Ponzi Nation
Atrios and others have been having some perverse fun tracking the number and frequency of banks getting eated. But there’s another disturbing trend passing largely unnoticed (save for its more spectacular examples): the number of Ponzi schemes the SEC busts up.
Counting just the schemes the SEC issues a press release on and labels a Ponzi scheme (and using the SEC’s most conservative estimate for the size of the scheme), there have been 19 Ponzi schemes in the last year, amounting to $17,848 million dollars in fraud (Bernie Madoff counts for the bulk of that–$17 billion–and I did not include Stanford’s scheme, since SEC has not used the word "Ponzi" in their public releases on it yet).
Date Name Amount (000s) 4/13/09 Maximum Return Investments 23,000 4/9/09 Richard Copeland 35,000 4/8/09 Shawn Merriman 17,000 4/6/09 Overseas China Fund 50,000 4/1/09 Gemini Fund 50,000 3/26/09 Millenium Bank 68,000 3/11/09 Equity Investment Management and Trading 40,000 2/19/09 Billion Coupons 4,400 1/15/09 CRE Capital Corporation 25,000 1/8/09 Joseph Forte 50,000 12/30/08 Creative Capital Consortium 23,000 12/11/08 Madoff 17,000,000 11/12/08 Biltmore Financial 25,000 10/30/08 Bottom Line and Summit 30,000 10/6/08 Norman Hsu 60,000 9/16/08 Cornerstone Capital Management 15,000 9/15/08 PIPE Investments 52,700 8/11/08 Wextrust 255,000 5/2/08 Safevest 25,000 17,848,100
And in an April 1 press release, the SEC said it had shut down 75 Ponzi schemes in the last two years (it only released a press release for one more Ponzi scheme in that time). In other words, the SEC has actually been shutting down more Ponzi schemes than the number of banks the FDIC eated.
Now, a lot of those schemes target a particular potentially vulnerable or trusting class of people. (One Ponzi scheme targeted the deaf, for example, and others targeted particular ethnic groups.)
Even accounting for the ways these schemers have instilled trust among their targets, this is still a big number of Ponzi schemes. Doesn’t anyone look for the tangible product at the end of a money-making scheme anymore?
“amounting to 17,848 million dollars in fraud” not sure here EW but do you mean billion? those millions and billions are hard for me to keep straight
Casino capitalism gone fucking wild
Maybe the Billionaires for Bush will show up at some of those tea parties. the folks who did so well under the Bush administration. These folks are hysterical
http://billionairesforbush.com/index.php
17.8 billion, or 17,848 million.
thanks
Great to see that list, EW!
This looks like it would be a handy tool for consumers researching banks. (With apologies to all who already know about it).
http://banktracker.investigati…..org/banks/
http://tinyurl.com/c7mkcc
Personally, I think it is more a matter of how greedy these people are! They WANT to believe that they will see the return that is promised, and perhaps some of them do. It is the poor suckers at the end who totally lose out.
I don’t know how actively the SEC has investigated the people that run these things, or how many others may turn up. The greed factor just astounds me, though… It seems like for the last 20 years (probably since Reagan) there has been an incredible focus on faster and bigger returns on investments, while there has been an equally incredible decline in national and corporate infrastructures. In other words, investors are demanding the faster and bigger returns at the expense of everything else. There is no real growth because eventually someone has to pay the piper for what has NOT been handled — either required equipment or loss of personnel.
Stated another way, I think that most public companies in the US are Ponzi schemes. It is all about appearances for investors and keeping that bottom line looking good.
How the heck can we get away from this mindset? It is totally idiotic and detrimental to any real economic growth…
Yup, that’s kind of where I was going with the title.
you’re giving mr ponzi WAAAAAAY too much credit
he never put so much effort and paperwork into the fleecing of his investors
or maybe you misunderestimate the amount of brainwork it takes to create this whirlwind of bullshit
But apparently fundamental to human society. A classic historical source, complete on-line:
This is not why economics is called the dismal science, but it does get toward why so many economists are of either a gloomy or a sardonic turn of mind.
Notwithstanding Ponzi-like features, sometimes I think Charles Ponzi’s name gets overused; after all, he produced nothing. At all. Had nothing to pay his current investors except the revenues from buy-in by his new one. No surplus from anywhere except the growth of the investor base was being generated.
But there are plenty of other scams.
The linebacker on roids from the Ran Diego Frightening Bolts was a Ponzi scheme??
Get out!
Somehow I should have figured you’d be the one to make that crack.
Different Shawn Merriman. I think.
The Ponzi scheme guy is in CO. Did Merriman get traded to the arch-rival Broncos in the off-season?
Heh. The Broncos are still tryin’ to fill their vacancy at QB.
At least they won’t have to launder so many hankies this year.
So are we, at least until Draft Day.
Though we do apparently have Drew Henson on the roster now.
Maybe Denver will make Kyle Orton available.
Is there any hope for Detroit – anything on the horizon? Hey, Miami went from 1-15 to the playoffs…
No.
This has been another edition of simple answers to simple questions.
Hey, geography hint for surfer dude, Miami ain’t got a lot in common with Deetroit.
Detroit don’t have “the Tuna” picking the “groceries” for them
thanks for playing, please play again …
I don’t know
you’d think a ponzi scheme would warrant more than a 4 game suspension …
Beckett got six games for throwing at Abreu.
I saw it happen, he didn’t mean, it just got away…
Sweet!
Oh wait, it’s not the Shawne Merriman Fund.
Though that might explain why your defense wasn’t up to snuff last year.
who knew that one guy would make such a difference? he was covering up for some pretty weak linebackers and safeties.
Snuff was the most legal thing they were consuming. Those Bolts didn’t get so frightening from simple wacky tabaccy.
Not if your targets are the new newly wealthy, who need tax deductions to hide it. As if paying tax on a third of found income were the end of the world. Wait until it goes up to 40% and their income shrinks to what’s earned.
we need to clarify who exactly was playin Fizzbin here
hat tip to boxturtle
or, more exactly, we need to find out how many different fizzbin players there are
an on a personal note, I recently became the caretaker of two turtles, anybody got any care tips ???
The SEC list doesn’t include our entry into the Corruption Contest here in Minnesota: Petters Worldwide, a supposed legitimate, up-and-coming conglomerate assembled by one Tom Petters. It included a number of legitimate businesses but it was exposed last September as essentially a Ponzi scheme. Petters was nabbed as he was trying to make arrangements for a private flight out of the country under a false identity. IIRC, Petters Worldwide was privately held, which probably explains why it wasn’t on the SEC list. The estimated take from the scam is estimated at between $2 and $3 billion.
Among the recognizable brands under his control
arewere Polaroid, Sun Country Airlines, and Fingerhut, all of which Petters picked up at fire sale prices when they were distressed. Here’s the search result for articles at the Star Tribune on Petters. More than you’ll ever want to know.Weren’t there two in MN? Sara mentioned another one some time back.
Minnesota has more jailed Ponzi schemers than Senators?
Dunno, though I think it has more alleged Ponzi schemers than Senators.
Then there’s the fraudster who’s aspiring to be both at once.
I don’t recall another one recently, but if Sara said there was she’s probably right. I think she pays a lot more attention to things than I do. We’ve been following the Petters saga because my wife worked in advertising for Fingerhut for 22 years before the previous management pulled the plug and dumped 4000+ employees onto the street. The demise of the ‘hut should be an HBS case study for its toxic blend of arrogance, incompetence and subtle malfeasance. Petters then bought the brand (most likely, it now appears, with PonziBucks) and facilities and partially resuscitated it.
“Weren’t there two in MN?
I don’t recall another one recently,”
The second one is a guy from Roseville, and he too is in Jail awaiting trial. Take was a little less than Petters. (Sorry, I can’t remember his name right now, but sooner or later it will emerge.)
“The SEC list doesn’t include our entry into the Corruption Contest here in Minnesota: Petters Worldwide, a supposed legitimate, up-and-coming conglomerate assembled by one Tom Petters. It included a number of legitimate businesses but it was exposed last September as essentially a Ponzi scheme.”
Well, the Irony is that Petters and Madoff had something in common, they both used a small boutique accounting firm in Bloomington for audit purposes. We’ll find out soon, Petters who is currently resident in the St. Paul Jail will be going on trial in about a month or so.
Billionaires for Obama! They are his true constituents.
Billionaires for tea parties. The working folk protecting the fat cats
and in other news, norm coleman has managed to make Minnesota a national joke, with a little help from Jack Cafferty
diaster accomplished ex-senator chicklets
OT: NYT’s Dealbook blog tells us that the financial mess has gone nuclear:
That’s what happens when you piss off the minions enough that they beat your CEO senseless while he’s working out in the company gym after announcing he’s crashed the company.
A little negligence goes a long way, don’t it?
Reminds me of a story – allegedly true – I heard while in the Army all those years ago. The not-so-liked company CO was required to sign on every supply requisition – no surprise, that. He’s known for not looking at what he’s signing. So, the supply clerk who’s getting ready to get his discharge and go home fills out a requisition form for “Tank, full tracked, 105 mm gun, M60A3, one each” and slips it into the deck of requisitions.
A couple weeks go by and our clerk is home enjoying civilian life. A large tractor trailer pulls up in front of the company building and the guys start unloading a nice, shiny, new tank. “The one you ordered, sir. That is your signature on the requisition, isn’t it, sir?”
can’t wait to see the congressional hearings on that one
Congresscritter: And your counterparty in those transactions was T.J. Houzhmanzadeh, Inc.?
Bankster: Um, yes.
Congresscritter: You realize the counterparty’s address was Teheran?
Bankster: Um, we thought he was that guy who plays for the Bengals. We were managing investments for him. Teheran’s a Kentucky suburb of Cincinnati, isn’t it?
objection, it isn’t the bank’s job to know where Fed Ex delivers somebody’s mail
the committee would like to thank senator torturemann (idiot Connecticut/Israel) for that imput
Err, the SEC missed this one, but the US Attorney didn’t. Of course, NJ Affordable Homes was mortgages and real estate, as opposed to securities.
But it was $80 mil, and so far 11 people have pleaded guilty.
Thanks.
I’m going to try to fill out the list, and find out what the SEC has counted among its 75.
OT – From an interview Jane Mayer did this weekend with Alternet about the release of the ICRC Report:
Glad to see Meyer saw the same thing in the report that I did.
I would never suggest she “borrowed” it from you as Jane Mayer is a good soul, but you did have it here first!
Oh, I’m sure she didn’t. (And besides, she didn’t make the same leap I did that they panicked after Abu Ghraib and the subsequent OLC battles with Goldsmith.)
It’s just reinforcement that I wasn’t lost in insignificant weeds. Sometimes I do worry, you know.
We need to get you on Rachel Maddow’s show! Seriously!
Spread the word Hotwheelers! EW on Rachel’s show or we’re not gonna watch any more.
Which brings up a point I’ve been thinking about recently.
With CIA Director Panetta’s announcement that the CIA will no longer operate its black sites “and has proposed a plan to decommission the remaining sites“, some might think that the US’s extraordinary rendition, detention and torturous interrogation policies are a thing of the past.
Think again!
If you think about it logically, by its very nature, our Government will always have in place policies and procedures for the detention and interrogation of terrorism suspects.
If the CIA was to find Ayman al-Zawahiri tomorrow, there could be no doubt that they would try to both detain and interrogate him.
So the logical questions arise of “where” and “how”.
That CIA Director Panetta says that the CIA itself will no longer run black sites does not say that black sites run by others will not be used, and for our “benefit”.
That CIA Director Panetta says the CIA itself will no longer use “enhanced interrogation techniques (torture), does not say that such methods by others will not be used, and for our “benefit”.
And while our focus seems at times to only fixate on the ringleaders of these policies like Bush, Cheney, Gonzales, Addington, Yoo, Haynes et al, remember that there were (and are) thousands and thousands of worker bees at all levels of the DoD, CIA and other government organizations who made these policies happen.
They too are invested in maintaining their freedom from criminal prosecution and imprisonment, and in many cases, they’re still employed throughout our Government.
Yeah what is taking Rachel so long. Get Marcy on. Oh yeah folks might realize that her team pulls things off of Marcy’s blog and mind
And another totally OT by way of Andrew Sullivan:
And as one of Andrew’s readers writes:
Simply marvelous!
i too have been hitting “replay” all day. what a story and what a voice.
Me too. That’s a genuine voice — she’s not belting or acting the song, as people who do show tunes often are; she’s singing from deep in the diaphragm, and she’s got everything down, inflection, pacing, doesn’t slide from note to note but meets each one smoothly.
That could be part of her culture, and she’s probably been doing as much local singing in West Lothian as she could. So she was more ready than they thought, and man, she ambushed me.
when she gets to the line “I had a dream my life could be, so different from this hell I’m living”, I freakin’ lose it.
and now to see how her future matches up with her dreams…
It was the perfect song for her to sing, eh? She knew, absolutely she knew what she could do with her voice, and then she picked that song.
I defy anyone not to be moved!
Despite the tendency of the TradMed (and even all of us) to always see “the sky is falling”, there is still real goodness in people and in this world.
Makes your day, don’t it?
Thanks MD–and Rosalind and skdadl, for convincing me to click through. It was well worth it.
Not a dry eye anywhere. I should have provided a hankie-required warning. *g*
Britain’s got talent indeed. One more teary eyed person.
Just up at TPM: someone in Congress wants to know how much AIG has been paying for
expensive, highly shined-up bullshitPR.http://tpmmuckraker.talkingpoi…..hp?ref=fp3
Maybe someone got cheezed at the news about Pig Missile Perino…?
ot Ew when the clip of the Chris Matthews, Frank Gaffney, David Corn wrestling match on Spain’s right to go after the Bush 6 comes up you are going to want to hear this one. This one will be all over the blogs tomorrow
Some San Diego Chargers and Padres got scammed pretty bad back in the late 90s.
It wasn’t a Ponzi scheme, but some kind of faith based, sports oriented fraud.
A snake oil salesman named John W. Gillette Jr befriended a bunch of professional athletes including Junior Seau and Eric Chavez and got them to invest $11 in his company called “Pro Sports Management International”. They were going to build a waterpark in Poway. The athlete trusted Gillette because he led prayer meetings and had a picture of Jesus on his wall.
Unfortunately for Seau and Chavez and the other investors, Gillette spent almost all of the money on himself. Gillette eventually plead guilty to 37 counts of grand theft and one of forgery and got 10 yrs in the slammer.
I’m sure there is a lesson in this story. Give them another 10 yrs and they will forget about it and be vulnerable again. But right now, they are probably still wary.
ot
Here it is
Go to the Spain clip
http://www.msnbc.msn.com/id/3036697/#30215925
David Corn to Gaffney “Frank we’re you against the Nuremberg Trials”
You go David
Matthews blew a fuse ya hoo
Chris Matthews ” my view, well my view is o.k. let me tell you my view of this Frank buddy I’ll tell you my view of this. We crossed that line in that West Point speech by President Bush George W. Bush up there in 2002 when he said we are going to go into other countries and kick ass because they do not have democracies in those countries that’s when he said we’re going to go kill
people internationally because we do not like their form of government that’s when we crossed the line Frank”
I still can’t fathom why any self-respecting news organization could still be so far under the throes of wingnut worship, that they continue to host the wackiest of wingnut wackos like Frank Gaffney and provide them a public podium for their insane rantings.
Why?
I understand TradMed’s addiction to ratings in their pursuit of entertainment, but when in heaven does common sense prevail?
It’s like the TradMed conducting an interview with the inhabitants of an insane asylum on their views of foreign policy, and trying with a straight face, to convince their viewers that, beyond any reasonable interpretation possible, that the crazy-person interviewees are “experts”.
On what planet does TradMed live where they themselves can even swallow this bilge?
I agree. It’s as if they want to rub salt in the public’s wounds Especially Rove. Steve Clemons debated Gaffney the other day
Walter Bagehot, writing ca. 1873, near the end of his explanation of “Why Lombard Street Is Often Very Dull, and Sometimes Extremely Excited”:
My emph. From Lombard Street: A Description of the Money Market. The whole chapter contains quite the catalog of historical bilge (though amazingly enough I think Mackay’s is even longer), including the ineffable stock offering “For an Undertaking which shall in due time be revealed” from the South Sea Bubble period.
ok guys, just home after long hard day.
open fdl.
say to hubby, “boy, is Marcy ever onto the bank & investment thing now.”
hubby,” they’ll be sorry.”
cheers all.
From your keyboard to G-d’s eyes and ears.
Do get a hankie before you click on MadDog’s wonderful linky.
yeah, you need the hankie to watch Mad Dog’s linky.
sort of a Seabisquit for humans. Where there’s a will, there’s a way. Amazin.
Earl of Huntington posted this chuckle over at Oxdown
a real chuckle
http://www.youtube.com/watch?v…..r_embedded
O/T — but NEWS, on dick cheney:
dick will now be deposed,
and stand civil trial, as early as
september 11, 2009 (check irony of
the date!), for arresting steven
howards in beaver creek, colorado, in
2006 — when howards told the veep that
he disagreed with the administration’s
policies in iraq. his personal remarks,
to the veep — who was doing a public
meet-and-greet, were deemed cause for
arrest.
my, how times have changed. dick will
likely settle with howards before trial, now.
namaste
More (minor) OT for us missing White House email junkies – From the National Security Archives comes word that: White House Agrees to Share Information in an Effort to Resolve Archive’s E-mail Lawsuit
Stay Motion here.
Stay Order here.
O/T, or back to torture. Obama is “wavering” on those three CIA torture memos from 2005:
http://online.wsj.com/article/…..18691.html
http://tinyurl.com/cpd9h9
Sheesh!