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People are particularly vulnerable to Ponzi schemes when markets are soaring
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When Bernie Madoff was sentenced in 2009 to 150 years in prison for orchestrating the largest Ponzi scheme in history, the colossal scale of the fraud — a 27-year, US$65 billion bamboozling — may have given some observers the impression that only deep-pocketed investors fall victim to such scams.
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But they’re not the only ones who need to keep their guard up. Criminals don’t tend to be overly picky about whose money they steal.
Just last year, Mark E. Cohen, a Toronto businessman with experience in the rental car industry, allegedly fleeced investors out of $12 million. Cohen’s stated strategy was to collect investor capital and purchase used cars for resale at the height of the pandemic’s vehicle shortage. He promised returns of up to 13 per cent a month. And then disappeared.
After an extended period when crypto, stock market and real estate returns have all had some semblance of crazy to them, getting everyday investors to believe they’ll receive uncharacteristically high returns — the calling card of the Ponzi scheme — becomes a much easier trick to…
