Mountain Plains Ponzi Scheme
I listened to Richard L. Vail from Mesa State College tell the story about a man named Ponzi in the 1920's. I wish that he would have had more time to complete the story because it didn't seem like the story had any point. It was a story about a man who scammed a bunch of people out of nine million dollars, by telling them that he had an investment opportunity overseas. Basically, He said if you give me one hundred dollars now, in ninety days I will give you back one hundred and fifty. At first many people were very skeptical, but as time went on, he convinced many people to give him their money. He told them that he was taking advantage of an overseas arbitrage situation. He claimed that he could buy stamps and coupons in Italy for a fraction of the cost in the U.S. and then turn around and sell them for a large profit. The model was actually a plausible business model but he never did implement the strategy; he just took the money and shuffled it between investors. To make a long story short Ponzi got caught, bankrupted himself and two banks and then went to jail. The moral of story is arbitration can be a viable business opportunity but make sure that it is legal.
Posted by sara at 10/14/2005 11:13:00 AM