Jordan Maglich Comments on Ponzi Schemes in The New York Times

7/21/2014

Despite Exposure of Madoff Fraud, New Ponzi Schemes Emerge
By ELIZABETH OLSON

When the money was rolling in from investors, Scott W. Rothstein, a lawyer in Fort Lauderdale, Fla., bought his wife, Kimberly, more than $1 million in jewelry, including an opulent 12-carat yellow diamond ring. He lived in a multimillion-dollar waterfront mansion and regularly wrote big checks to charities and politicians.

But the good life ended in 2009, when the government accused him of defrauding investors of up to $400 million with a Ponzi scheme based on selling stakes in legal settlements. Both Rothsteins went to jail.

Their high-flying lifestyle goes hand in hand with masterminds of Ponzi schemes — named after the American fraudster Charles Ponzi who bilked investors a century ago. And despite efforts by the authorities, particularly after the unmasking of Bernard L. Madoff in 2008 in the largest Ponzi scheme in history, these frauds still surface distressingly often around the country. State and federal financial regulators say a new Ponzi scheme operator is found nearly every week, and legal actions are brought against about 100 such questionable investment operations every year.

“Every other day, you see new schemes uncovered that involve big dollar amounts,” said Jordan D. Maglich, a Tampa, Fla., lawyer who follows Ponzi schemes. He started ponzitracker.com in 2009 after working with his law firm to help recover the $350 million that a Sarasota, Fla., hedge fund manager, Arthur G. Nadel, defrauded from investors, and realized there was no central point of information on such frauds.

Over the last five years, Mr. Maglich said, he has followed about 500 Ponzi schemes on his site, which includes links to legal documents, including those filed by the Securities and Exchange Commission, which posts some of them on its website; the Commodity Futures Trading Commission; and state financial authorities.

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