A Ponzi scheme is any fraudulent organization that pays some investors with the payment of other investors.  This gives some investors the illusion that their investment is profitable.

Ponzi schemes are marked by high returns for the early investors and perpetrator, but will rely on an ever-increasing base of new investors to maintain those profits.  In that respect, a Ponzi scheme similar to a pyramid scheme, which is specifically disallowed and investigated by the Federal Trade Commission and Securities and Exchange Commission.  It is different from a pyramid scheme, however, as Ponzi schemes may last a long time if the victims continuously reinvest their money.

There are a number of legal penalties for individual involved and actively running a Ponzi scheme. For those that acted in bad faith and recruited more investors to the scheme, they may face criminal penalties as severe as those faced by the originator of the scheme.

Early investors that reaped high returns from the Ponzi scheme, even if they did so unknowingly, will be ordered by the court to pay restitution to those that incurred losses as a result of the Ponzi scheme.  In addition to these penalties, those that operate a Ponzi scheme will be charged with operating an unregistered security, which will carry additional penalties.

Those that might be found acting in bad faith in regards to their involvement with a Ponzi scheme in Long Island should contact a Long Island criminal defense lawyer without delay.

The attorney will be able to help you determine your criminal liability in the matter as well as defend you in court, if necessary.

To set up an immediate consultation, contact our Long Island criminal lawyers at (516) 204-7611 so that you may learn about your potential legal options.