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Ponzi Schemes: Illegal & Fraudulent Investment Operations

Earlier this month we covered the story of 43-year-old Fidel Bermudez, a man who allegedly ran a Ponzi scheme in Ventura County several years ago, mostly involving members of the congregation of the Church of God in Simi Valley. Within three years, the man raised an estimated $1.75 million before leaving the state when some of his investors began to ask questions about the validity of his actions. The man now faces up to 17 years in jail due to fraud charges.

What is a Ponzi Scheme, and why are they illegal? Put simply, a Ponzi scheme is a fraudulent investment scheme that tricks investors into giving money to a person in exchange for abnormally high and consistent returns – but little does the investor know that their returns are simply coming from the initial investments of new people. Because this scheme relies on an exponentially increasing number of investors, this type of fraud is usually destined to collapse and only ever benefits the oldest investors (and the person who created the scheme). Named after white collar criminal Charles Ponzi, these types of scams have been utilized for hundreds of years.

These pyramid scams are illegal in the United States and are considered a form of fraud. It is also considered a white collar crime and can have a number of serious consequences depending on the scope and details of the scheme, such as heavy fines, prison time, community service, and probation. In many cases, those who run Ponzi schemes are charged with a felony.

If you have been charged with fraud because of your involvement with a Ponzi scheme or pyramid scheme in Ventura County, you should speak with a criminal defense attorney. We have extensive experience assisting those facing white collar criminal charges and can help you best navigate your case. Call today.

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