Ponzi Scheme – Invest Wisely!!!
It is true as they say, history does repeat itself. It is also true that people rarely learn from their mistakes and there is no such thing as honest easy money.
Earlier today John A. Mattera was arrested in his Fort Lauderdale home and charged with operating an investment scam which allegedly duped people into thinking that they would be purchasing pre-IPO shares in companies such as Facebook and Groupon.
The complaint against Mattera, filed today in U.S. District Court in Manhattan, is an assertion of The Securities and Exchange Commission that Mattera allegedly sold shares of privately-held companies that were expected to go public. Mattera claimed that he owned more than a million shares in each company. These alleged shares were valued at tens of millions of dollars, but according to the SEC’s complaint Mattera never had ownership of these shares and essentially did not have anything to sell.
In accordance with the complaint, consumers were fooled to believe that their investments would be held by the escrow service of John R. Arnold. In reality, over the course of the last fifteen months Mattera transferred funds of over $12.6 million to his own personal accounts, after giving Arnold a cut, he spent the remainder on lavish expenses including cars, private jets, tailored clothing, a boat as well as expensive jewelry among other things.
For the time being all accounts, both personal and professional, belonging to either Mattera or Arnold have been frozen. The Director of the SEC’s New York Regional Office released a statement today saying that “By conjuring up a seemingly prestigious hedge fund and touting the safety of an escrow agent, these men exploited investors’ desire to get an inside track on a wave of hyped future IPOs. Even as investors believed their funds were sitting safely in escrow accounts, Mattera plundered those accounts to bankroll a lifestyle of private jets, luxury cars, and fine art.”
It is extremely unfortunate for those who have invested with Mattera. It is also heartbreaking that such situations continue to occur amongst the American people. In the age of technology, through this ongoing recession the American public should be aiding one another to get through these hard financial times as opposed to stealing from an already battered society. Next month commemorates the three year anniversary of the day that Bernie Madoff was exposed in successfully pulling off what is known as the greatest Ponzi scheme yet. It is debated as to whether Madoff’s fraudulent activities began in the 1970s, although Madoff claims that they only began in the 1990s. Regardless, the situation had been escalating for at least twenty years, where as Mattera had only begun about fifteen months ago.
A Ponzi scheme is where an investor fabricates gains to attract new investors. One uses the new investments to give return to the original investors and so continues the cycle until they are either caught by the authorities or are unable to bring in new investors. Unfortunately this behavior is not unique nor is it original, fraudulent activity such as these occur more often than they should and trusting people are often taken advantage of. The term is originally named after Charles Ponzi who became notorious for this kind of behavior in the 1920s.
As America trudges through this age of recession and unemployment, humanity calls for respect and kindness to our neighbors in getting America through these tough times. If only it were a natural occurrence that mankind pursue this form of selflessness, but until that day one should always thoroughly investigate an investment before offering up their money. If it seems too good to be true, it probably is.
For questions or to obtain legal advice, please contact the Law Offices of Aronberg and Aronberg at 561-266-9191 or email us at firstname.lastname@example.org.