Results tagged “highreturns”

Philip Barry, accused of running a $40 million Ponzi scheme out of a Bay Ridge storefront, was charged with securities fraud by the feds yesterday. Barry allegedly promised his investors—many from his neighborhood—12-21% returns based on investments with stock options but he actually used the money to pay his own bills, speculate on real estate in Sullivan County... and start a mail-order porn business. The Daily News reports, "Duped investors [said] they knew he had a side business selling DVDs and CDs on eBay - and some said they always suspected something fishy. 'He said that prisons were his best customers,' said a shopkeeper near Barry's office who lost about $30,000 in the scheme and saw Barry walk by daily with a hand truck loaded with boxes on his way to the post office. 'He said they were videos, but he never said what kind.'" Barry's scheme fell apart in 2007 when clients wanted to cash out and the investigation began last year, when Barry himself told the feds he was running a Ponzi scheme.

The tangled web of Bernard Madoff's Ponzi scheme has prompted some of his victims to ask a federal bankruptcy judge to recalculate their losses. The NY Times reports, "The customers say that, by law, they should be given credit for the full value of the securities shown on the last account statements they received before Mr. Madoff’s arrest in mid-December, even though they were bogus and none of the trades were ever made"—which means $64 billion would be at stake. However, "trustee, Irving H. Picard, is calculating investor losses as the difference between the total amount a customer paid into the scheme and the total amount withdrawn before it collapsed." The plaintiffs' lawyer says, "Under the trustee’s approach, thousands of people will not get a dime. That doesn’t seem fair to me." The next question is, should some plaintiffs have been suspicious of the ridiculously high returns (46%, 950%)? Cue up this December 2008 quote from a victim: "The point with him was that I always got every document. If you get all the documents, you are not suspicious."