Ponzi schemes are often long and difficult schemes to investigate. There can be many victims involved that span across multiple jurisdictions and cash can be hidden quite well. With this type of scheme, it is extremely important to have a forensic accountant on the investigative team.
In a Ponzi scheme, the forensic accountant will be able to trace the money back to the financial advisor that has stolen money from his investors. Essentially, a Ponzi scheme involves a financial advisor receiving money from an investor for an investment, but the advisor diverts the funds to support his own lifestyle. He then falsifies financial statements for his clients showing high yields on investments and pays out “dividends” and “interest” with money from new investors. This type of scheme often occurs during financial bubbles when investors are looking for high yields. Financial advisors take advantage of this and are then found out when the bubble bursts because investors rush to withdraw their money, only to find out they don’t actually have any funds to withdraw.
The job of the forensic accountant is to follow the money trail. At HSNO, our accountants are highly trained in discovering where your money went after it was released by you to be invested. We specialize in locating other victims, determining where your money was actually deposited, and how much you have lost in the Ponzi scheme. Forensic accountants investigate funds going in and out of the offender’s bank account to assist law enforcement officials in determining when and how much cash has been stolen from investors.
If you believe you or your clients could be involved in a Ponzi scheme, it is important to have the matter investigated immediately. Offenders can be anyone involved in the investment of others’ money. Ponzi schemes are on the rise and can happen to anyone. The FBI has hired more investigators and opened more securities fraud investigations in the past few years, indicating a rise in these types of schemes throughout the nation. To protect yourself and your clients, be aware of any investments that seem to be performing better than the national average or that provide a steady and consistent income. Predictable returns are a red flag that your money may not be invested in the way you thought it was.
If you notice any of these warning signs, let the forensic accountants at HSNO know right away so they can begin investigating your case. We can provide lawyers with a detailed analysis of cash flow and provide concrete evidence of a crime. The tedious work required to uncover the full extent of a Ponzi scheme is proudly performed by the forensic accountants at HSNO.