Money

10 Greatest Ponzi Scammers

10 Greatest Ponzi Scammers

All get-rich-quick schemes are essentially frauds. After all, there is no such thing as a free lunch. Still looking for shortcuts and lucky breaks is primordial human nature. Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi was a crook but he was also a genius at what he did. Here we look at the 10 greatest pupils of Ponzi who swindled, scammed and slithered their way to unimaginable riches.

1. Bernie Madoff

Bernie Madoff

 

If one Carlo Ponzi was alive today, he would definitely be a very proud man. Madoff, the greatest of the Ponzi disciples, managed to steal an astonishing total of $65 billion! His investment firm Bernard L. Madoff Investment Securities LLC, operated for almost 49 years and at its peak was one of the Wall Street stalwarts. Although the Securities and Exchange Commission had previously investigated him, it was only when the house was about to tumble that he was exposed; by his own son. He now has the rest of his life to reflect on his actions in prison.

 

The loot – $65 billion

2. Allen Stanford

Allen Stanford at this restaurant ’Sticky Wicket’

 

Billionaire, enthusiast of everything sport and women, knight of Antigua and Barbuda, Allen Stanford was the larger than life figure who financed one of the biggest single-day payouts in the history of sport. Initially, he made his fortune buying depressed property in 1980s during a real estate crisis and then selling them when the market recovered. He then moved to the Caribbean and on to the Ponzi path, starting a bank in Montserrat in 1985. Investigations against his company Stanford Financial Group were started in 2009 and he was soon arrested. He is currently awaiting trial.

 

The loot – $7 billion

3. Tom Petters

Tom Petters

 

Petters was a renowned Minnesota businessman and philanthropist who once owned Polaroid. His company claimed to use the investor’s money to finance the purchase of electronics which were supposed to be resold to big box retailers. His scheme was uncovered in 2008 and in 2010, he was sentenced to 50 years in prison. 

 

The loot – $3.7 billion

4. Albanian Schemes

Albania 1997

 

Probably the only Ponzi schemes that sparked a civil uprising, these schemes also indirectly led to 2000 deaths. After the collapse of communism, Albania’s economy became dominated by pyramid schemes which were endorsed by the government. Eventually, over two thirds of the nation’s population went on to invest in these schemes. As the schemes collapsed in a heap in 1997, the Albanians took to the streets and toppled the government. This uprising might also have fueled the later unrest in Kosovo.

 

The loot – $1.2 billion

5. Scott Rothstein

Scott Rothstein

 

Famed lawyer Scott Rothstein turned law into a money making machine (more than it already is). He promised high returns to investors from his supposedly clever manipulations of lucrative settlements like whistle blowing and sexual harassment. Eventually, the plot got too hot to handle and his cover was blown in late 2009.  Rothstein then decided to dodge his fate and fled to Morocco, leaving behind a suicide note. However, he was convinced to return and is now serving a 50 year prison term.

 

The loot – 1.2 billion

6. European King’s Club

Damara Bertges

 

Set up in 1991 by Damara Bertges and Hans Gunther Spachtholz, the European King’s club was set up to help the ‘Little People’. Investors would buy a ‘letter’ for 1400 Swiss francs and would double their money in just a year. The groups established a cult like presence and despite boasting a loyal investor base, collapsed after two years.  Bertges and Spachtholz were given respective prison terms of 7 and 5 years.

 

 

The loot – $1.1 billion

7. Caritas

Ioan Stoica

 

The Romanian scheme started in 1992 as a limited liability company with only $783 in capital. They promised investors eight times the money invested in just six months and attracted millions of investors. They finally went bankrupt after just over two years of operation, owing investors a total of $667 million. It was a huge shock for a country still licking its communist wounds. The mastermind Ioan Stoica was given only one and a half year in prison for fraud.

 

The loot – $667 million

8. Reed Slatkin

Reed Slatkin

 

The co-founder of Earthlink and scientology minister, Slatkin mostly dealt with the rich and famous of Hollywood. He used the usual fake statements to dupe investors into believing he was something big. Until the SEC shut him down in 2001, he had successfully sustained his operations and had paid out about $279 million but like everything Ponzi, disaster was inevitable. The was sentenced to fourteen years in prison in 2003.

 

The loot – $593 million

9. Gerald Payne

Gerald Payne

 

Payne’s Greater Ministries International used biblical bilking to shake up investors. His unique ministry preached that God wanted people to be rich, which attracted a lot of greedy and god-fearing clients.  His con was finally busted in 1999 and at his trial, he was described as a "wolf in sheep's clothing" by the judge. The five main church leaders received sentences ranging from 13 years for Payne’s wife Betty and 27 years for Payne himself.

 

The loot – $500 million

10. Lou Pearlman

Lou Pearlman

 

The boy band mogul swindled listeners out of their time and investors out of their money. A look at his record leaves one with the impression that he was as well rounded a conman as there ever was. His intricate scheme managed to operate undetected for over two decades before finally being discovered in 2006.  Perlman decided to make a dash for it but was discovered in Indonesia and was finally sentenced in 2008. He is currently serving the third of his twenty five years at FCI Texarcana.

 

The loot – $300 million

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