Affinity group fraud. Payphone and ATM sales. Regulators say the largest of these investments appeared to be nothing but Ponzi schemes. These notes are often sold to investors by independent life insurance agents. Roughly half the states have Internet surveillance programs that watch for fraud or investigate investor complaints.
Regulators urge investors to ignore anonymous financial advice on the Internet and in chat rooms.
Always in style, these swindles promise high returns to investors, but the only people who consistently make money are the promoters who set them in motion, using money from previous investors to pay new investors. Inevitably, the schemes collapse. Ponzi schemes are the legacy of Italian immigrant Charles Ponzi. Her intention, she told her broker, was to use the money to pay her mother's nursing home bills. Regulators say sellers of callable CDs often don't adequately disclose the risks and restrictions.