Ponzi schemes are the financial service crimes you can set your watch to. You know that somewhere out there, some former advisor dragging a trail of allegations may be in the middle of making hollow promises to investors and throwing dirt on the body in the form of fraudulent returns reaped from the manipulation of investors somewhere else.

It’s a tale as old as time. A 2020 Time Magazine piece naturally traces the Ponzi scheme back to the 1920 crime involving the man who lent his name to it, but traces of such deceptions go all the way back to Sarah Howe making false promises of profits in Boston in 1879. Veteran securities attorney Bill Singer once described it to Financial Planning as a game of three card monte being played on a street corner with a victim’s lifetime savings being hidden under one of the moving cards. 

But the case currently making its way through federal court starring a barred advisor from Florida and his two Brazilian business partners modernizes the con with a dash of crypto. Federal investigators say the trio managed to steal $100 million from investors hungry to get into the crypto game by bragging about their next-generation trading bot and positioning the advisor as a “genius” who could get them guaranteed returns.

In their minds, investors would soon be swimming in a sea of digital coins like Scrooge McDuck. In reality, the advisor had a history of bans and citations. And when the plan fell to pieces, his business partners fled back to Brazil. 

Check out the full story — and find out why the case stands as an “I told you so” moment for a securities litigation expert who has been keeping an eye on digital assets for years — at Financial Planning. 

Anything else on your mind? Drop me a line at [email protected]. Have a great rest of the week!

Regards,

Justin

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