Ponzi victims done in by their own greed

The success of a Ponzi scheme is directly related to two key factors — greed and gullibility.

The success of a Ponzi scheme is directly related to two key factors — greed and gullibility.

Oxford defines a Ponzi scheme: “A form of fraud in which the belief in the success of a non-existent enterprise is fostered by payment of quick returns to the first investors from money invested by others.”

Humans are vulnerable to Ponzi schemes because greed is in our nature.

We’re born greedy. It’s related to survival. It can be well-intentioned greed but it can play against our survival as well, especially financial survival. Bad people know how to take advantage of other peoples’ greed.

As for gullibility — well that’s something different. It’s self-inflicted — especially considering all the warnings out there, issued time and time again.

We can choose to exercise a little common sense, be less trusting, be proactive by closely checking out financial bonanza promises by — for example — consulting with someone objective.

We can choose to educate ourselves, take heed of multitudinous warnings. Or we can choose to ignore them.

What’s it going to take to keep people from being so willingly ripped off by the latest scam? A sharp rap across the knuckles each and every day? Perhaps an imprint on every bathroom mirror in the land: If it’s too good to be true, then it is too good to be true!

People who have never been scammed may think this message doesn’t apply to them. It costs a lot of public money, police and court resources, and time, to go after fraudsters. We all pay.

Every week, the Advocate newsroom receives notices from police, or some other body, asking that a warning about the latest scam be published. We could fill entire sections of the newspaper with these warnings. There are also heartbreaking calls from people who have been deceived.

The victims are left asking: “How could I have ever been so foolish?”

Know this: there’s a scam a minute out there. If someone offers you a great deal, you better be damn wary of it. You better do your homework. And you better ask yourself: Am I willing to risk everything?

People perk up when someone — even a friend or relative — says, “Give me a minimum of $50,000 to invest and I promise a 40 per cent return, just don’t say anything to anyone, you won’t have to pay a nickle in income tax on those earnings either!”

Gullible people line up with their chequebooks and hand over their life savings, their retirement funds, their financially-secure futures, their children’s education funds. It’s called white collar crime but it’s actually filthy dirty crime.

In what is alleged to be perhaps the largest Ponzi ripoff scheme in Canadian history, about 3,000 investors, some from Central Alberta, may never see a penny of $400 million invested. It may have disappeared into the hands of two alleged fraudsters who now face charges.

It’s a disaster for so many people, so many gullible people who were offered the hook of delicious financial pleasure and bit like sucker fish on corn bait.

Those who lay in wait, who dream up the schemes and then lay the traps, know one thing for certain about their prey — they are gullible.

Mary-Ann Barr is Advocate assistant city editor. Her columns appears Tuesdays in the Red Deer Advocate and online at reddeeradvcoate.com. She can be reached by email at barr@bprda.wpengine.com or by phone at 403-314-4332.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

AstraZeneca vaccine is ready to be used at a homeless shelter in Romford, east London, Wednesday, Feb. 3, 2021. THE CANADIAN PRESS/AP-Frank Augstein
Select Alberta physicians to begin offering COVID-19 vaccine next week

Some Alberta physicians will now be offering the COVID-19 vaccine. In an… Continue reading

An example of zero lot line properties. Red Deer County council approved rezoning to allow zero lot line properties on three streets in Springbrook.
Photo from Red Deer County
Narrower house lots being tested in Springbrook to improve affordability

Zero lot line homes will be built on three streets in Springbrook

Public Safety and Emergency Preparedness Minister Bill Blair listens to a speaker during a news conference Tuesday June 9, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Red Deer part of project to support victims of human trafficking

Federal government sends $500k over next four to Alberta-based project

Mayzie the Canada goose is back nesting in a flower pot on a backyard balcony in Anders on the Lake. (Contributed)
Canada goose is back nesting on Red Deer balcony

Third year in a row geese return

FILE - Conor McGregor poses during a ceremonial weigh-in for the UFC 246 mixed martial arts bout in Las Vegas, in this Friday, Jan. 17, 2020, file photo. The UFC intends to welcome a capacity crowd at Las Vegas' T-Mobile Arena on July 10, 2021, when Dustin Poirier and Conor McGregor fight for the third time. UFC President Dana White announced his plan Wednesday, April 14, 2021, for the promotion's first sellout show in its hometown since the start of the coronavirus pandemic.(AP Photo/John Locher, File)
UFC plans full Vegas crowd in July at Poirier-McGregor fight

The UFC intends to welcome a capacity crowd at Las Vegas’ T-Mobile… Continue reading

Juno Awards signage hangs in downtown Saskatoon on Thursday, March 12, 2020. Organizers of the Juno Awards say they've postponed this year's 50th-anniversary celebration until June 6 "out of an abundance of caution in response to the evolving COVID-19 pandemic." THE CANADIAN PRESS/Matt Smith
Juno Awards postpone 50th anniversary show date to June 6 amid COVID-19 pandemic

TORONTO — Organizers of the Juno Awards say they’re postponing this year’s… Continue reading

Infrastructure and Communities Minister Catherine McKenna rises in the House of Commons following Question Period Monday March 22, 2021 in Ottawa. McKenna is announcing a $1.5-billion program designed to spur green building through retrofits, upgrades and new construction. THE CANADIAN PRESS/Adrian Wyld
Federal government unveils $1.5-billion plan to boost green building

OTTAWA — Infrastructure Minister Catherine McKenna has announced a $1.5-billion program designed… Continue reading

In this Monday, March 15, 2021 file photo a vial of AstraZeneca vaccine is pictured in a pharmacy in Boulogne Billancourt, outside Paris.  THE CANADIAN PRESS/AP/Christophe Ena, File
AstraZeneca very safe, effective, with extremely rare risk of clots: Health Canada

OTTAWA — There is enough evidence to say the Oxford-AstraZeneca vaccine may… Continue reading

Demonstrators take cover from crowd-dispersal munitions from police outside the Brooklyn Center Police Department while protesting the shooting death of Daunte Wright, late Tuesday, April 13, 2021, in Brooklyn Center, Minn. (AP Photo/John Minchillo)
Minnesota cop will be charged in shooting of Black motorist

BROOKLYN CENTER, Minn. — A prosecutor said Wednesday that he will charge… Continue reading

Families, Children and Social Development Minister Ahmed Hussen listens to a question during a news conference Tuesday April 21, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Housing advocates eye federal budget for aid to urban Indigenous providers

OTTAWA — The Trudeau Liberals have told stakeholders in the affordable-housing sector… Continue reading

Two women lay flowers outside Windsor Castle in Windsor, England, Tuesday, April 13, 2021. Britain's Prince Philip, husband of Queen Elizabeth II, died Friday April 9 aged 99. His funeral service will take place on Saturday at Windsor Castle. (AP Photo/Alastair Grant)
Queen returns to royal duties after death of Prince Philip

LONDON — Queen Elizabeth II has returned to royal duties, four days… Continue reading

The mobile phone icon for the Coinbase app is shown in this photo, in New York, Tuesday, April 13, 2021. Coinbase is going public at a time when chatter about cryptocurrencies is everywhere, even at the United States Federal Reserve. (AP Photo/Richard Drew)
Coinbase soars in market debut, valued near $100 billion

Coinbase made a rousing debut on Wall Street Wednesday, with the digital… Continue reading

Most Read