Ponzi Nation: Clawbacks, Race Cars

People who made a profit by investing with Bernie Madoff before the Ponzi scheme collapsed could face lawsuits, the WSJ reports today — even if they didn't know anything illegal was going on.

The story's a reminder that there are often some "winners" in Ponzi schemes — people who invest, make money, and get out before the whole thing falls apart. There were about 2,000 "net winners" with Madoff, and half could be sued by the lawyer appointed to recover money for the victims of the scheme, the WSJ says.

Investors who weren't aware they were investing in a Ponzi scheme can typically be sued for their profits (not for the initial amount they invest). These sorts of clawback lawsuits are also beginning in a $200 million Ponzi scheme run by a Minnesota "investment guru," MinnPost notes today.

In other Ponzi news:

A former NASCAR driver was arrested in Florida on 26 new counts of grand theft, the AP reports. The driver — who allegedly promised associates returns of 40 percent from investing in iron ore — was first arrested in February.

Federal employees were the target of an alleged schemer who killed himself late last month, the Washington Post reports. He called his fake investment fund the "Federal Employees Benefits Group," and took $34 million from 260 investors.

"This has had a very devastating effect on myself and my wife," one retired DEA agent who lost $450,000 told the Post.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Support comes from: