There are many different forms of white collar crimes that a person might be charged with. One of these, the Ponzi scheme, was brought into the spotlight when Bernie Madoff was charged. Many investors are now concerned about this type of situation happening to them because it can take their hard-earned money away from them. For this reason, people who are handling investments for others must be especially careful to behave ethically.
Being charged with being involved with a Ponzi scheme means that you are being accused of not investing someone’s money who has entrusted you with the task. Instead, it is being claimed that you are using the money to pay previous investors and keeping some of it for yourself. While it can be hard to defend against these charges, it isn’t impossible.
In some cases, the issue that leads to the downfall of a suspected Ponzi scheme is that a large number of investors cash out their investments at the same time, or it becomes difficult to find new investors to keep the money flowing. Even having one unhappy investor who questions what is going on can throw the company into the eye of scrutiny.
Because of the severity of loss in some of these cases, some investigators might falsely assume that there is a Ponzi scheme when that really isn’t what is going on. This can put ethical professionals at risk of facing unnecessary charges. It is always better to err on the side of caution and begin your defense as soon as you think you are being accused of being part of a Ponzi scheme.