All get-rich-quick schemes are essentially frauds. After all, there is
no such thing as a free lunch. Still looking for shortcuts and lucky breaks is
primordial human nature. Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi was a
crook but he was also a genius at what he did. Here I implore you to look at
the greatest pupils of Ponzi who swindled, scammed and slithered their way to
unimaginable riches.
Bernie Madoff: If one Carlo
Ponzi was alive today, he would definitely be a very proud man. Madoff, the greatest
of the Ponzi disciples, managed to steal an astonishing total of $65 billion!
His investment firm Bernard L. Madoff Investment Securities LLC, operated for
almost 49 years and at its peak was one of the Wall Street stalwarts. Although
the Securities and Exchange Commission had previously investigated him, it was
only when the house was about to tumble that he was exposed; by his own son. He
now has the rest of his life to reflect on his actions in prison. Netted: $65 billion
Allen Stanford: Billionaire,
enthusiast of everything sport and women, knight of Antigua and Barbuda, Allen
Stanford was the larger than life figure who financed one of the biggest
single-day payouts in the history of sport. Initially, he made his fortune
buying depressed property in 1980s during a real estate crisis and then selling
them when the market recovered. He then moved to the Caribbean and on to the
Ponzi path, starting a bank in Montserrat in 1985. Investigations against his
company Stanford Financial Group were started in 2009 and he was soon arrested.
He is currently awaiting trial. But is
free to roam the streets of society as he is out on bail. Netted: $7 billion
Tom Petters: Petters was a
renowned Minnesota businessman and philanthropist who once owned Polaroid. His
company claimed to use the investor’s money to finance the purchase of
electronics which were supposed to be resold to big box retailers. His scheme
was uncovered in 2008 and in 2010; he was sentenced to 50 years in prison. After repaying investors 3.2 billion dollars
in 2011 his sentence was reduced to 5 years, he was released from prison in
August 2014. Netted: $3.7 billion
Albanian Schemes: Probably the
only Ponzi schemes that sparked a civil uprising, these schemes also indirectly
led to 2000 deaths. After the collapse of communism, Albania’s economy became
dominated by pyramid schemes which were endorsed by the government. Eventually,
over two thirds of the nation’s population went on to invest in these schemes.
As the schemes collapsed in a heap in 1997, the Albanians took to the streets
and toppled the government. This uprising might also have fueled the later
unrest in Kosovo. Netted: – $1.2 billion.
Scott Rothstein: Famed lawyer who
turned law into a money making machine (more than it already is). He promised
high returns to investors from his supposedly clever manipulations of lucrative
settlements like whistle blowing and sexual harassment. Eventually, the plot
got too hot to handle and his cover was blown in late 2009. Rothstein then decided to dodge his fate and
fled to Morocco, leaving behind a suicide note. However, he was convinced to
return and is now serving a 50 year prison term. Netted: – 1.2 billion.
European King’s Club: Set up in
1991 by Damara Bertges and Hans Gunther Spachtholz, the European King’s club
was set up to help the ‘Little People’. Investors would buy a ‘letter’ for 1400
Swiss francs and would double their money in just a year. The groups
established a cult like presence and despite boasting a loyal investor base,
collapsed after two years. Bertges and
Spachtholz were given respective prison terms of 7 and 5 years. Netted: – $1.1 billion
Caritas: The Romanian scheme
started in 1992 as a limited liability company with only $783 in capital. They
promised investors eight times the money invested in just six months and
attracted millions of investors. They finally went bankrupt after just over two
years of operation, owing investors a total of $667 million. It was a huge
shock for a country still licking its communist wounds. The mastermind Iona
Stoica was given only one and a half year in prison for fraud. Netted: $667 million
Reed Slatkin: The co-founder of EarthLink and scientology minister,
Slatkin mostly dealt with the rich and famous of Hollywood. He used the usual
fake statements to dupe investors into believing he was something big. Until
the SEC shut him down in 2001, he had successfully sustained his operations and
had paid out about $279 million but like everything Ponzi, disaster was
inevitable. He was sentenced to14years in prison in 2003; subsequently he was
released in early 2014, for ‘good behavior”.
Netted: $593 million
Gerald Payne’s Greater Ministries International used biblical bilking
to shake up investors. His unique ministry preached that God wanted people to
be rich, which attracted a lot of greedy and god-fearing clients. His con was finally busted in 1999 and at his
trial; he was described as a "wolf in sheep's clothing" by the judge.
The five main church leaders received sentences ranging from 13 years for
Payne’s wife Betty and 27 years for Payne himself. Netted: – $500 million
Lou Pearlman: The boy band mogul
swindled listeners out of their time and investors out of their money. A look
at his record leaves one with the impression that he was as well rounded a
conman as there ever was. His intricate scheme managed to operate undetected
for over two decades before finally being discovered in 2006. Perlman decided to make a dash for it but was
discovered in Indonesia and was finally sentenced in 2008. He is currently
serving the third of his twenty five years at FCI Texarcana. Netted: $300 million.
