30 yr Ponzi scheme
This week a criminal complaint related to a Ponzi scheme that has been running for 30 years was unsealed. As alleged in the complaint, suspect Philip Barry began accepting money in the late 1970s from individuals seeking a return on investment. Operating multiple entities that over time collectively became known as “the Leverage Group,” Barry told potential investors that the Leverage Group invested in stock options. To induce investments and discourage withdrawals, Barry, among other things, (1) guaranteed specified positive rates of return, (2) issued account statements that showed growing account balances, (3) represented that investing in the Leverage Group was safe, and (4) promised that withdrawals could be made easily. In 2006, Barry distributed a letter stating that the Leverage Group had “produced annual returns ranging from the recent 12.55% to a high of 21% back in 1979.”
But as it seems now, Barry was in fact using the deposits from new investors to transfer called ‘investment returns’ to other investors. The complaint details how Barry routinely broke his promise to investors that they could easily withdraw money from their accounts by first discouraging such withdrawal requests, and if that failed, delaying payment by offering a variety of excuses. Even in those instances when Barry actually issued withdrawal checks, they would often be returned due to insufficient funds. In some cases, Barry simply ignored investors’ withdrawal requests altogether….
Approximately 800 individuals invested a total of more than $40 million in the Leverage Group. Although many investors succeeded over the years in making full or partial withdrawals (particularly before the Ponzi scheme began to unravel), numerous other investors sustained substantial losses.
http://newyork.fbi.gov/dojpressrel/pressrel09/nyfo090809.htm
