Regulator Sees 'Pandemic of Ponzimonium'
NEW YORK (TheStreet) -- Ponzi schemes are on the rise, according to Bart Chilton, commissioner of the Commodity Futures Trading Commission.
"Scam artists are ripping off Americans more than ever before," Chilton said in a speech at the New York Law School. He cited 32 cases tracked by the CFTC in the fiscal year ending Sept. 30, calling the number "a new historic high."
|CFTC Commissioner Bart Chilton|
According to Chilton, in fiscal years 2010 and 2009, the Securities and Exchange Commission filed more than twice as many Ponzi cases as it filed in fiscal 2008 and the Federal Bureau of Investigation has opened more than 1,000 new investigations on Ponzi schemes--a roughly 150% increase since 2008.
Chilton told his audience that "many of the fraudsters are preying upon people through the use of 'affinity fraud,' where they use personal contacts to swindle family, friends, coworkers or even fellow church parishioners."
Chilton and the CFTC have collected various tales of fraud in a book published by the government--profits from which will go neither to him nor to the CFTC. The book's title is "Ponzimonium--How Scam Artists are Ripping Off America."
"It is Ponzimonium out there. Individuals need to be more vigilant than ever about their investments," Chilton said.
-- Written by Dan Freed in New York. Follow me on twitter.