Christopher Marquet (former Kroll staffer and co-founder of Citigate) of Marquet International has released a report on Ponzi schemes which provides some great statistics and analysis of Ponzi Schemes and their traits.  The report analyzed 329 distinct Ponzi schemes in the United States which have come to light since 2002.

You can read the entire report here, but here are some of the highlights:

Of the 329 distinct Ponzi identified for this report, more than 12 percent of the schemes were carried out by perpetrators who have a prior history of fraud.

Lesson:  As we have previously outlined on this site, one of the fundamental lessons of avoiding a fraudulent investment scheme is to conduct thorough criminal checks on the individual with whom you are investing.

The average Ponzi scheme spanned more than 5 years, with 11 of the 329 schemes lasting more than 20 years.

Lesson: Logic tells us that businesses who have been around for several years must have a successful track record, but this logic may be totally inaccurate.

The average annual rate of return was 282 percent and many perpetrators claimed “guaranteed” or “risk free” returns.

Lesson:  Consider that the average annual rate of return for the Ponzi schemes was 282 percent, while one of the most successful hedge funds in the world, SAC Capital Advisors, boasted annualized returns of 27 percent from 1996 through 2009. If it’s too good to be true, it probably is.

Perpetrators of Ponzi schemes perpetuated an “overly opulent” and sometimes extravagant lifestyle which included waterfront homes, luxury cars, yachts and large philanthropic contributions.

Lesson:  A major warning flag for investors is a “showcase” of wealth.  Investment fraudsters driven by greed and power, often camouflage the legitimacy of their investments by purchasing luxury homes, automobiles, yachts and one-of-a-kind items.

90 Percent of Ponzi schemes are perpetrated by men.

Lesson:  As we all know, men are from Mars, women are from Venus.

Additional resources on steps to avoid a Ponzi scheme:


Enjoyed What You Read?

Sign up for our newsletter and stay up to date with what Hal Humphreys, from Pursuit Magazine, believes to be one of the absolute best blogs in the investigative industry!