The federal government recently obtained an indictment against a St. Augustine woman claiming she was running a Ponzi scheme through her investment company in St. Augustine, Florida, according to an article on News4Jax.com. The woman was charged with 14 counts of wire fraud, mail fraud and conspiracy to commit wire fraud and mail fraud in federal court in Jacksonville, Florida for allegedly stealing more than $100 million from investors. The federal government claims that the suspect told investors they were investing money in high interest loans and would be assured of a 15% – 20% return on their money. The federal government alleges that she was actually running a Ponzi scheme with the investment funds.
A Ponzi scheme involves a person soliciting funds from investors and promising that the money will be allocated into legitimate investments. The person also typically promises unrealistically high returns. Once the investments start coming in, the person will pay the prior investors with some of the new money coming in and call the payments the returns which ostensibly confirm the promise of the great investment. Ultimately, when new investors run out, there is not enough money to pay off the existing investors and the people start asking questions.