The president of an investment firm is behind bars after lying to investors, and stealing nearly eight million dollars. We have some important information for all of you, on how to avoid getting caught up in a ponzi scheme.
"He took the clients that he built up over 25 years and started selling fictitious loans and over selling loans," said Amy Kerkoff, US Postal Inspector.
Postal inspectors say dozens of investors were duped by an investment firm that tricked them into believing they were funding development projects.
The problem? The deals didn't exist.
Instead, the president of the firm used the money to pay off other investors whose money he had already stolen. A typical ponzi scheme.
"He had a fleet of cars for his business," said Kerkoff. "He spent a month in Hawaii with 20 family and friends and footed the bill for that and he sponsored hydroplane races."
Postal inspectors say some victims were left with nothing.
"Ultimately, they have lost everything --they've lost their life savings and retirement," said Kerkoff. "Many of them are older and will have a hard time recovering those funds."
Inspectors say there were red flags, like important paperwork was never received.
"They get too comfortable and didn't follow up," said Kerkoff. "Do your homework and make sure you get everything linked to your investment."