Seniors often have financial concerns as they contemplate their future and their perhaps dwindling assets.  If they rely on Social Security and state pensions, even those are questioned by some who liken them to a Ponzi scheme. The older members who are drawing out now are being paid out of a fund that is being refilled by contributions from younger members who hope they will find there is something they can draw on in the distant future.

It is all very concerning and is made much more worrying by the deep recession that only slowly may be receding.  Many seniors will be worriedly scratching their heads on whether they will have enough to live on, particularly if they are in good health and may have a long life.

Couple that with the many cases of Financial Abuse of Elders that was covered in an earlier post, and you end up with concerned seniors who are not sure who to consult.  Some financial abuse cases are perpetrated by the seniors’ sons and daughters or by other family members.  Who then to turn to?  If a trusted friend suggests a mature person whom they have confidence in, then this may appear less thorny than having to involve the family in your financial matters.

If that mature person gains your trust and confidence, then it may be only a matter of time before they are suggesting ways of investing where you can get better returns than the low interest rates the banks presently offer on savings.  Once on the hook, you may soon find that your goose has been cooked (to mangle metaphors).

It is probable that there are many more Ponzi schemes than actually hit the headlines.  Bernard Madoff was of course the biggest in history, but others have caused equal misery to many seniors.  Last month, we all learned of Earl Jones, the Montreal Ponzi Schemer, who preyed on family members and friends and lived the high life as their savings disappeared.

Last week, here in Vancouver we read that B.C. Ponzi schemers were found guilty of fraud:

Four British Columbia residents, Hal (Mick) Allan McLeod, Kenneth Robert McMordie (aka Byrun Fox), Dianne Sharon Rosiek and David John Vaughan, were ruled guilty of fraud for violating securities laws by a B.C. Securities Commission panel. They lied to investors about how their money was being invested, what they could expect as a return, and the risk level of these investments.  Their Ponzi scheme cost some 800 investors more than $10 million US.

Today the news is that a $50 million Ponzi Scheme Is Alleged in Detroit.

A class action suit in Federal Court claims  that John Bravata and Richard Trabulsy masterminded BBC Equities and Bravata Financial Group, which stole $50 million from hundreds of people in a Ponzi scheme, . They are said to have promised 8 to 12 percent returns in a real estate scam, guaranteeing “safer returns than other investment options,” according to the complaint.  They began by soliciting family and friends for money, then began holding “free lunch” seminars each week to target senior citizens. Half of BBC’s money allegedly came from IRA accounts.

In all these cases, the seniors are likely to see only a fraction of their original holdings.  This is financial abuse of the very worst kind.  The only safeguard is to seek financial counsel and advice from only reputable and knowledgeable individuals who will not benefit in any way from the impartial advice they may give you.

Related articles by Zemanta

• Victims of B.C. Ponzi scheme urge caution (ctv.ca)

Technorati Tags: Confidence trick, fraud, Ponzi scheme