Tracking Ponzi Schemes With Jordan Maglich

Quote, "One particularly insidious type of deceptive enterprise is the Ponzi scheme. The operator of a Ponzi outwardly promises investors a healthy and even fantastic return on their investment. But rather than invest these assets in legitimate profit making activities, the manager uses the proceeds from new investors to pay what he promised to earlier ones. A Ponzi scheme is fundamentally built on a lie and can be sustained only as long as enough new money is found to pay off prior obligations.

The scheme seems so obviously fraudulent that it's hard to imagine the person behind such a scheme persuading himself otherwise," end quote. Even though there is evidence that similar investment schemes existed prior to the 20th century, Charles Ponzi was the first operator to bring the scheme into the forefront of white collar crime in the 1920s.

No matter how much Ponzi schemes are discussed in the news, no matter the number of enforcement actions, no matter the amount of lost funds and recoveries over the decades, the Ponzi scheme has persisted. We look to discuss the unique characteristics of Ponzi schemes that make them so evergreen, and the legal and regulatory implications of Ponzi schemes in enforcement and in court.

We're excited to be joined by Jordan Maglich, practicing attorney and founder of the legal blog Ponzitracker.com, to get into the weeds on Ponzi schemes and their impact on the white collar world, today on inSecurities.

As you noted up front, the Ponzi scheme has persisted, and I'm constantly amazed. If you go on Google today and search for Ponzi scheme and limit to justice.gov or SEC.gov, you will be amazed how many recent Ponzi schemes are out there. So it is something that we're still seeing. It's happening all the time, frustratingly so. And maybe this is a good platform to talk about what some of the hallmarks of those schemes are, and what folks should know, so they can keep an eye out going forward.

We are fortunate to have on the show today, as you mentioned up top, Chris, Jordan Maglich. Jordan is an assistant general counsel for litigation at Raymond James Financial.

Prior to taking this position in the spring of 2022-- so just a couple of months ago-- Jordan was an attorney in private practice at several law firms, including most recently Quarles & Brady and Buchanan Ingersoll & Rooney, where his practice focused on commercial litigation, securities and financial services, and regulatory matters.

Jordan has a unique experience of representing court-appointed receivers in regulatory enforcement actions involving investment fraud brought by federal and state regulators, including the SEC, the FTC, the Florida Office of Financial Regulation, and the Florida Office of the Attorney General. Through these efforts, Jordan and his colleagues collectively recovered tens of millions of for the benefit of defrauded investors.

Jordan is also the founder of PonziTracker.com, a blog and database focused on-- you guessed it-- tracking Ponzi scheme enforcement actions, case developments, and outcomes for alleged fraudsters and investors alike. Jordan is frequently quoted on issues relating to white collar crime and Ponzi schemes, including in The Wall Street Journal, The New York Times, MarketWatch and The Street. Jordan is the president of the Federal Bar Association's Tampa Bay chapter.

He is also a co-presenter with our own Chris Ekimoff at next week's Association of Certified Fraud Examiners, that's ACFE-- also Chris's favorite acronym-- the ACFE 2022 global fraud conference on Ponzi scheme outcomes and legal theories. All that is to say Jordan is the perfect guest for our Ponzi scheme episode. Jordan, we are excited to have you on the program. Thanks so much for joining us.

Generally, a Ponzi scheme involves an investment fraud that pays existing investors purported returns on investment using funds that they collected from new investors. Right? So I think that's the highest level possible definition. But, Jordan, what I'd like you to do is just unpack that a little bit. Tell us how do you think about a Ponzi scheme and what might be some of the hallmarks.

That's not a Ponzi scheme, by definition. When someone says, hey, Chris give me your money, $100, and I'm going to guarantee you that I'm going to give you an 8% annual return from buying and selling emus, for example-- but instead of me going and buying and selling emus, I'm actually using Chris's money to pay Kurt, an existing investor, what he thinks are his 8% annual returns from buying and selling emus. As we're going to get into, these things take all different kinds of shapes and sizes.

They run from investing in the stock market to investing in real estate to investing in Iraqi dinar contracts. It really spans the globe. But, at the end of the day, it's someone telling you that I'm going to use your money to make this investment and I'm going to pay you these returns. But instead of making that investment, all I'm doing is using other people's money to pay you those returns to make it look like the investment is working.

And unless they're telling you it's treasuries that they're investing in and you're getting 0.5% a year guaranteed, then that's something that's a huge red flag. Another one is someone saying that they're the only one who's smart enough, who knows how to make this investment, so a level of secrecy. That was Madoff, for example. If someone were to come to Madoff and say show me how this strategy works, he wouldn't tell them.

And he would say, no, either you're investing with me or I don't need to explain this to you. And you see that a lot with people who might be deriving significant gains from investments that you might not typically associate such big gains with. And, finally-- and I guess this kind of dovetails with the last category, but someone who is not receptive to answering your questions or explaining how they're doing what they're doing.

There's this, I think, human nature to maybe be attracted to a situation where you might be told if you ask any more questions I'm showing you the door. So I would say those are three pretty big red flags that I've seen in my experience.

Or with Allen Stanford, he was a financier and one of the richest people in the world. You can kind of go down the list. Even if you think about Lou Perlman, he ran a massive Ponzi scheme it turns out, but he was also the manager and the guy who found NSYNC and Backstreet Boys. So there just seems like something about these people that would make you think, OK, that seems legit, which I think is actually the case with Charles Ponzi, who was the person that the Ponzi schemes are named after.

Chris, I know you were recently deposed as an expert witness. And I'm going to refer to you as an expert for this episode only--

At the time there were these items called postal reply coupons, in which an individual in the states would send a letter and a postal reply coupon to friends and family overseas. That individual would then go get the coupon redeemed at their local postal service in the foreign country, and then would be able to send a letter back for free-- kind of a good way to transmit the value of needing to respond to the letter.

Ponzi had come up with a theory that tracking the exchange rates between the US dollar and, say, the Italian lira at the time, and the value of the post of reply coupons, he could buy and sell these coupons as well as work the exchange rates to bring about a good return-- almost 100% return to his investors. Obviously, that got a lot of attention. In theory, this idea could work on a single transaction, if you timed it right in the exchange rates and the value of the coupon broke in your favor.

But it's one of those things that, Jordan, you talked about a little bit too, is that it's inherently risky, in that if you're dealing with exchange rates they're going to fluctuate. And you're dealing with the value of this coupon over time is going to change. So it's not a guaranteed return. You've got the potential for that return. And then, secondarily, Ponzi scheme was limited in its scale.

There are a finite number of letters being sent back and forth across the pond, if you will, that might limit this topside investment strategy, this arbitrage strategy over time. But that didn't stop Charles Ponzi from going out and marketing this strategy. He promised his new investors that they could double their money just like his old investors would, and in that classic Ponzi circumstance, use that new money to pay off his old investors.

However, there are great stories of the scenes outside of his office after a few months of hundreds of folks waiting for their money to come back that he was unable to satisfy over the time period.

So after-- I believe it was just the summer of 2020, in which this began, became popular, and then folded because of the changing values of the currencies as well as the use of the coupons-- there were some number where he took in $1,800 in the first week, and the number of coupons he would have had to buy under his strategy was something like 54,000 postal reply coupons, which was way more than the handful of investors that had given him, the $1,800, would ever utilize.

So the scope there was a problem. And we could talk for hours about Madoff specifically, and there have been a lot of great movies and books out there written. If you're interested, you check that out. I had the privilege of working for the expert witness who was selected to support the bankruptcy trustee over the Bernard L. Madoff Investment Securities bankruptcy. He was famous for those guaranteed returns, and the subsequent evaporation of what was $60 billion of paper investment.

And we'll get to why that's a paper number at the end of his scheme. Like Kurt talked about, Madoff was kind of seen as a scion in the trading industry. His arbitrage strategy was something that was known as a split strike. And, again, this is what he reportedly told investors that he would undertake. This is not actually-- he did not purchase enough securities or options contracts to get this strategy off the ground.

Those option contracts limited or collared the amount of value that could be lost on the trading strategy, as well as limited the gains. And that was how he described his ability to guarantee his returns.

The problem is when you've got hundreds if not thousands of investors, and you're buying and selling these blue chip stocks on a daily basis, you need to purchase these spot options contracts to a significant degree, especially when there's thousands of investors and then these feeder funds, which themselves have thousands of investors in them. It became another problem of scope, similar to Charles Ponzi's 54,000 postal reply coupons.

Madoff was listing, on the aggregation of his customer statements, hundreds of millions of options contracts that he was buying on behalf of his investor clients, when really on the trading days that those options were being purchased, the DTCC only listed about 10,000 options contracts in those. So we're looking at $10,000 times x, the amount of options contracts that were there, and just a scale and scope that would never come to light for Madoff, so some similarities there.

And then one other factor, Kurt, I want to bring up about Madoff-- and, Jordan, you and I talk about this at length. It's interesting because of where we're at today. 2008, $60 billion Ponzi scheme unravels. Everyone has lost their money. But through the work of the trustee, there have been about $19 billion in clawbacks returned to the bankruptcy that can then be shared with harmed investors or investors who lost their money.

That, by far, in all of the leading literature on recoveries, is an anomaly in recovering almost the total amount of what was the principal investment of those investors. That $60 billion number really starts with a $20 billion principal investment on behalf of all of those thousands of investors that was inflated by Madoff's purported guaranteed returns.

One of the benefits and why Madoff lasted so long in this scheme was to continue to encourage his investors not to take their money out after they've made 20% per year, but to reinvest that and compound that return with him. So that's the Delta between that $60 billion headline number and the actual $20 billion of principal that was invested with Madoff.

And that's such an interesting and nuanced fact to Madoff, is that $19 billion collection amount that's been recovered by the trustee and redistributed. So, again, we could spend hours on Madoff. I just like to pull those ideas about scale between Charles Ponzi, the namesake, and Madoff 100 or so years later being in the same boat.

Kurt, before I get too far-- my ego too inflated with that expert label you've given me, I know you've spent a little bit of time working on Ponzi schemes, as well, in your career.

So I've done some work in this space. Just picking up on a couple of themes that we've talked about here-- my work was usually for third parties, financial institutions that banked the alleged Ponzi schemers. And it was kind of interesting.

Part of what we were doing was working with people like Jordan, in circumstances where he's represented a receiver, to try to figure out if there was any money stowed away somewhere that could be recovered for the benefit of investors who were harmed through the scheme. But part of it was also just figuring out how the schemes worked.

Because, again, one of the things that I think these fraudsters, these Ponzi schemers do well, is sort of build out a framework or build an organization that looks and feels and operates a lot like what you would expect a legitimate operation to do. So they have all the pieces. They have the accounts and the relationships.

And they fool not only just investors, but sometimes they fool their colleagues at third party vendors-- whether that's a bank or the person that provides some of their software, the security guard that works in the building, if they have bricks and mortar. So it's really kind of fascinating to just see how sprawling these schemes can be and how much goes into making them seem legitimate.

If you think about Allen Stanford, for example, there were multiple organizations in this web, including a holding company that was based in Antigua, a broker dealer that was based in the US that had, I believe, hundreds of employees, registered representatives that were out selling financial products to investors. At the same time, these organizations are sponsoring huge global cricket tournaments, and they're sponsoring PGA events here in the US.

All along the way, everybody believed in the legitimacy of the organization-- from third parties through investors. So that was sort of one of the takeaways I got from working on these cases, is just understanding how they sort of do it. Right? Not so much the why, but how. The other thing that's interesting just picking up on one of the things you said, Chris, is Stanford, at least, was not a case where they were able to recover all of the principal.

As I said, that was a $7 billion Ponzi scheme. I think as of last year they had recovered about $1 billion. And, just for context, he was convicted and sentenced to 110 years in prison in 2012. I started working on that case in 2009. So in 10 or 12 years, they've recovered about $1 billion out of $7 billion. So Madoff's a little bit of an outlier in that respect, I would have to say.

So what and who cares about whether something is a Ponzi scheme or not. And I know, in some of the expert work I've done as well as a lot of the court cases that we've discussed together, is this idea of a Ponzi presumption when it comes to matters of law. Can you talk to us a little bit about what that means, and the so what and who cares about whether or not something is called a Ponzi scheme?

So when a Ponzi scheme collapses, it's usually not because the Ponzi schemer is making a killing or has legitimately realized returns of x for his investors. It's because they're running out of money. They have missed a payment. They've absconded. They left the country. And then regulators step in. Usually, if the regulator thinks that there's either some assets left or there's some avenues to recover additional assets, a regulator might ask a court to appoint what's called a receiver.

And a receiver is a court-appointed fiduciary, similar to your bankruptcy trustee but subject to some different rules, some interesting distinctions. And the receiver is basically given all authority to act on behalf of whatever entities are placed in receivership. That, in essence, takes away the evil-- as a very memorable case, Scholes v. Lehman indicates-- and replaces it with a fiduciary whose sole and fiduciary duty is to do whatever he can to recover funds for investors.

Now, like I said, when a Ponzi scheme collapses a receiver is often lucky to find maybe six figures in the bank, maybe if he's lucky a couple of million bucks here or there. And, again, that may pale in comparison to how much funds were actually raised. So what the receiver immediately is trying to do is are there other avenues of recovery here.

And the biggest avenue of recovery in a Ponzi scheme, and what often is kind of the touchstone as to whether investors will see more than pennies on the dollar, is are there third parties that I can recover money from. Because there's probably not much money in the bank. Maybe there is some flashy cars or planes. They may seem like expensive assets to you and me.

But when you factor in the cost of finding them, maintaining them, storing them, eventually selling them, they may not be the gold mine you were looking for. So what a receiver will do is, first, are there third parties such as investors who might have gotten more money out of the scheme than they put in. And you can imagine the shock that some investors may experience when they make an investment. Say I invested with you, Chris, and I put in 100 bucks.

And, through a couple of years, I end up getting out 150 back. And I cash out my investment. I say, great, that was a great investment. I made 50%. And then, a couple of years later, a receiver comes knocking on my door and says, hey, by the way, that $50 you made in profits, that wasn't actually profits. That was actually just stolen funds from other investors, and I'm entitled to it back.

And the case law generally is on the receiver side, and it's gotten stronger, saying that it's not fair for an investor who already got back all of their principal to be able to keep those extra profits, those false profits as we call them. So a lot of the time a receiver will file a lawsuit if that investor doesn't willingly give back their false profits. And there's this legal presumption, it's called the Ponzi presumption.

And how it factors in-- and I won't get into the arcane legal details-- but there are various state fraudulent transfer laws that are not designed specifically for Ponzi schemes, but they're basically to help creditors. When there's been a transfer to another creditor that might, as they call it, hinder, delay, or defraud a different creditor, that law can allow a receiver or whoever's bringing the action to set aside that transfer.

So there is somewhat of a difficulty or a process in invoking the benefits of those kinds of laws, because you have to prove that the transfer was fraudulent or that it was designed to hinder, delay, or defraud a creditor.

So what the Ponzi presumption says is, if the receiver can establish that there was a Ponzi scheme being run during the times that these transfers of these false profits were being made, then that establishes that any of those transfers were, in fact, fraudulent and allows the receiver to meet his burden of saying that, hey, I've shown that these transfers were fraudulent, these false profits, and I'm entitled to have them back.

So I guess I'll stop there, because I know I've been talking for a couple of minutes. But that's kind of how the Ponzi presumption factors in. And it's been used very widely, and perhaps rightly so. But it's not absolute, and there's been some challenges to it recently as well.

If you're using a phone service and the business, fraudulent or not, was paying them, their fees every month, those kinds of things you typically can't get back, or at least that's been my experience, Jordan. But I don't know how you would react to some of the limitations on that presumption.

And in the context of an investor who invested $100 and withdrew his investment and got $150 back, which included $50 in false profits, the law generally recognizes that investor has provided value for his original $100 investment, because he had a claim to get that back. So his value is his claim for that money back, because it was his investment. Now, where the law draws the line is any of the false profits.

When those are just money stolen from other people, he certainly has no right or entitlement to those false profits. And it goes back to your initial point, Kurt. You think of it as a fairness circumstance. If you have an investor who invested $100, didn't take any out, and when the Ponzi scheme busted, was out his entire $100 investment, it's difficult to compare them to an investor who had withdrawn their entire investment of $100 plus $50 in false profits and to put them side by side.

And you're right. The law has recognized that there are certain third parties who are entitled to keep transfers, such as fees or payment for services rendered, because they had provided reasonably equivalent value. And there's no reason to believe they didn't act in good faith when they received those funds.

Maybe you can't sell it for as much as they purchased it for. And other money just kind of disappears in various ways. I think a lot of times these people are sort of funding lavish lifestyles and paying for things that you just can't get back. Maybe that's airfare or hotels. So there are lots of ways that the money just kind of trickles away, which leads me to my next question, Jordan. Having represented receivers or court-appointed receivers, you're trying to go find that money.

And I guess I wonder what you think should be the expectation of investors who were harmed through a Ponzi scheme. What might they expect to get back?

Instead, they're trying to put money out of reach of the receiver or any other authorities, they're trying to figure out how they can escape, or they're sending money to their family or friends with what's left. Chris may remember this vividly, but when Madoff was arrested, he had a stack of checks that were ready to go out to some of his closest family and friends with what was left of the billions of dollars he had collected.

He wasn't trying to stroke a check at every single investor to give whatever he could. He was thinking about himself. So I think when an investor realizes that there's been a Ponzi scheme, the circumstances are very dire at the beginning. There's very little assets there, and I think their hope of making any meaningful recovery is solely dependent on the efforts of the receiver and the regulatory agency that's involved.

Like I mentioned, I think the large difference between a minimal recovery, or de minimis recovery, and a substantial recovery is the ability to look to third parties to subsidize any kind of recovery. And it's not only investors who might have gotten false profits, but it's also third-party professionals who might have provided services to the scheme that maybe didn't fulfill the duties they had. And those have been law firms, in the past. Those have been banks.

To a lesser degree, accounting firms. But for Rothstein, like you mentioned earlier, Kurt, the main reason that there was such a substantial recovery-- and call it the Holy Grail, it's 100%-- was TD Bank ended up paying many settlements for its role in the scheme, and it eventually settled with the trustee to pay a significant amount of money that would eventually compensate the victims.

But the other one was Arthur Nadel, who ran a $300 million Ponzi scheme from Sarasota, Florida. And the Wiand in the Wiand Guerra King, Burt Wiand, had been appointed the receiver shortly before I joined the firm. So think in context here. I joined in August of 2010 Madoff was December, I think, of 2008. After Madoff, it was like a set of dominoes.

All these other investors and people associated with these various funds said, oh, Madoff was a Ponzi, let's make sure ours isn't a Ponzi, or, hey, I'm getting my money out immediately. Who knows what could be a Ponzi? So you had a whole line of dominoes going of different Ponzis being discovered in the years after Madoff, and Arthur Nadel was one of them. He ran a large Ponzi scheme out of Sarasota. I actually am from Sarasota.

Many colleagues and people I knew had been caught up in it, and my boss was the receiver. So as we were trying to untangle this with the rest of the team, all these novel legal theories were being put to use and, really, just trying to find ways to maximize the recovery for victims. And it occurred to me that no one was really keeping track on these Ponzi schemes. And it seemed like every day, you would read a news headline that another Ponzi scheme had been discovered.

So I have the idea, went to Burt, and I said, hey, I'm thinking about starting to blog on this. What do you think? It was great idea, and it kind of went from there. So it started as a hobby, and it also helped me.

Because not only was I writing a bunch because there was no shortage of content to write about, but you're getting to see what folks in Madoff or folks in Petters or Stanford or Rothstein, what's working for them, what are they doing to recover assets, and, really, just keeping up-to-date? Was there a good decision on this? Was there a bad decision on this? And it started as a hobby. It kind of spiraled out of-- I wasn't married, didn't have any kids then. I was writing an article or two a day.

And before I know it, it's 11 years later, and I've got thousands of entries on there. Started keeping tabs on the numbers of schemes that were uncovered every year and keeping a database. And before you know it, I had logged almost, I think, 1,000 different schemes. So it's been a very fun experience, if there's anything fun about being involved in a Ponzi scheme. And it's been very educational, not only for me, but I think for people who come across it.

So I guess that would be my story about how it started and kind of where we're at today.

So do that over a couple of years, and you start accumulating hundreds and hundreds of pages. In terms of criteria, you're right. I didn't write a scheme that maybe raised 100 grand or 200 grand. Unfortunately, during those days, there weren't many of those. There were schemes that raised $10 million, or $50 million, or $100 million, or billions of dollars. So I often tell people, unfortunately, there was no shortage of content.

So when I track these things in database, I generally only include schemes that involve either money raised or reported losses of a million or more. As I mentioned, typically, the amount lost is many, many, many multiples of that.

Do you think we're ever going to get to a point where we're seeing fewer Ponzi schemes, or is this just sort of a part of the fabric of the investing world?

You know, candidly, I think if no one had called it a Ponzi scheme then, we might be calling it a Madoff scheme today, just for how awful Madoff's scheme was. But no, unfortunately, I think that the only way that Ponzi schemes are going to go down is if there's much increased regulation and if there's a lot better education about how these things work. And that's kind of the role that I see ponzitracker playing.

With thousands of blog entries that are indexed on these various search sites, hopefully when people are typing in "guaranteed returns," and if the SEC's web page doesn't pop up, then maybe 10 or 20 of my posts pop up and say, well, so-and-so is arrested for this one because of guaranteed returns. So no, I don't see them ever disappearing. I think they're going to be endemic.

But I guess the question is, will they remain rampant, or will better education and regulation trim them down to something that's more manageable?

The Association of Certified Fraud Examiners really came about in the 1980s, when a few of the leaders in the accounting and law enforcement world identified the overlap of those two Venn diagrams and wanted to continue to equip future, what they call, fraud fighters to be intelligent and discerning from a finance and accounting perspective, while also having the investigative tool sets that are more traditionally housed in a law enforcement background.

So for the better part of more than 30 years now, the ACFE has been looking, to Jordan's point, better educate and help support those of us in the anti-fraud community. The 33rd Annual Global Fraud Conferences is what Jordan and I have the pleasure of speaking at next week. I believe there's over 100 speakers and more than 90 educational sessions. Obviously, Jordan, and my favorite, will be one of the morning sessions next week.

There are also some other speakers out there, maybe with less renown than Jordan and I, folks like the acting SEC Director of Enforcement, Gurbir Grewal, famed author Michael Lewis, a gentleman named Pav Gill, who was the whistleblower for the Wirecard fraud over in Europe, and Alex Gibney who is a documentary filmmaker of Theranos fame, with his film The Investor as well as the Enron biopic, The Smartest Guys in the Room.

So maybe Jordan and I aren't the headliners at next week's conference, but there's always talk about Ponzi schemes in these fraud circles. And with Jordan's work on Ponzi tracker and some of the recent investigations that I've worked on, we posited last year that this might be a good avenue to talk about a lot of the things we're sharing on the podcast today, some of those insights and the analysis of thousands of Ponzi cases over the years, and sharing some of that with the attendees.

Chris had approached me and the folks at RSM have been really helpful in providing even more detail to these schemes. So I think one of the greatest things to me about the blog is the database, to be able to see this data and visualize it, and maybe see things that you might not have realized before. And look, we're cognizant of our audience at the ACFE. These are sophisticated folks in the financial industry and the securities industry. Most probably know what a Ponzi scheme is.

They're probably more worried about, hey, how do I advise a client if they ask me to do due diligence on what a Ponzi scheme is? So I think one of the takeaways is being able to better spot some of the warning signs of a Ponzi scheme, to be able to ask the right kinds of questions. Like I think Chris had mentioned in the very beginning, with Charles Ponzi's scheme, he was telling investors that he had purchased way more postal relay coupons than were in circulation.

Madoff, same thing, he was saying he was buying all these options. But if you looked at BTC, there was not even close to the number of options that Madoff said he was purchasing to ones that were actually being traded on those days.

So if you just think-- if you just do your elementary due diligence, and ask a couple of questions, and verify the assets are being held where they say they are, the trades that are being made were actually made when they said they were, you may unknowingly save yourself or your client a whole, big mess. So that's a big takeaway. And I think those two are probably the biggest takeaways I would hope that attendees are able to glean.

All of those conditions that create a Ponzi scheme, whether it lasts for six months or 30 years, I think, to Jordan's point, we're trying to educate folks on what's out there and how to avoid falling victim to this or educating others in your professional circles, if you're a financial advisor or playing a role in helping folks consider how to use, and spend, and save their money-- just to be able to ask that question about, OK, well, why does this happen so consistently,

what are the other issues going on here? Because sometimes some of these investments may not be guaranteed, but they may still be too good to be true. And following that vein through beyond just the surface level red flags is really that thinking that I hope we can instill in our attendees, right? We're kind of kicking into our coverage here, with the certified fraud examiners attending the Association of Certified Fraud Examiners Global Fraud Conference.

But heightening that level of thinking to take all of these schemes together and find through lines between them, I think, is going to be really valuable for the attendees.

I'm going to read you a headline regarding a potential Ponzi circumstance, and you both will have to guess whether that headline is actually related to a real Ponzi scheme or if that circumstance is fabricated and a fraud, right? So Ponzi or Fraud, we're going to do a little bit of a practice session here. Kurt, I'm going to give you this practice question. Here's your headline.

Your headline, Kurt, quote "Aztec pyramid alien technology investment firm bilks investors for more than $5 million." Kurt, is that a real Ponzi or a fraudulent headline?

Kurt, is that headline a true Ponzi scheme or a fraud?

That is wildly correct, Kurt. There was an individual who claimed to be a Hindu goddess' reincarnation and said that because of the favor of the goddess, he would be able to triple investor funds in just three short days, raising over $4 million, but, unfortunately, somehow was not able to triple that money, later telling his investors, it was actually more like seven days for the magic to work and then actually maybe 25 days to triple that return. That's directly from ponzitracker.com.

So, Jordan, I don't know if you have anything else regarding our Hindu reincarnation on that one.

Man bilked Mennonite community out of more than $40 million in Pigeon racing Ponzi scheme. Jordan, is that a Ponzi headline or a fraudulent headline? I'm going to say fraud, only because it doesn't ring a bell.

But when we get down to the brass tacks and the numbers, he took in about $42 million from unknowing farmers in the Amish and Mennonite communities and, when the scheme collapsed, had had promises to buy back over $356 million of future bird offspring. So those of you who are not in the Pigeon racing circles probably have not heard about this Ponzi scheme from back in the mid 2000s. All flavors, all types, as we play our game of Ponzis or Fraud.

No animals or reptiles are safe, it seems, in the ideas.

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