International Law

Folsom Fraud - How it Worked

Very interesting article about a religious based ponzi scheme.

"Investigators have presented to the U.S. Attorney's Office evidence for their belief that Wilson's Christians In Crisis Investment Fund was a Ponzi scheme, a personal money pool from which Wilson paid bogus returns to early investors with cash from later investors -- not from any earned investment proceeds.

Agents believe Wilson then played the stock market, badly, with the bulk of the loot.

Suspected shenanigans among ministries and private accounts allowed Wilson to buy a $1 million Folsom house and a $168,000 sports car, federal warrant documents state.

An indictment of Wilson on the evidence must be handed down by March 11, or Wilson would be freed."

There are a number of factors in play here, but I was interested to note that the story reported that

"Christians in Crisis Investment Fund, Wilson's company in Folsom, mimics the name of a Sacramento-based ministry, Christians in Crisis International.

Bystrowski's company name mimics that of another entity of comparatively high profile, Menlo Park-based Opus Capital Group."

The mimicry or outright theft of authority is not just a red flag: it is THE red flag. If you sign one of these signs, don't just run away - never ever be in that position.

Unfortunately, trusting and verifying is hard to do against this particular technique. You are prone to simple ignore the differences.

Only an experienced investigator could tell you whether this was a fraud technique or simply careless expression.

Full post as published by Misleading Advertising Law on March 20, 2008 (boomark / email).