A crime need not be violent to have life-altering effects. Although crimes like burglary and rape can
cause irreparable bodily and psychological damage, the effects of financial fraud can ruin the lives
of hundreds or thousands of people. One such type of fraud that has gained much attention in recent
years is the so-called Ponzi scheme, a form of investment fraud.
This “scheme” takes its name from an early perpetrator of large-scale investment fraud named Charles
Ponzi. In the 1920s, he defrauded hundreds of investors by paying them false “returns” with the money
invested by them and others. More recently, Bernard Madoff was convicted of a multi-billion-dollar Ponzi
scheme which defrauded many famous businesspeople and celebrities.
Although this scheme has varied in form, the same basic idea applies in all cases: the fraudster promises
(almost) unreasonably high return on investment for his operation. After receiving initial investments,
he pays the money received back to the investors as “profits.” This then motivates the investors to
sink more money into the scheme. Since this type of fraud is well-known, attempts like Madoff’s can
get extraordinarily complex in their efforts to cover the fraudster’s tracks.
Charges of investment fraud can lead to many years in jail and should be taken very seriously. If you
have been accused of investment fraud, the experienced San Jose criminal defense lawyers of the Law Office of Daniel Jensen, P.C., can help you. To discuss your case, contact us today at (408) 296-4100.