Meet Mr. Ponzi

There was an article on the AP wire today that I thought was very interesting, and eerily similar to a cause near and dear to this blog. As many know, Bernard Madoff has been arrested and accused of running the world's largest Ponzi scheme. The experts that were interviewed for this AP article were quick to point out some commonalities of the con men who run the schemes.

• They seem trustworthy because of their charm, their command of finance and the unshakable confidence that they portray
• A Ponzi scheme, or pyramid scheme, is a scam in which people are persuaded to invest in a fraudulent operation that promises unusually high returns.
• People who run Ponzis generally fall into two categories: hucksters like Ponzi who plan to cheat investors and get out quickly, often fleeing the country, and people who start a legitimate investment venture but lose money, then try desperately to cover it up and dig themselves into a deeper and deeper hole.
• "Looking successful is the key because everyone's first question is going to be, `If this is such a great deal, then why are you wearing a cheap suit?'" said Eric Sussman, a former federal prosecutor from Chicago who helped on about a dozen Ponzi cases. "They have to have all the accoutrements of success."
• The Madoff debacle appears to be typical of Ponzi schemes in another way: They are typically orchestrated by people who look to their own churches.
• "Any Ponzi scheme is built on trust. People can't ask too many questions."

Wow, does this sound liek a familiar story? Perhaps the most telling was the opening line.....

They're smart and charming. They have an aura of success about them and exude respectability. Above all, they instill confidence.

Which is, after all, why they are called con men.