Pyramid schemes are nothing new. For more than two centuries individuals or groups that are interested in separating people from their hard-earned cash have found new and creative ways to lure unsuspecting victims.
Some people, believing it may be a legitimate opportunity to get in on the ground level of a business prospect, have dumped thousands of dollars into this type of scheme only to see no return on their investment.
When the light goes on, and they realize they have been swindled, there is little anyone can do to help.
Pyramid schemes follow a predictable pattern: a person known as the recruiter creates a “business” or “product” to solicit investors. The investors make an initial payment and then solicit other investors.
When the new investors sign on by investing in the prospect, the money is stolen by these criminals. The new investors then solicit new partners and the cycle continues until there is no one left to join the pyramid and no additional money invested.
Recently, an old friend visited my office to explain that he and his girlfriend had become victims of a pyramid scheme. They had invested in this scam and lost all their money. His name is unimportant to the story.
What is relevant is that he and his girlfriend are of Hispanic descent. They were approached at a neighborhood bodega about investing in a business venture that would provide them with a great return on their investment.
People must be aware that the criminals who operate this type of pyramid scheme are targeting our immigrant community.
There is nothing particularly unique about unsuspecting immigrants being taken advantage of. And, truth be told, many who are victimized by these schemes are affluent and very well educated. The Madoff investors are just one example. But for many people who are new to our shores, the language barrier works to their disadvantage because many new Americans do not have access to news reports and community information that warns of these types of scams. And, sadly, many who are victimized feel they cannot report these crimes to our authorities.
The criminals who organize these schemes are very good at hiding themselves. They have no place of business, no phone number, and usually leave no trail. They slip out in the dark of night leaving the victims with an empty bank account and broken dreams.
Each of us must be cautious when so-called “friends” or those who speak the languages of the nations from which we have come try to persuade us to make investments that will too often turn out to be swindles.