Ponzi scheme - Morningbull

• The novel Chance by Joseph Conrad depicted a Ponzi scheme in 1914 before Ponzi
himself had hit the scene. Conrad's scammer "de Barral" offered ten percent interest
on deposits in his operation "without system, plan, foresight, or judgement".
• On March 22, 2000, four people were indicted in the Northern District of Ohio, on
charges including conspiracy to commit and committing mail and wire fraud. A
company with which the defendants were affiliated allegedly collected more than $26
million from "investors" without selling any product or service, and paid older
investors with the proceeds of the money collected from the newer investors. [29]
• In late 2003, a scheme by Bill Hickman, Sr., and his son, Bill Jr., was shut down. He
had been selling unregistered securities that promised yields of up to 20 percent; more
than $8 million was defrauded from dozens of residents of Pottawatomie County,
Oklahoma, along with investors from as far away as California. [30] Hickman was
sentenced to 8 years in state prison.
• In December 2004, Mark Drucker pleaded guilty to a Ponzi scheme in which he told
investors that he would use their funds to buy and sell securities through a brokerage
account. He claimed that he was making significant profits on his day trades and that
he had opportunities to invest in select IPOs that were likely to turn a substantial profit
in a short period of time. He promised guaranteed returns of up to fifty (50%) percent
in 90 days or less. In less than two years of trading, Drucker actually lost more than
$850,000 in day trading and had no special access to IPOs. He paid out more than $3.6
million to investors while taking in $6.3 million. [31][32]
• In June 2005, in Los Angeles, California, John C. Jeffers was sentenced to 168 months
(14 years) in federal prison and ordered to pay $26 million in restitution to more than
80 victims. Jeffers and his confederate John Minderhout ran what they said was a
high-yield investment program they called the "Short Term Financing Transaction".
The funds were collected from investors around the world from 1996 through 2000.
Some investors were told that proceeds would be used to finance humanitarian
projects around the globe, such as low-cost housing for the poor in developing nations.
Jeffers sent letters to some victims that falsely claimed the program had been licensed
by the Federal Reserve and the program had a relationship with the International
Monetary Fund and the United States Treasury. Jeffers and Minderhout promised
investors profits of up to 4,000 percent. Most of the money collected in the scheme
went to Jeffers to pay commissions to salespeople, to make payments to investors to
keep the scheme going, and to pay his own personal expenses. [33]
• In February 2006, Edmundo Rubi pleaded guilty to bilking hundreds of middle and
low-income investors out of more than $24 million between 1999 and 2001, when he
fled the U.S. after becoming aware that he was under suspicion. The investors in the
scheme, called “Knight Express”, were told that their funds would be used to purchase
and resell Federal Reserve notes, and were promised a six percent monthly return.
Most of those bilked were part of the Filipino community in San Diego. [34]
• In April 2006, Hank Hankley and Snyder Nguyen fled from China after the bilkery of
more than $3 million from investors in the Shanghai Stock Exchange. They remain at
large. Hu Jintao and in conjunction with the Falun Gong movement have issued a
$500 thousand reward for their capture.