The story below was published in the Deseret News last week. This one should have been obvious to any investor — if you are promised 5 to 10% interest per month it is too good to be true! No legitimate business enterprise that I know of can generate those kinds of returns. The only way to do it is to take new investor money as it comes in and use it to pay back the earlier investors — the classic Ponzi scheme.
On June 23, 2010, the Securities and Exchange Commission filed fraud and other charges in connection with three Ponzi schemes that targeted members of the Mormon community. The SEC’s complaint alleges that the defendants raised at least $3.6 million by convincing at least 36 investors to invest in two companies, Zufelt, Inc. and Silver Leaf Investments, Inc.
On June 25, 2010 my friend Jennifer Napier-Pearce spoke with several experts on our local public radio station about why Utah investors keep falling for schemes that are too good to be true. Listen to the complete broadcast here.
