Ponzi Schemes have victimized investors for years. Bernie Madoff and Allen Stanford weren’t the first and won’t be the last individuals who commit investment fraud and investment theft of investor funds.
A Ponzi scheme is a form of investment fraud where the money of new investors is used to pay earlier investors, making the investment opportunity seem attractive and viable. Ponzi schemes are always unstable and inevitably collapse. The Securities and Exchange Commission ("SEC") may bring an emergency action to freeze the assets of the Ponzi scheme before it collapses to prevent the assets from disappearing and to ensure proper distribution of the remaining assets.
In addition to potential arbitration and litigation actions to recover these investment losses, there are a few favorable tax recovery options available:
- File Theft Loss Tax Deduction Claims with the IRS
- File Receivership Claims in court proceedings brought by regulators such as the SEC and CFTC
- File Fair Fund Claims before the SEC
Refer to our blog for postings on Ponzi schemes we are investigating. Contact James Eccleston for more information.
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