigua aumentaron de US$3.000
millones en 2004 a US$8.000 millones el año pasado, indican documentos internos de Stanford. La unidad de corretaje de EE.UU.
perdió decenas de millones de dólares en ese periodo, según la SEC. En ese tiempo, el banco y Stanford transfirieron cientos
de millones de dólares a la unidad, según la SEC.
En diciembre mismo, en un reporte
a clientes tras el escándalo Madoff y la tormenta en los mercados financieros, el banco Stanford afirmó ser "fuerte, seguro
y financieramente sólido". Pero la presión iba en aumento. Espantados por la crisis financiera global, los clientes empezaron
a retirar dinero.
Entre el 21 de enero y el 6 de
febrero, los ejecutivos de Stanford hablaron sobre los crecientes problemas en una serie de reuniones en Miami, según una
declaración jurada del FBI incluida en una denuncia contra Pendergest-Holt. El propósito de las reuniones, dice el FBI, era
prepararse para testificar ante la SEC, que estaba investigando a las compañías de Stanford e indagando en la contabilidad
detrás de los activos ligados a los CD.
Durante una reunión, Pendergest-Holt
reveló que un grupo de activos se había reducido de US$850 millones en junio a US$350 millones, dice el FBI. Mostró un gráfico
que contenía mucho más de US$3.000 millones en bienes raíces y un préstamo de US$1.600 a Allen Stanford. La declaración jurada,
que describe conversaciones que se desarrollaron durante las reuniones, no incluye los nombres de los otros ejecutivos involucrados.
The Wall Street Journal los identificó a través de entrevistas con fuentes al tanto.
En una conversación telefónica
posterior, el abogado externo de Stanford Financial, Thomas Sjoblom, le dijo al abogado general de Stanford, P. Mauricio Alvarado:
"Los activos podrían o no estar ahí", según la declaración jurada, sin identificar a los hombres por su nombre.
Rodríguez-Tolentino indicó que
si el gráfico de Pendergest-Holt era preciso, entonces Stanford International Bank sería insolvente. Danny Bogar, el presidente
de Stanford Group, "se puso a llorar" en un momento, según la declaración jurada, una vez más sin mencionar nombres. Luego,
Sjoblom "sugirió que comenzaran a rezar juntos". La declaración jurada afirmó que Sjoblom le dijo a una ejecutiva, Lena Stinson:
"La fiesta terminó".
Sjoblom, quien luego dejó de
representar legalmente a Stanford, no devolvió llamados en busca de comentarios. Bogar, Alvarado y Stinson declinaron hacer
Los investigadores ahora estiman
que menos de la mitad de los US$8.000 millones recaudados a través de ventas de CD será recuperada...WSJ
Madoff II Texas financier R. Allen Stanford is accused of cheating 50,000
customers out of $8 billion dollars but despite raids Tuesday of his financial empire in Houston, Memphis, and Tupelo, Miss.,
federal authorities say they do not know the current whereabouts of the CEO.
The Securities Exchange Commission alleges Stanford ran a fraud promising investors impossible returns...
Allegations of fraud and possible
drug money laundering have been made against Stanford in the past ten years, but the SEC took action only after two former
employees filed a lawsuit in civil court.
Thomas L. Friedman on Madoff:
"I have no sympathy for Madoff. But the fact is, his alleged Ponzi scheme was only slightly
more outrageous than the “legal” scheme that Wall Street was running, fueled by cheap credit, low standards and
high greed. What do you call giving a worker who makes only $14,000 a year a nothing-down and nothing-to-pay-for-two-years
mortgage to buy a $750,000 home, and then bundling that mortgage with 100 others into bonds — which Moody’s or
Standard & Poors rate AAA — and then selling them to banks and pension funds the world over? That is what our financial
industry was doing. If that isn’t a pyramid scheme, what is?
Far from being built on best practices, this legal Ponzi scheme was built on the mortgage brokers,
bond bundlers, rating agencies, bond sellers and homeowners all working on the I.B.G. principle: “I’ll be gone”
when the payments come due or the mortgage has to be renegotiated..."
"The Madoff affair is the cherry on top of a national breakdown in financial propriety, regulations
and common sense. Which is why we don’t just need a financial bailout; we need an ethical bailout. We need to re-establish
the core balance between our markets, ethics and regulations."
Even estimating conservatively,
Madoff stole more than $1.6 million every workday of his criminal career. Based on my calculations,
Madoff’s bilking rate topped $200,000 an hour, or almost 60 bucks a second. He may have been the most efficient thief
Big Victory Against Global Bribery
A record fine against Siemens hints at success in the US and Europe in curbing
the world of business and finance, 2008 ranks as a year of superlatives – and not the good kind. Biggest government
bailout of Wall Street. Biggest Ponzi scheme (the Madoff case). Now, the biggest US fine for bribery – $800 million
levied against Germany's engineering giant, Siemens AG...
The trail of Siemens's alleged bribery wound around the world to Argentina,
China, Mexico, Israel, and elsewhere. Payoffs were reportedly made to government officials via suitcases stuffed with cash
and bogus consulting contracts.
Worldwide corruption amounts to roughly $1 trillion a year, including
accused by prosecutors last week of operating a Ponzi scheme that swindled at least 6,000 people out of $413 million, was
indicted today on charges of wire and mail fraud.
Cosmo, owner of Agape World Inc. and Agape Merchant
Advance LLC on New York’s Long Island, has been in custody since Jan. 26, when prosecutors charged him with operating
a fraud scheme that they initially believed cheated at least 3,000 investors out of $370 million.
Prosecutors in the office of U.S. Attorney Benton Campbell in Brooklyn, New York, today unsealed a 32-count indictment
against Cosmo that includes 10 counts of wire fraud and 22 counts of mail fraud. Cosmo claimed Agape solicited investor funds
that were used to make short-term bridge loans. Agape received about $413 million from investors, while only about $30 million
in loans were made, prosecutors said.
“Although he told investors that their money was
needed to fund specific bridge loans, Cosmo and account representatives working at his direction solicited investments well
in excess of what was needed to fund the specific loans,” the U.S. said in the indictment.
“Cosmo also claimed that Agape was making certain
loans to particular borrowers when, in fact, as defendant then well knew and believed, Agape was not,” the U.S. said
in the indictment.
Robert Nardoza, a spokesman for Campbell, said that
each count of mail or wire fraud carries a prison term of as long as 20 years in prison and fines of at least $250,000. Cosmo remains in custody until at least an April 29 hearing.
In the indictment, the U.S. said Cosmo operated his
scheme, from October 2003 to this January, a longer period than prosecutors previously alleged. Cosmo is accused of pocketing
the money that investors believed would be used for bridge loans.
When Cosmo was arrested, prosecutors charged him with
one count of mail fraud in a scheme that allegedly operated from October 2003 to last October.
Prosecutors also said today they are seeking about $413
million in assets which they say are the proceeds of Cosmo’s illegal enterprise, including property on Long Island and
accounts in his name atBank of America Corp.
In March, the bank was sued by Agape investors who claimed it assisted Cosmo with the swindle. In the lawsuit, the investors
seek at least $400 million in damages, saying that the bank assigned representatives to work in Cosmo’s offices and
gave him direct access to Bank of America accounts.
Firms in Scheme
The indictment gives new details of how Cosmo defrauded
investors through entities he controlled, including those operating out of Agape’s offices in Hauppauge on Long Island
and in New York City.
Cosmo ran Agape Merchant, which claimed to loan money
to businesses at high interest rates through an entity called Professional Merchant Advance Capital LLC, or PROMAC. Cosmo
was president and 20 percent shareholder in PROMAC and controlled the funds, prosecutors said.
Cosmo also operated Premium Protection Plan LLC, which
offered Agape investors policies claiming to insure their principal and a portion of their expected interest in case of a
default. Cosmo was firm’s president and owned 51 percent of Premium’s shares, the U.S. said in the indictment.
According to the indictment, Cosmo made very few of
the purported loans and grossly inflated any profits from these entities. He is also accused of drawing upon Agape Merchant
accounts at Bank of America for his own use. He then used money solicited from new investors to pay off earlier investors,
Cosmo also used investor funds to pay for limousines,
fund a children’s baseball league and pay off a restitution order to victims of his earlier fraud, federal investigators
said in an affidavit released at the time of his arrest.
He also invested more than $100 million in commodity
futures trading accounts, with losses of about $80 million, agents with the U.S. Postal Service said in January.
Assistant U.S. Attorney Grace Cucchissi said at a hearing last week that investigators determined
that Agape paid its brokers $63 million as part of the fraud scheme, compared with an earlier estimate of $55 million. Postal
Inspectors said Cosmo paid the brokers, some of whom were ex-convicts with criminal records that included robbery and heroin
importation, to recruit investors.
Cucchissi said investigators have identified victims
of the alleged fraud in Hong Kong, Germany, Switzerland, Brazil, China and Colombia.
The case is U.S. v. Cosmo, 09-CR-255, U.S. District
Court, Eastern District of New York (Central Islip).
Economy Unearthing 'Rampant Ponzimonium'
Commissioner Bart Chilton of the U.S.
Commodity Futures Trading Commission said scam artists are increasingly being uncovered amid the floundering economy, unearthing
"rampant Ponzimonium."..."The Ponzi scamsters we have caught certainly didn't live low-profile
lives," Chilton said. "They used their stolen money for everything from expensive cars and boats, to clothes and jewelry,
homes and ranches."
The commissioner's comments come in
the wake of...disgraced financier Bernard Madoff's decades-long Ponzi scheme...and Texas financier R. Allen Stanford, who
stands accused of running an $8 billion Ponzi scheme. Chilton said these schemes have led many
investors to question the safety and soundness of their financial assets and double-check the legitimacy of their assets.
According to Chilton, the CFTC is in the process of investigating hundreds of individuals and entities,
many of which are related to Ponzi scams.
Pobres, víctimas preferidas de estafas piramidales
25 de noviembre de 2008
LA PAZ (AP) - Familiares de inmigrantes que envían remesas a Bolivia, funcionarios públicos
que cobraron jubilaciones en Perú, campesinos y gente de clase media en Colombia son el blanco preferido de las estafas piramidales,
un delito inventado hace más de un siglo, que sigue cobrando víctimas, sobre todo entre los más pobres.
En Ecuador también fueron estafados jueces, políticos, jefes policiales y militares en un sonado
caso descubierto en 2005 cuando el presunto estafador apareció muerto, según expertos que participaron en un Seminario Internacional
sobre estafas en pirámide realizado en La Paz la semana pasada.
Miles de millones de dólares son captados por delincuentes que ni siquiera manejan un software
sofisticado. "Un disco duro con la lista de los clientes es suficiente", dijo Camilo Valdivieso, asesor de la Superintendencia
El dinero fluye tan rápido y en tal cantidad que en Perú las autoridades hallaron "habitaciones
abarrotadas de billetes" enmohecidos en 1993 en una empresa intervenida, reveló Eduard Ascensio Domínguez de la Superintendencia
de Banca y Seguros de ese país.
Con frecuencia cuando sale a luz pública el fraude provoca crisis sociales debido a que las
víctimas, que se cuentan por miles, se movilizan, irónicamente en defensa del estafador, con la ilusión de recuperar sus ahorros.
"Esos desórdenes públicos impiden a veces que las autoridades actúen mejor", dijo Valdivieso.
"Son masas activas que muchas veces son financiadas por los mismos estafadores", acotó Ascensio Domínguez.
El caso más reciente ocurre en Colombia, donde el gobierno acaba de intervenir varias de estas
firmas ante la sospecha de que lavaban dinero del narcotráfico.
La más grande DMG, manejada por un ex panadero de 28 años estafó, según estimaciones de las
autoridades, a 200.000 familias y captó ahorros de la gente por 435 millones de dólares sólo este año.
El caso tuvo repercusiones inmediatas en Ecuador donde la policía allanó locales de captación
ilícita de dinero en Quito, Guayaquil, Cuenca y Lago Agrio.
Al principio estas operaciones son legales, operan silenciosamente, inventan empresas de fachada
y hasta colocan anuncios en la televisión, lo que hace difícil detectarlas. Se ubican en barrios estratégicos donde fluye
el comercio informal y captan ahorros con la promesa de jugosos intereses.
En Bolivia una de ellas llegó a financiar un equipo profesional de fútbol entre 1992 y 1993.
Una compañía intervenida en La Paz a principios de año prometía duplicar el capital ahorrado
en ocho meses y ofrecía casas y autos para captar más dinero, dijo el superintendente de Bancos de Bolivia, Marcelo Sabalaga.
Otra en Perú pagaba jugosas comisiones a clientes que convencían a otros a entregar sus ahorros. En Colombia ofrecían entre
70 y 150% de intereses mensuales.
Las estafas piramidales son organizadas alrededor de "negocios imposibles de realizar". "Funcionan
mientras siguen ingresando fondos y llega un momento en que los depósitos de la base ya no cubren los intereses de los depósitos
anteriores. En ese momento la pirámide colapsa y el estafador desaparece", explicó el investigador boliviano, Oscar Pamo.
No fue el caso de Colombia, donde DMG diseñó un sofisticado sistema de captación de recursos
a través de la entrega de bienes, servicios y dinero en efectivo a cambio de ahorros. La empresa no había entrado en cesación
de pagos, pero las autoridades la intervinieron ante la sospecha de que se alimentaba con recursos de actividades ilícitas.
El primer caso documentado de esta forma de estafa ocurrió en Boston, Estados Unidos, con el
italiano Charles Ponzi, que amasó una fortuna después de la Primera Guerra Mundial con sellos postales.
Quizá la más grande sea la desbaratada en España en 2006. Unos 400.000 españoles perdieron hasta
5.100 millones de euros en un fraude piramidal basado en sellos postales que operó durante 25 años con la promesa de atractivos
intereses, según se expuso en el seminario.
Esta forma de embaucar puede ser considerada como uno de los "virus financieros más perniciosos",
señala un documento distribuido por los organizadores.
Florecen en medio de la crisis o en tiempos como los actuales de abundante liquidez financiera
por el auge de precios de las exportaciones. "En los 80 fueron timados en Bolivia miles de mineros que habían cobrado sus
indemnizaciones tras quedar cesantes. Cincuenta millones de dólares de unos 20.000 ahorristas se esfumaron entonces", señaló
En Ecuador un notario del pueblo de Machala en la Provincia del Oro llegó a captar entre 400
y 1000 millones de dólares que se esfumaron entre 1992 y 2005 en un caso de novela que salió a la luz cuando el funcionario
Entre los 30.000 depositantes figuraban empresarios, agricultores, jueces, militares, policías
y profesionales. La conmoción fue tal en Ecuador, recordó Valdivieso, que la turba llegó a profanar la tumba del notario para
cerciorarse que estaba muerto ante el rumor de que el hombre se había fugado con el dinero.
En Perú la empresa Clae desbaratada en 1993 estableció con eficacia mecanismos ilegales para
garantizar el cobro de préstamos a través de un sistema de llegaba a utilizar la fuerza bruta. Más de 150.000 peruanos fueron
estafados por un monto de 350 millones de dólares por un sujeto que tras salir de la cárcel por estafa volvió a engañar a
gente que siguió confiando en él.
A principios de este año la Superintendencia de Bancos de Bolivia intervino la empresa Roghel
de un persuasivo ex pastor evangélico que captó unos 40 millones de dólares a 20.000 personas en poco tiempo.
Los estafadores dicen a sus clientes que sus inversiones están afuera del país en empresas que
operan en la bolsas pero que nadie conoce. Una de ellas, tras ser intervenida en Bolivia, colocó un aviso en los diarios anunciando
que había sido estafada por su socia mayor por lo que los ejecutivos tuvieron que viajar a Estados Unidos para recuperar los
En Colombia uno de los abogados de DMG renunció a la defensa porque había sido engañado por
sus clientes cuando presentó a dos extranjeros cercanos a esa empresa como socios de un conocido magnate estadounidense.
Los mecanismos de control no siempre son eficientes y oportunos, reconocieron los expertos y
por ello recomendaron a los países a esforzarse para reforzar sus legislaciones frente a hábiles estafadores que se ingenian
nuevos métodos para engañar a la ley.
Una tarea urgente, señalaron, es incrementar las campañas de información y prevención para evitar
que más incautos caigan en la trampa.
Sabalaga señaló que "la norma debiera ser más severa porque desde el inicio el estafador tiene
la intención de delinquir", lo que no está legislado.
Una gran mayoría de los víctimas son engañadas por una falsa ilusión pero otros son una mezcla
de "ingenuos y malévolos", y por tanto se constituyen en cómplices, lo que tampoco legisla la ley, dijo el funcionario boliviano.
Fiserv Inc., which already has been named in two class-action
suits for its alleged role in “aiding and abetting” Ponzi schemes, is likely to face a third suit, this time related
to the Bernard Madoff scandal...Fiserv-owned companies acted as custodians for self-directed IRAs
and had a contract with $300 million Ponzi scheme perpetrator Louis Pearlman In June 2008, Fiserv
agreed to pay an $8.5 million settlement in a class action case filed in U.S. District Court in California. That case involved
a $100 million Ponzi scheme byD.W. Heath & Associates.
El fiscal general de Nueva
York, Andrew Cuomo, acusó el
lunes a J. Ezra Merkin de fraude
por supuestamente haber
"traicionado a cientos de inversionistas"
US$2.400 millones en dinero
de sus clientes, sin
conocimiento de estos, hacia
la multimillonaria operación
Ponzi de Bernard Madoff.
Merkin -financista de
Nueva York, líder filántropo y ex titular del directorio de la compañía financiera GMAC, recaudó miles de millones de dólares
para obras de caridad, universidades, fondos e inversionistas individuales- mintió sobre la asignación de un gran monto de
estas inversiones a Madoff, no divulgó el conflicto de intereses y recibió más de US$470 millones en comisiones procedentes
de sus fondos de inversión, según la queja.
"Merkin se presentó a
los inversionistas como un gurú de inversiones (...). En realidad, era un mercader maestro", dijo Cuomo en la acusación.
Bloggingheads: Obama's Ponzi Scheme
Law professors Jack Balkin,
left, of Yale University and Eric Posner of the University of Chicago discuss whether President Obama could get stuck in the
political version of a Ponzi scheme.
improvisational daring of a high-wire aerialist. Despite the pain his crimes have wrought, a dark side in each
of us cannot but admire the sheer nerve of the man
(Fortune Magazine) -- In a year
of fabulous frauds, the one that glitzy Manhattan attorney Marc Dreier has been charged with is in some ways the most fabulous
of all. Not the biggest, of course. The biggest fraud of
2008 was metaphorical: the nation's economy itself, which had been built upon house-of-cards financial products. The most
tragic fraud of the year was Bernie Madoff's decades-long Ponzi scheme, which gulled charities, widows, and orphans out of
tens of billions of dollars while whistleblowers blew themselves hoarse before deaf and dumb regulators. Yet Dreier's comparatively modest, alleged $700 million fraud, which left victims with $400 million in losses,
was sui generis. What differentiated it from the pack was that it was just so much more - well, we don't want to use the precise
word that comes to mind, but "brazen," "cheeky," and "cocky" begin to capture it. While Madoff did his dirty work in seclusion behind locked doors, Dreier allegedly duped his victims with the
successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding
money-making formula. The essential idea is that the mark, Mr. X, makes only one payment. To start earning, Mr. X has to recruit
others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go
on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the
''businesses'' seldom involve sales of real products or services to which a money value might be easily attached. However,
sometimes the ''payment'' itself may be a non-cash valuable. To enhance credibility, most such scams are well equipped with
fake referrals, testimonials, and information. Clearly, the flaw is that there is no end benefit. The money simply travels
up the chain. Only the originator (sometimes called the "pharaoh") and a very few at the top levels of the pyramid make significant
amounts of money. The amounts dwindle steeply down the pyramid slopes. Of course, the worst off are at the bottom of the pyramid:
those who subscribed to the plan, but were not able to recruit any followers themselves.
Some network ormulti-level marketingbusinesses,
which sell real products and rely on the price differentials between the manufacturer's dispatch ramp and the retail counter,
may verge on the borderline between ''smart'' and ''scam''. When a pyramid does involve a real product, such asHoliday Magiccosmetics
in the United States in the 1970s, new "dealers" who've paid enrolling fees are encouraged, in addition to selling their products,
to become "managers" and recruit more new "dealers" who will also pay enrolling fees. As the number of layers of the pyramid
increases, new recruits find it harder and harder to sell the product because there are so many competing salespeople. Those
near or at the top of the pyramid make a lot of money on their percentage of the enrolling fees and on commissions for the
supplied products, but those at the bottom are left with inventories of products they can't sell. However, mostmulti-level marketingbusinesses
are not pyramid schemes.
Pyramid schemes are not to be confused withPonzi schemes, named afterCharles Ponzi. In a Ponzi scheme, all new money is paid to "Mr. Ponzi"
for investment in his incredibly profitable business and he distributes a portion of it to other members as "interest" or
"investment income" whereas in a pyramid, money is paid to the next level upward in the pyramid.
that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit
earned. The Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The perpetuation
of the high returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order
to keep the scheme going.
system is destined to collapse because the earnings, if any, are less than the payments. Usually, the scheme is interrupted
by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered
securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.
The scheme is named afterCharles Ponzi,who
became notorious for using the technique after emigrating fromItalyto
1903. Ponzi did not invent the scheme (Charles Dickens' 1857 novelLittle
Dorritdescribed such a scheme decades before Ponzi was born, for example),
but his operation took in so much money that it was the first to become known throughout the United States.His original schemewas
in theory based onarbitraginginternational reply couponsfor
postage stamps, but soon diverted investors' money to support payments to earlier investors and Ponzi's personal wealth.
Whenever you find you
are on the side of the majority, it is time to pause and reflect
--- Mark Twain
We have never observed
a great civilization with a population as old as the United States will have in the twenty-first century; we have never observed
a great civilization that is as secular as we are apparently going to become; and we have had only half a century of experience
with advanced welfare states...Charles Murray
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