Charles Ponzi

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Charles Ponzi

Charles Ponzi

Give Me Your Money

Charles Ponzi Had All Of Boston Trying To Give Him Money

Anyone can work a simple swindle, but you have to be a special kind of con man to have your name become synonymous with “fraud.” Charles Ponzi pulled it off, though.

?It was a time when anything seemed possible?instant wealth, glittering fame, and fabulous luxury?and for a run of magical weeks in the spring and summer of 1920, Ponzi made it all come true. Promising to double investors? money in three months, the dapper, charming Ponzi raised the ?rob Peter to pay Paul? scam to an art form. At the peak of his success, Ponzi was raking in more than $2 million a week at his office in downtown Boston. Then his house of cards came crashing down?thanks in large part to the relentless investigative reporting of Richard Grozier?s Boston Post. A classic American tale of immigrant life and the dream of success, Ponzi?s Scheme is the amazing story of the magnetic scoundrel who launched the most successful scheme of financial alchemy in modern history.

After arriving in the U.S. from Italy in 1903, Ponzi knocked around in a variety of unskilled jobs that usually ended when he got into trouble for theft or cheating customers. A few years later, he moved to Canada, where he spent a hitch in prison for passing a forged check. When he eventually drifted back down to the U.S., he needed a way to make some quick cash.

Read more »

OakFX – Have you been caught?


Is David McEwen culpable?

A reader emails:

Let?s say, hypothetically, that I wanted to write a scam forex trading tool.??Something that offered 50-65% returns per annum.

Well trades are easy to make, like bets on black or red at roulette.??I?d let the software pick at random.??Hell, what do I know about future movements in the market anyhow???Some days you win, some days you lose, right?

Then I’d set the tool up so that it started out by releasing its positive trades as early as it can but make it hang on to negative trades for longer.??That way the impression of a more positive return would be given.??It could even make a bad day into a positive day with such an approach.

If it got some really bad trades I’d program it to keep them open indefinitely in fact – or as long as the margin call permitted.

Then the software would show good returns and for quite some time while the capital held out it would be positive more often than not

When selling it to folks, I could offer a 3 month guarantee of returns when using it from the outset with a full bank balance.??While the closed positive trades show up as a return and the capital outbalances the uncommitted negative trades I?d feel comfortable giving a guarantee that it would be positive for at least 3 months.

I could even offer a Gold version that would outperform the Silver variant too, but at a higher licence fee.??It would do exactly the same thing of course but it would look better simply because it was permitted to work with more capital.??It would see positive returns for longer too ? while the negative trades built up anyway.

Eventually the earnings, which are really just the plowed under capital – a la Ponzi, would start to dry up as the capital gets locked up by loss making trades that are “stuck” in the system. ? Read more »

A ponzi scheme called welfare

In the US and in Europe there is great debate about retaining “entitlements”?promised?by?successive?governments.

The same goes for New Zealand…especially with schemes such as ACC, Superannuation, interest free student loans and Welfare for Families. Those programmes all have to be paid for and as Margaret Thatcher once said…eventually you run out of other people’s money to spend.

Sometime soon our politicians are going to have to start being honest with us.

If there were not a single Republican, or none who got elected to any office, arithmetic would still end “Medicare as we know it,” for the simple reason that the money in the till is not enough to keep paying for it. The same is true of Social Security.

The same has been true of welfare state programs in European countries that are currently struggling with both financial crises and riots in the streets from people who feel betrayed by their governments. They have in fact been betrayed by their politicians, who have promised them things that there was not enough money to pay for. That is the basic problem in the United States as well.

We are not yet Greece, but we are not exempt from the same rules of arithmetic that eventually caught up with Greece. We just have a little more time. The only question is whether we will use that time to make politically difficult changes or whether we will just kick the can down the road, and keep pretending that “Medicare as we know it” would continue on indefinitely, if it were not for people who just want to be mean to the elderly.

In both Europe and America, there are many people who get angry at those who tell them the truth that the money is just not there to sustain huge welfare state programs indefinitely. But that anger might be better directed at those who lied to them by promising them benefits that were inherently unsustainable.

Neither Social Security nor Medicare has ever had enough assets to cover its liabilities. Very simply, there has never been enough money put aside to do what the government promised to do.

These systems operate on what their advocates like to call a “pay as you go” basis. That is, the younger generation pays in money that is used to cover the cost of benefits for the older generation. This is the kind of financial pyramid scheme that got Charles Ponzi put in prison in the 1920s and got Bernie Madoff put in prison in our times.

110 Years

? The Telegraph

Makes you wonder if we need someone to introduce proper laws here so scumbags like the Bridgecorp directors die in jail like Stanford will.

Allen Stanford, the Texan financier, has been sentenced to 110 years in prison for orchestrating a $7bn (?4.6bn) Ponzi scheme.

District Judge David Hittner handed the sentence to the 62-year old in a Houston court on Thursday after hearing more than two hours of arguments from government prosecutors and lawyers for Stanford.

US authorities had sought a 230 year sentence for a man they described as “a ruthless predator responsible for one of the most egregious frauds in history.” Stanford used the hearing to argue that “Stanford was a real brick-and-mortar global financial empire,” that only crumbled after the government accused the company of being a Ponzi scheme in 2009.

The sentence leaves Stanford facing the rest of his life behind bars and caps a startling fall from grace for a man who was judged to be worth more than $2bn in 2008.

Ethical vacuum at The Herald

Cactus Kate has picked a rather unsavoury scab in her article about the Herald and APN who appear to have confused the ethical lines between advertising, content, editorial and the high moral ground.

As readers will well know the Herald has been running a remarkable campaign of denigration about Mark Hotchin and Hanover, especially in the pst 10 or so days with story after story after story about how Mark Hotchin got scammed in a Ponzi scheme.

They posted an editorial as well taking the moral high ground and ticked off a judge and sounded all po-faced and sage in talking about name suppression. They spent a not inconsiderable amount of money with top end of town lawyers, reputed to be well over $100,000 attacking a victim’s rights to privacy as ordered by a court through a suppression order.

Sure I attacked suppression orders myself, but I only named kiddy fiddlers, rapists and thugs. This is why I have been so hot under?the?collar about this. The Herald went after victims and played for the high moral ground in doing so.

What Cactus Kate has done, and I am slapping myself for not thinking of this myself, is go straight to the source and asked Carrick Graham, spokesperson for Hotchin/Hanover about how much Hanover loot the Herald pocketed, all the while knowing that the two principals of Hanover were the victims in an elaborate Ponzi scheme.

The Hanover Group in total spent just with the NZ Herald. Here is the excerpt table that I received back from Graham:

2006 – $342,695 (Only November on)
2007 – $1,146,280
2008 – $328,807
2009 – $94,469 (all for FAI Finance)
Total – $1,912,251

As you can see from November 2006 onwards almost?$2 million?of Hanover related funds were placed in the Herald. The largest year saw over $1 million placed.

So The Herald, knowing as they did that the principles of Hanover had been scammed, continued to repeatedly take truck loads of loot for their advertising.

Cactus Kate rightly points out the ethical dilemma for the Herald in continuing to accept their advertising revenue and also waxing lyrical in cu/paste opinion pieces about Hanover and their various investment vehicles. She also quite correctly asks whether or not the gamblers investors in Hanover would have been more influenced by the Herald opinion pieces by Adam Bennett and Maria Slade?amongst?many others along with the millions in advertising featuring a former newsreader spent with the Herald than with the prospectus proffered by some spotty investment advisor across the desk of one of myriad of advisory houses who likewise pocketed Hanover coin.

I just bet that Hanover’s and Hotchin’s lawyers are licking their chops with joy, salivating at quenstioning ?gambler investor?after gambler investor just exactly where they obtained their investment advice from: “Was it from advertising? Or perhaps you read something in the paper? Or did you actually read and digest with some solid research from a truly independent investment analyst the prospectus provided by Hanover?

You can see where that is going to end can’t you. Badly…for the investors and possibly for APN.

The Herald took?the?high moral ground in spending huge amounts of money in overturning a victim’s name suppression, they stood on a?pedestal?and proclaimed their moral righteousness when all along they should have been on the naughty step for palming almost $2 million in investors?cash?to enable Hanover to take more investors cash from them, all the while knowing that Mark Hotchin was subject to a name suppression order.

Their retrospective moral righteousness is nothing but shameful?hypocrisy. I wouldn’t mind betting that Cactus Kate has much more information about other media outlets and journalists and the large amounts of cash they similarly received. If she wasn’t so busy working in her Guangdong sweatshop she could bother to return my emails.

Spinning like tops

Labour: Stop Breaking the LawI see that Grant Robertson and Trevor Mallard are trying desperately to spin that the VRWC has helped them get more signs printed.? This?is now a concerted campaign to run this line?because they’ve been caught with their pants down.

So Labour have broken road safety rules with campaign but they are also in breach of several other laws and by-laws as well.

Despite their brave attempts in the face of utter destruction of their vaunted campaign, I must also?point out to Labour?- that no matter how many of these illegal signs they print – they cannot erect them?- even if they’re not beside a road.


Because most councils have a rule about erecting ‘Vote’ hoardings more than a couple of months out from an election.? The Bay of Plenty is the only council in New Zealand that allows ‘Vote’ hoardings outside of?an election period.

So Labour can print as many signs as they like – putting aside the fact that they are ‘illegal’ from a traffic safety point of view – they also can’t be erected?anywhere by any of the gullible turkeys who are paying for them.

This is an epic fail as my 14 year old son would say.? Apart from breaking the road rules – they’re also breaking electoral rules.

Then there is the Securities aspect of this case. David Farrar points out that they are essentially running their own Ponzi scheme.

Desperately?trying to continue to raise money by getting people to “invest” in an illegal product certainly has all the hallmarks of a ponzi scheme. Perhaps the Securities Commission would investigate the ponzi?aspects?of the case.

Meanwhile there is a little job for the the Commerce Commission with a clear breach of the?Consumer Guarantees Act which?states in Section seven:

7?Meaning of acceptable quality

  • (1)?For the purposes of?section 6, goods are of?acceptable quality if they are as?

(a)?fit for all the purposes for which goods of the type in question are commonly supplied

These signs are?definitely?not fit for the purpose they are sold under. They can’t display them near a road and they can’t display them outside an election period, there actually doesn’t seem to be anything they can do with them and so they are unfit for any purpose and in breach of the Consumer Guarantees Act.

Labour seem to be going for the slam dunk and trying to break as many laws as possible with their ill-conceived sign campaign. But wait there’s more as the old infomercials used to say.

Readers may also ecall the huge song and dance Labour made about National supposedly investing in?billboards outside the regulated period during the?’05 campaign to avoid the expenditure coming under the spending cap?

This was one of the spurious reasons Labour quoted?for?imposing the odious and anti-democratic?Electoral Finance Act.

This ‘Stop’ campaign makes them?total hypocrites as well as law breakers.

I sincerely hope that when a non-English speaking tourist has an?accident?because of the bogus?’Stop’ signs – that Labour is prosectuted.? For Labour’s sake?I hope the accident isn’t a fatality.




Origin: 1890?95;??<?German,??equivalent?to?Schaden??harm?+?Freude??joy

Bernard Hickey, the NZ Herald and Stuff are all crowing about Mark Hotchin again. It is almost gleeful. A touch of H-Utu. This time about his name suppression and falling for a dirty Ponzi scheme back in 2o04. They are mocking a victim. They don’t mock the victims of all the other frauds out there so why mock the victim in this case?

The point of name suppression in many cases is the protection of victims, in this case Hotchin was the victim and yet the NZ Herald saw fit to seek to overturn a permanent name suppression order designed to protect victims. They did what Judge David Harvey said could not be done, that the only people who could overturn a court ordered permanent name suppression was either the victim or the court who ordered it in the first place.

It appears now that any name suppression can be validly challenged by any news?organization?or indeed any interested party seeking to crucify a victim.

My campaign against name?suppression?was for the removal of the?practice?for the criminals. The Herald’s actions and the?gleeful?vitriol and running of sensationalist headlines by financial commentators who are themselves a bunch of broken-arses by comparison. There is a old line that if you can’t do, you teach and if you can’t teach, you write about people who do. This fits the financial correspondents perfectly, who collectively probably don’t muster enough in assets to cover?the?amount lost by Hotchin and Finnigan in?the?Ponzi scheme.

Using the logic of Bernard Hickey:

Hotchin was given permanent name suppression, which has only now been lifted after a challenge from the NZHerald. Strategic Finance boss Kerry Finnigan was also duped and also got name suppression.

If only the Rotorua District Court judge James Weir hadn’t granted permanent suppression, thousands of Mum and Dad investors might not have lost over NZ$500 million in Hanover and over NZ$300 million in Strategic Finance…and counting. Thanks for that.

then none of these people should be anywhere near running a company or even investing or indeed offering advice:

Victims from big business include hedge fund manager Arki Busson and US property magnate Larry Silverstein, who is currently working to rebuild the World Trade Centre in New York.

A number of large banks, including UBS, Citigroup, Deutsche Bank and Bank of America, were also named in the filing.

From the world of politics, trusts belonging to the family of former US Secretary of State Henry Kissinger appear, as does the name of current New Jersey Senator Frank Lautenberg.

The full?list?of Bernie Madoff’s wealthy and famous victims is?available?on the internet in an easily accessible format. Is Bernard Hickey suggesting that none of those people should ever run a company or give investment advice and all should also be a target of derision for having the temerity to fall for a complex and elaborate long-term fraud?

In a Ponzi scheme, the Bank cops a?flogging?too, and are essentially part of the fraud. I hope that Bernard’s bank isn’t the same one as the bank used by Papple and West, Westpac. I note that Bernard Hickey has all the Westpac investment products listed on….given his new position shouldn’t he really be?recommending?to his readers that, since they participated and fell for the Ponzi scheme themselves then investors in Westpac would be best to take their money elsewhere.

Then again, some already did that when they walked out of the country with $10 million of Westpac’s cash. Funny thing is, I didn’t see?Bernard?Hickey telling Westpac customers to stop investing in the bank when they couldn’t keep track of $10 million. So long as Westpac keeps the cheques coming to then?Bernard?will stay mum.

The logical conclusion of Hickey’s farcical suggestions and “analysis” is that anyone, and I mean anyone, who has had an accountant nick cash from their firm, handed over funds to a Nigerian 419 fraud, or “invested” in a Ponzi scheme, or indeed thought Amway was a path to success, should be barred from running a company.

What is worse though is the history of the Herald’s involvement in this case. They clearly, back in 2004, used Hotchin and Finnigan as a confidential source for their story:

One prominent company director told the court he did not want the public to know he was “conned” for more than half-a-million dollars.

The man, who has been granted name suppression by Judge James Weir, said he was advised to apply for suppression because it would be better if the Papples and West were not publicly associated with his companies.

It was revealed in court that the man had been a director of 71 companies, including a prominent finance company, although he said he had recently moved to Australia and had resigned from a number of directorships.

It was important for him not to be connected with the Papples and West, as he had been “duped into doing an investment with people who conned me for a lot of money”, he said. “I don’t want to make that public.”

The man had told the court he invested $561,066 with the trio.

He received a payment of $120,000, followed by a further three sums totalling $336,000.

The Herald has known about this for 6 years and they shamelessly used the confidential information for their story then used that information 6 years later to over-turn a name suppression case. People should be very wary of providing confidential information to a Herald journalist from now on, they will turn on you and cut your heart out just to sell papers. They will betray a confidence to justify a taudry headline.

Not only that during this whole time they ran Hanover ads in their paper, and on their website,. They have performed the business equivalent of raping the victim all over again except they did it to sell papers.

Bernard?Hickey isn’t much better, he too took?advertising?revenue from Hanover. Did he know about this all along? Remember Bernard Hickey still writes for the Herald.

In the interests of fairness, surely the Herald and Bernard Hickey should pay back all the “dirty Hanover cash” they took while sitting on this information for 6 years. If the investors should have been told back then, then their cash for advertising is just as tainted as anyone elses.

To get back to the name suppression issue, the wonder is that the Herald isn’t in court seeking the overturning of every person’s name suppression but then a great many of those people won’t sell tell many papers, but Mark Hotchin’s name does.

Bernard Hickey and other financial media might like to think and enjoy the?schadenfreude but they should really hang their heads in shame at their utter hypocrisy and breach of their own ethics and standards that they hold so dear as the reason why they are superior to bloggers. If they had even a modicum of decency they would apologise and pay back all the filthy loot they took in advertising revenue and related puff pieces at the time.

If I was Mark Hotchin, or even one of his advisors, I would be laying a complaint with the Press Council for breaches of ethics.