A Florida federal court has defined a Ponzi Scheme as follows: “A Ponzi scheme is a ‘phony investment plan in which monies paid by later investors are used to pay artificially high returns to the initial investors, with the goal of attracting more investors.’ In order to prove the existence of a Ponzi scheme, the Receiver must establish that: (1) deposits were made by investors; (2) the Receivership Entities conducted little or no legitimate business operations as represented to investors; (3) the purported business operations of the Receivership Entities produced little or no profits or earnings; and (4) the source of payments to investors was from cash infused by new investors.” 611 F. Supp. 2d 1299 (M.D. Fla. 2009) (citations omitted).
What is a Ponzi Scheme?
April 23, 2011 By
