Beware Swindlers

I have an old book in my office with the alarmist title: The Robots Are Among Us. I do not feel concerned about robots. They are making us collectively wealthier.

I am worried about the swindlers among us. They steal a huge amount of money.

Think of Aussie media star Melissa Caddick. She allegedly swindled family members, friends, and others out of tens of millions of dollars. Her alleged scheme is a tried and true one, the Ponzi, pronounced pon-zee.

A Ponzi scheme involves promising high returns on investments and then providing high returns by giving investors a chunk of their own money back each year. To keep the corrupt practice going, the schemer must continually add money from new investors. Eventually, the scheme collapses because there is no real income, and too many investors ask for their money back. The schemer cannot return the investments because he or she has spent almost all of it on high living. Investors typically lose their entire investment.

Caddick disappeared soon after police visited her with a search warrant a few months ago. Later her foot was found in a running shoe on an ocean shore. She may have suicided in the ocean. Or she may have cut off her foot to feign death. If she did that, she deserves a medal for toughness. Personally, I would prefer to do a few years in prison.

The original Ponzi, Charles, was an Italian-born man who swindled people in North America. Give him credit for creative swindling and for making his name immortal. He swindled folks out of oodles of money and then spent years in prison. Upon release, he encountered an angry mob of people he had swindled. The U.S. deported him, and he died in poverty.

The modern face of the Ponzi scheme worldwide is that of Bernie Madoff.  He once ran the NASDAQ stock market. Later he swindled friends and others in the largest Ponzi scheme in history – stealing tens of billions of dollars. He died in a U.S. prison earlier this year.

How do we avoid getting scammed? I will offer three rules to follow.  First, if something financial seems too good to be true, figure that it is not true. Second, be careful with your dough — collect information like a detective before you invest your money. Third, if a one-footed woman offers you huge earnings on an investment, think twice. 


Photo by Giorgio Trovato on Unsplash


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