Feds Break Up $8.3 Billion In Ponzi Schemes, Other Frauds


A crackdown targeting financial fraud has led to cases against 343 criminal defendants involving $8.3 billion in estimated losses, says Attorney General Eric Holder. “Operation Broken Trust” is the first national effort aimed at a broad array of investment fraud schemes, reports the Associated Press. The campaign was organized by the Obama administration’s Financial Fraud Enforcement Task Force.

The schemes that were uncovered highlight “the pervasiveness of the threat,” said Shawn Henry, FBI executive assistant director. In a Texas case, an oil and gas investment Ponzi scheme defrauded 7,700 investors of more than $485 million. In Chicago, the operator of a Ponzi scheme victimized elderly Italian immigrants and hundreds of others after promising them annual returns of 10 to 15 percent. Seventy-five investors lost $89 million in a Ponzi scheme in Florida. Nevin Shapiro, who pleaded guilty, used some of the money to pay illegal sports gambling debts, to buy floor seats at Miami Heat basketball games and to make payments on his yacht and his residence in Miami Beach.

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