Two Alberta men, Milowe Allen Brost and Gary Allen Sorenson, have been charged by the RCMP with allegedly running a Ponzi scheme that attracted more than $100 million from investors. The scheme’s marketing was based on gold mining and investors were promised a high rate of return along with tax advantages.
RCMP were investigating the scheme for more than three years before charges were laid. This will be maddening for those who lost money over the last three years. To lose money in a scheme already believed to be a fraud by authorities has to be infuriating.
This type of story is all too familiar lately. Shocked investors will be hoping that the money will be found, but if it really is a Ponzi scheme, it is very likely that almost all of the money is long gone. To investors in Ponzi schemes, it feels like the money disappears suddenly. In reality years of account statements were fantasies because the money was stolen over time.
Some media reports feed into this feeling that investor money disappears suddenly just before the Ponzi scheme is detected. One gets the feeling that if authorities just look hard enough for the money, they might find it. Sadly, this just gives hapless investors false hope.
When I read this post,my first thought was 'oh no. not again.' How many people are going to continue to get duped by these schemes? The quest for high returns + safety - a figment of imagination.
ReplyDeleteAnonymous: Further reports have come out saying that investors were promised 30-40% returns per year. This is crazy. If anyone knew of a scheme with huge guaranteed returns, they'd keep it for themselves.
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