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Ponzi Scheme

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NEWS
September 17, 2011
Letter writer Iver Mindel calls Social Security a "Ponzi scheme" because the scam invented by Charles Ponzi, for whom the fraud is named, collapsed when he could no longer find enough new investors to pay of his previous victims ("Ponzi would be jealous of Social Security," Sept. 15). But the Social Security system will not lack "new investors" as long as Social Security contributions are mandated via payroll deductions. Mr. Mindel and Texas Gov. Rick Perry may not like the Social Security system, but it is mendacious to call it a "Ponzi scheme.
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NEWS
By Amanda Yeager, ayeager@tribune.com | December 31, 2013
Genevievette Walker-Lightfoot didn't have the same childhood dreams as a lot of her counterparts growing up. Rather than aspiring to be a police officer, prima ballerina or athlete, Walker-Lightfoot always knew she wanted to be a lawyer. The profession, she said, fit her personality. "You have to be a little OCD," she said. Walker-Lightfoot got her wish. The Columbia-based lawyer has a career history that includes discovering elements of Bernie Madoff's Ponzi scheme as an investigator for the Securities Exchange Commission and now runs her own firm off of Little Patuxent Parkway.
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BUSINESS
By Gus G. Sentementes | gus.sentementes@baltsun.com | February 18, 2010
Medifast Inc. filed a $270 million defamation lawsuit on Thursday against a felon-turned-fraud investigator for making allegations over the past year that a subsidiary of the nutritional products company was operating as a Ponzi scheme. The Owings Mills company is suing Barry Minkow and his Fraud Discovery Institute in California. Medifast said in a statement that Minkow, who spent 7 years in federal prison for fraud he committed with his carpet-cleaning company, had issued "false and misleading reports" in an attempt to manipulate and profit from a drop in Medifast's stock price.
NEWS
By Doyle McManus | December 29, 2011
A year ago, soon after the Tunisian uprising, I demonstrated my powers of prediction in a column about the democracy movement in the Arab world. The revolution in Tunisia, I wrote, "arose from local circumstances that don't foretell what will happen anywhere else. " Three weeks later, Egypt's Hosni Mubarak fell, and the Arab Spring was in full bloom. This brings me to the subject of today's column: a confession of my year's errors and omissions (along with a mention of one or two things I got right)
NEWS
By Peter Morici | September 21, 2011
When established in 1935, Social Security made its first payments to Americans age 65. These first recipients never contributed and were paid from contributions made by younger Americans. Those Americans and successive generations believed their contributions were investments, and that they would be paid at retirement by the earnings on those investments. In fact, those younger Americans were paid by the contributions of successive generations of "investors," as the federal government spent their money to help finance operating deficits.
BUSINESS
By BLOOMBERG NEWS | December 4, 1999
NEW YORK -- The sentencing of Patrick Bennett, convicted of 42 fraud and money-laundering counts in what prosecutors called the nation's biggest Ponzi scheme, was postponed yesterday as a federal judge threatened to impose a longer jail term if Bennett does not reveal where the stolen money went.Prosecutors said thousands of small investors were cheated in the $700 million scheme by Bennett, 46, former chief financial officer of Syracuse, N.Y.-based Bennett Funding Group Inc.Long jail term possibleU.
BUSINESS
By Paul Adams and Paul Adams,Sun reporter | March 14, 2007
Ferris Baker Watts said yesterday that two traders will be allowed to return to work while the brokerage and federal officials probe trades on behalf of a former client accused of stealing millions of dollars from investors. The two are among six top executives and traders in Baltimore and Hunt Valley who either resigned or were placed on leave in the months after the company's outside counsel and federal investigators began looking into the trading activity. Institutional traders John Belgrade and Mark LaVerghetta, who will return to work this week, helped process trades for a Cleveland man whom the Securities and Exchange Commission says took in $50 million from investors and diverted some of it to make inappropriate stock trades through accounts at Ferris and elsewhere.
NEWS
By Matthew Dolan and Matthew Dolan,Sun reporter | March 3, 2007
With degrees from the Gilman School, Cornell University and the University of Maryland School of Law, David McDowell Robinson seemed primed for legitimate success. Instead, federal prosecutors said this week that the 56-year-old Baltimore CEO orchestrated a complicated $8 million Ponzi scheme that lured in more than 900 investors, including victims of Hurricane Katrina. It was nothing new, according to state and federal authorities. Arguing yesterday to keep Robinson behind bars before his trial, Assistant U.S. Attorney Jefferson M. Gray, who prosecuted Robertson in the mid-1990s for similar schemes, called the scope of the alleged financial shenanigans "simply astonishing."
NEWS
By Matthew Dolan and Matthew Dolan,Sun reporter | January 3, 2008
Nearly eight years in prison apparently did little to change David McDowell Robinson. Robinson, an Ivy League graduate whose sterling academic resume belied his penchant for financial schemes, pleaded guilty in federal court in Baltimore yesterday to devising a large Ponzi scheme that lured more than 850 investors, including victims of Hurricane Katrina. Prosecutors said Robinson's scheme attracted get-rich-quick investors who lost more than $1.2 million. It was almost identical to the operation Robinson was convicted of running more than a decade ago, government lawyers said.
NEWS
By Walter Hamilton and Tina Susman and Walter Hamilton and Tina Susman,Tribune Newspapers | June 30, 2009
NEW YORK - -Bernard Madoff was sentenced Monday to the maximum 150 years in prison for his multibillion-dollar fraud scheme, which a federal judge called "staggering." "The message must be sent that Mr. Madoff's crimes were evil," said U.S. District Judge Denny Chin in handing down what in essence was a life term for the 71-year-old investor. Chin, noting that the Ponzi scheme ran for more than 20 years, wasn't convinced that Madoff was sorry or was cooperative with authorities in the continuing investigation into others who helped him bilk funds.
NEWS
December 27, 2011
The compromised payroll tax cut sounds good on paper, but this wasn't really a tax cut. Real tax cuts are offset by lower government spending, fewer bureaucrats and smaller government - and result in economic growth as capital is redirected into investment. This so-called "tax cut" for pizza money is nothing but a fresh raid on Social Security. The effect will be yet another $200 billion drain on the trust fund, which is nothing but an accounting fiction given the bad shape it's in. The 12.4 percent payroll tax from today's workers - which will now be lowered for two months to 8.4 percent - goes into the Social Security pot and, like a Ponzi scheme, gets paid out to today's retirees until the money runs out. But Congress, both Democrats and Republicans, aren't thinking about that.
NEWS
September 29, 2011
It's unfortunate that an economist such as Peter Morici ("Yes, Social Security is a Ponzi scheme," Sept. 22) would take a partisan political position on Social Security and spread needless alarm about its future by baselessly calling it a Ponzi scheme. Ponzi schemes are short-lived investment frauds. Social Security is a social insurance program which has paid benefits for over 70 years and is projected, under very pessimistic economic assumptions, to be able to pay full benefits for the next 27 years and 80 percent of scheduled benefits into perpetuity.
NEWS
September 25, 2011
Peter Morici's characterization of Social Security as a Ponzi scheme in his recent opinion piece ("Yes, Social Security is a Ponzi scheme," Sept. 22) is an affront to all intelligent people. In the first place, a Ponzi scheme is a deliberate attempt by a "snake oil salesman" to convince gullible investors that they will profit tremendously in a short period of time. The good majority of those who participated in Social Security in 1935 were not destined to ever collect. That's because people in those times did not live to the ripe old age of 65. Those who joined when they were in their 20s and on paid in but, in large part, never collected.
NEWS
September 24, 2011
It is always depressing when you see evidence of a political point of view overcoming intellect, but particularly so in Peter Morici's commentary on Social Security ("Yes, Social Security is a Ponzi scheme," Sept. 22). He forgets that Social Security is a government program than can compel participation and set both taxes and disbursements at any level it chooses. Charles Ponzi had none of these advantages so that analogy is weak. It is not the case that "such a scheme could only continue if the working-age population grew more rapidly than the number of retirees.
NEWS
By Peter Morici | September 21, 2011
When established in 1935, Social Security made its first payments to Americans age 65. These first recipients never contributed and were paid from contributions made by younger Americans. Those Americans and successive generations believed their contributions were investments, and that they would be paid at retirement by the earnings on those investments. In fact, those younger Americans were paid by the contributions of successive generations of "investors," as the federal government spent their money to help finance operating deficits.
NEWS
September 14, 2011
There have been recent accusations by some politicians running for president that Social Security is a "Ponzi scheme. " Others say this type of talk is a politically motivated scare tactic. Let's examine the facts. Charles Ponzi was an Italian immigrant who bilked millions of dollars out of thousands of hopeful investors in the 1920s, in what has since become known as a Ponzi scheme. Essentially, he took money from investors and instead of investing it wisely, or holding it in trust, he spent it. He then paid back old investors with money he took from new investors.
BUSINESS
By Sean Somerville and Sean Somerville,SUN STAFF | September 21, 1999
Attorney General J. Joseph Curran Jr. said yesterday that his office had shut down a Ponzi scheme run by an Ellicott City man who solicited more than $12 million from more than 500 investors.The Securities Division of the attorney general's office obtained a temporary restraining order against E. Robins Rich, 79, of Ellicott City and his company, Starboard Associates of Baltimore.Baltimore Circuit Judge Evelyn O. Cannon ordered the assets of Starboard frozen and appointed a temporary receiver to take control of the company's assets.
NEWS
September 14, 2011
There have been recent accusations by some politicians running for president that Social Security is a "Ponzi scheme. " Others say this type of talk is a politically motivated scare tactic. Let's examine the facts. Charles Ponzi was an Italian immigrant who bilked millions of dollars out of thousands of hopeful investors in the 1920s, in what has since become known as a Ponzi scheme. Essentially, he took money from investors and instead of investing it wisely, or holding it in trust, he spent it. He then paid back old investors with money he took from new investors.
NEWS
September 13, 2011
If there was still any doubt that Social Security is the proverbial third rail of American politics — that is, potentially deadly to the touch — Gov. Rick Perry has provided the electrifying answer: You don't mess with the monthly checks, Texan. At a presidential debate in California last week, Mr. Perry decried Social Security as a "Ponzi scheme to tell our kids that are 25 or 30 years old today, you're paying into a program that's going to be there. Anybody that's for the status quo with Social Security today is involved with a monstrous lie to our kids, and it's not right.
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