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$7 billion Ponzi scheme

R. Allen Stanford of Texas was convicted of bilking investors out of more than $7 billion in a Ponzi scheme. He took investor money to buy a castle in Florida, a yacht in the Caribbean and to bankroll a $20 million prize for an international cricket tournament. When the government shut him down, he was broke, so taxpayer dollars paid for his defense.

Read Jury convicts Stanford in $7 billion Ponzi scheme, on MSNBC.msn.com.

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You know this has got to be among all the OTHER ponzi schemes and funneling money into “high living” by various Wall street and “high rollers” like Bernie Madoff—some kind of SYMPTOM of lack of regulation of the financial industry. It seems that any creep can set up a fake bank, solicit donations, excuse me, INVESTMENTS, and then spend that money any way he wants to without any over site at all.

To me the “off shore” bank would have been a CLUE to not invest there….but if I’d had money I probably WOULD have invested with Bernie.

Even though they know that a Ponzi can’t go on forever, they don’t seem to care, they just ride the horse until it drops dead. I hope the man spends his last day in prison.

I’ve still got to wonder what happened to all the money this Stanford guy swindled people out of. How on earth do you SPEND seven BILLION dollars? Even a dozen castles in Florida don’t cost that much. What did he do, invest it all in Greek government bonds? Or has he still got some of it stashed away somewhere? Or maybe he reinvested it… with Bernie Madoff!

Quite by coincidence, there happens to be a similar news report in today’s UK Daily Mail. The story refers to that particular predator, named Kautilya Pruthi, as “Britain’s Bernie Madoff”. Pruthi didn’t operate quite on Madoff’s scale, but he still bilked 800 investors out of £110 million (that’s 173 million dollars), which we’re told is “Britain’s biggest Ponzi fraud.” Even allowing for a seven to one difference in GDP, that must mean British swindlers aren’t as ambitious as American conmen, but they still do terrible damage to people’s lives.

One merit of this Mail story is that it does focus on the human damage: not just people’s life savings lost, which is devastating enough in itself, but fallout of all kinds including lost friendships, broken marriages, and (I don’t doubt) suicides. The victim Alex Dietterle featured in the article ended up bankrupt, lost his oldest friends, and his wife is divorcing him too—quite apart from the harm done to his parents who also lost money.

About the only bright spot in that story is that Alex is only 34 years old, young enough to start again and hopefully make up for most of what he’s lost. It might even be a blessing in disguise, if he’s ridding himself of a faithless money-grubbing wife who’d divorce him just because he lost his cash. (Whatever happened to “for richer, for poorer”?) He may find a nicer, more loyal lady to marry. But it’s still an awful lot of damage done to an awful lot of people.

As for Pruthi, they slung his ass in jail for fourteen years (which in Britain probably means about nine years), but what will happen after that? He’s 41 now; he’ll probably be 50 when they let him out for “good behavior,” and I’m sure Alex Dietterle is right when he predicts that on being released (and deported back to India), “Pruthi will simply reinvent himself and begin the scheme again.” Only this time he’ll be swindling even poorer people who are still less able to withstand the loss. In a way it’s a pity this SOB wasn’t operating in the U.S. instead. Here, he’d probably have ended up with more jail time, and there’s a slightly better chance that when they did let him out, some disgruntled investor with a gun and a grudge would be waiting to put a final stop to his career. I’m sure China would not hesitate to execute predators like Pruthi, Stanford, or Madoff who cause human misery on such a vast scale. In pre-Victorian Britain too they’d be dangling from a rope in front of a jeering crowd.

Another recent Daily Mail story exposed another rotten predator named Debra Adams. While the damage Adams did was nowhere near as extensive as those other three scoundrels, what she did was every bit as ruinous to her victim. In addition, this Adams woman displayed some singularly nasty traits of her own.

To start with, she exploited her position of trust to swindle her victim, an 85-year-old bedridden widow she was paid to “care” for, out of her entire life savings—somwhere between £135,000 and £185,000, that’s to say, in the region of a quarter of a million dollars. Not only that, but Adams robbed her even though the old lady had been immensely generous to her, even giving this worthless woman £8,000 to buy a car for herself!

I’m sure there’s no way this poor, deserving old lady will ever get much of her money back. It could well mean that instead of spending the rest of her life in as much comfort as possible, she’ll end up neglected in some ghastly “care” home. Clearly this Adams woman has NO heart and NO conscience. The word “gratitude” meant nothing to her, just as it doesn’t to other psychopaths.

But that’s not all. When Adams was found out and was forced to face the music—which had to happen eventually when the old lady’s bank account ran dry—she had the gall to threaten revenge on the widow whose generosity she had rewarded by plundering her! Adams threw a brick through the old lady’s window and threatened to set her house on fire! That’s got to be the ultimate in “victim blaming”! This Adams woman is a vicious piece of work!

They slung her ass in jail too, nominally for five years. But considering what she’s like, just as with Pruthi, I hate to think what she’ll be up to once she gets out. At least Madoff’s 150-year sentence will keep him permanently out of circulation.

Is there a problem again posting?

Lost another. Grrrr.

Thanks for that bit of cheer this lovely sunny Saturday morning on human kindness and gratitude Redwald, your posts are always so uplifting and show the milk of human kindness.

Yea, RIGHT!!! LOL Well at least these creeps will be out of circulation for a little while. The Brits wouldn’t want to violate their “human rights” by keeping them in jail too long , now would they?

To answer: YES! It is well known that Mr Stanford has his money stashed in multiple unknown locations. It’s why he’s so happy. B/c even if he does real time, He WINS. WINNER. “WINNING”. He got one over on everyone and when he gets out, he has free and open use of all that money. That is, unless another spath does him in while he’s in the pokie. Considering what a smart mouth he is, he either learns to button it, or karma’s heavy might teach him a lesson.

BTW, he was able to manipulate people b/c he is a MASTER at NLP.

In answer to the question regarding how so much money could be lost, the answer is leverage. Typical Hedge Funds use 3X leveraging, meaning a person gives the firm say, $100,000 and the Hedge Fund then uses this to borrow $300,000 to invest in various instruments. If the underlying instruments gain 10%, the effective yield is 30%.

The same is true for losses. A 10% losses effectively becomes 30%. However, some firms were know to use significantly more leverage, in some case 30X. Here, even a small loss percentage loss would be catastrophic.

Yea, BBE, that’s the scary part, there seems to be no oversight at all over what these “investment” companies that are supposed to be “honest” do….they seems as dishonest as Bernie Madoff.

Oh. There is More. Derivatives! ARE FUN!

Oh, well, guys, I don’t think the good Lord wants me to be rich or to invest in stocks…the only time I ever invested was some “inside information” and I made money only to lose it back in some un-inside non-information. LOL I play it safe with my bucks and I guess that’s the reason I had anything left, “neither a borrower nor a lender be..” can’t remember who said it, but he was smart…”I don’t borry and I don’t lend out”—if someone asks for a “loan” I give them what I figure I can do without and if I get it back fine, if not, fine, I’m not out more than I can afford to lose. I seldom get it back….but funny thing is, it is a cheap way to find out who your friends are. LOL Cheapest I ever “lost a friend” over was $56 and it was well worth it. LOL

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