Why are so many Ponzi schemes surfacing now?
The market downturn that began in 2008 and continued into 2009 did two things. First, it slowed or stopped the flow of new money into many Ponzi schemes as investors became more cautious. Second, existing investors who faced increasing financial pressures during the market meltdown were no longer content to “roll over” their investments and started asking for their money back. Those two scenarios turned out to be extinction-level events for the operators of several Ponzi schemes, which desperately need that ever-increasing pool of money to repay earlier investors. The huge media attention generated by Bernie Madoff’s $50-billion US Ponzi scheme also helped to focus more attention on lesser “too-good-to-be-true” investment schemes. In other words, previously contented investors started asking difficult questions.
