A Ponzi scheme is a criminal activity where someone who’s involved in buying and selling investments collects money promising an enormous return and then pays the first people in with the money that the last people invested. The scheme ultimately collapses because there is no real investment and the returns that are being promised are exorbitant and unrealistic. In the bankruptcy world typically a trustee will recognize that the debtor was involved in a Ponzi scheme and file lawsuits trying to recover the large returns that were paid over to the early investors. The early investors are on notice that there’s a fraudulent scheme because the returns they’re getting are just too good to be true.
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What Is A Ponzi Scheme?
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Ronald J. Drescher has been practicing since 1986 in the areas of business transactions, commercial litigation, loan documentation, bankruptcy, creditors’ rights, and out-of-court workouts. His experience also includes corporate reorganizations, insolvency, business and tax planning.
