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Ponzi scheme charges highlight white collar crime

Accusations of white-collar crime can hit hard when businesspeople or investors in Seattle and across the country are accused of fraud. The Securities and Exchange Commission (SED) has charged one Mississippi company with defrauding 150 investors of $85 million in an alleged Ponzi scheme. Ponzi schemes are named after Charles Ponzi, who ran a famous scheme in the 1920s that collected over $8 million from 30,000 people across the country.

This type of white collar crime drew widespread attention once more in the late 2000's, when Bernard Madoff was arrested for a Ponzi scheme that collected and lost $65 billion from wealthy investors across the country. In June 2009, Madoff was sentenced to 150 years in prison on securities fraud charges. While Madoff continued to collect billions from investors over the years, advisers had warned that there was dangerously thin evidence to support his claimed results on the market, including a lack of independent accounting and auditing.

A Ponzi scheme refers to the use of funds collected from new investors to pay earlier investors, rather than deriving funds from the investment itself. What seems like a return on the originally invested funds was only obtained from later investors, with the actual securities or beneficial investment worthless or nonexistent. This type of investment scheme has been common internationally over decades, and it has received new life with the development of cryptocurrencies and other digital investment opportunities.

Of course, even well-intentioned investors and businesspeople can become embroiled in a Ponzi scheme. They may even recruit others to be part of the project and as a result, can face arrests or charges for white collar crime. People who are charged with white collar crimes can face lengthy prison terms and costly fines, and a criminal defense lawyer may be able to present a strong defense in court and before trial.

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