Is A Ponzi Scheme A Crime?

The Securities and Exchange Commission (SEC) defines a Ponzi scheme as a form of “investment fraud that pays existing investors with funds collected from new investors.” Investors can file a civil claim against the responsible party to seek financial relief for their damages. Beyond that, the person(s) responsible for a Ponzi scheme can face serious criminal charges. Within this article, our Orlando white collar criminal defense attorney provides an overview of Ponzi scheme charges in Florida.

A Ponzi Scheme is Not a Standalone Criminal Charge in Florida 

To start, it is important to emphasize that a Ponzi scheme can lead to more than just a civil claim. It can result in a person facing very serious felony criminal charges in Florida. With that being said, Florida does not have a specific criminal Ponzi scheme statute. Instead, a person accused of operating a Ponzi scheme will likely face charges under multiple white collar fraud statutes. 

Most Common Criminal Charges Filed in Ponzi Scheme Cases 

What can you be charged with in a criminal Ponzi scheme case in Florida? The answer depends on several factors, including the specific nature of the allegations. Three of the most common charges are as follows:

• Securities Fraud: Securities fraud involves deceiving investors in the stock or commodities markets. In Ponzi schemes, this can mean lying about how the money is invested or the risks involved. Many Ponzi schemes involve securities, often unregistered securities.
• Wire Fraud: Wire fraud is a crime that involves any scheme to defraud that uses electronic communications. In a Ponzi scheme case, wire fraud charges can be brought if the organizer uses electronic methods—the phone, text messages, the internet, etc.—to deceive investors and/or to transfer funds fraudulently.
• Mail Fraud: Similar to wire fraud, mail fraud involves using the postal system in the execution of a fraudulent scheme. If the organizers of a Ponzi scheme use the mail to send false statements or to solicit investors, they can be charged with mail fraud.

Ponzi Scheme Cases Often Lead to Federal Criminal Charges 

Many Ponzi scheme cases leave state borders. While a person could face white collar criminal fraud charges in a Florida court, these matters are often handled at the federal level. Of course, federal law enforcement agencies like the FBI or and federal regulators like the SEC have extensive experience and resources to investigate these complex financial crimes. Any person facing a federal white collar criminal charge should be represented by a top-tier defense attorney. 

Get Help From a White Collar Criminal Defense Attorney in Central Florida

At The Baez Law Firm, our Orlando white collar criminal defense lawyer has the professional skills and legal experience to defend the full range of charges, including Ponzi scheme cases. If you or your loved one is facing a criminal charge in relation to an alleged investment fraud case, please do not hesitate to contact us for a fully confidential, no commitment initial appointment. From our Orlando office, we defend white collar criminal charges in Orange County and throughout Central Florida.

Source:

investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme