Ponzi Scheme Investigation

A ponzi scheme is a type of investment scam whereby the fraudster pays 'dividends' to initial investors with money taken from subsequent investors. Despite promising every investor exceptionally high returns with low risk, there is no legitimate investment.

It is only a matter of time before the ponzi scheme collapses. Once the pool of new 'investors' inevitably dries up, the scammer will disappear with any remaining proceeds. Meanwhile, ponzi scheme victims will be left to suffer their losses.

Although both types of fraud involve promising victims a high return in exchange for their financial investment, Ponzi and pyramid schemes are not the same. The key difference is the role that unsuspecting victims play in each scheme.

Whereas victims of a ponzi scheme invest their money into a managed portfolio and wait for a return, victims of a pyramid scheme are propositioned with the opportunity to earn more money by recruiting other investors. Each investor pays the investor who recruited them for the right to partake in the scheme.

Take the following measures to protect yourself against a ponzi scheme:

• Be wary of any investment opportunity that seems too good to be true, such as one that promises an extraordinarily high return with little risk.
• Perform thorough research on any business, project or person you are considering investing your money in. This due diligence will help to raise any alarms before it is too late.
• Seek advice from an impartial third party, such as an independent financial advisor, before you part ways with your hard-earning savings.

While ponzi schemes can be challenging to identify before their investors suffer significant losses, there are certain red flags to watch out for. Common warning signs of a ponzi scheme include:

• Questionably high rates of return with little or no risk
• Strangely uniform returns
• Scheduled returns that suddenly cease
• Terms that make it practically impossible to release rather than re-invest returns
• Investment documents with unfounded or inconsistent information
• Investment managers who are difficult to contact and slow to answer queries

By keeping an eye out for the above warning signs, you may be able to put a stop to the ponzi scheme before it brings you irreversible financial harm.

If you suspect that you are being targeted by a ponzi scheme, please contact CFTC immediately to arrange a consultation.

Yes, it is illegal to run a ponzi scheme. Consequently, the offender behind a ponzi scheme may face criminal charges if actionable evidence is uncovered against them.

Provided participants are unaware of any illegal business practices, the only offender(s) in a ponzi scheme is the original perpetrator(s) behind it.

If you believe that you have fallen victim to a ponzi scheme or know someone who has, please follow the below steps as soon as possible:

• Do not make any more investments in this scheme.
• Confirm the company's licence number on ASIC Connect's Professional Registers – or if it is even on a register.
• Report the scheme to Scam Watch, ASIC, your financial institution, local police and social media provider(s) so that each organisation is aware and able to assist you in recovering your losses.

Contact CFTC so that we can help you to track down the culprit behind the crime. This extremely sensitive and high-stakes process demands the expertise and resources of our professional investigators.

Ponzi scheme investigations typically take between one and three months. This estimate varies according to the sophistication of the scheme and whether you wish to take legal action against its orchestrator(s).

If the offender is successfully identified and located, our investigators can liaise with law enforcement officials to help file search warrants and/or criminal charges against them – a complex and time-consuming step that may extend the overall procedure.

The cost of a ponzi scheme investigation depends on the complexity of the scam, the losses incurred, and the jurisdiction in which the offence has taken place.

Before we begin the investigation, our investigators will present you with a tailored proposal that details a recommended budget to maximise the likelihood of a successful outcome.

The likelihood of a successful investigation rests entirely on the unique circumstances of the case at hand. The more admissible evidence our investigators collect, the greater the chances that you will be able to take legal action against the scammer.

To estimate the realistic likelihood of tracking down the offender who targeted you, we will conduct a preliminary assessment of your case. Equipped with this specialist insight, you may decide whether or not to proceed with the ponzi scheme investigation.