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Over the Rainbow

David William Thomas of Loveland, Colorado has copped to bilking more than 50 people out of more than $4.4 million in a Ponzi scheme.  According to his signed plea agreement, Thomas promised investors high investment returns from what he called “non-depleting” accounts.  Instead, he ‘depleted’ the accounts to pay his personal expenses and to pay earlier [...]

David William Thomas of Loveland, Colorado has copped to bilking more than 50 people out of more than $4.4 million in a Ponzi scheme.  According to his signed plea agreement, Thomas promised investors high investment returns from what he called “non-depleting” accounts.  Instead, he ‘depleted’ the accounts to pay his personal expenses and to pay earlier investors with amounts invested by those who came later in classic Ponzi fashion.  To maintain the illusion of success Thomas also sent investors phony account statements.   

What is a “non-depleting account” but a money tree?  Of course, the only money tree in existence grows right next to the pot of gold at the end of the rainbow, guarded by an army of angry leprechauns.  If your investment adviser tells you about a non-depleting account, therefore, ask him for a map to the money tree and promise to consider the investment as soon as you’ve shaken the hand of a leprechaun.   

A “non-depleting account” is only the latest in a long line of fictional financial investments that have cost senior citizens billions in retirement assets.  The U.S. Securities and Exchange Commission’s alert on prime bank scams contains a description of a few others - medium term bank notes or debentures, standby letters of credit, bank guarantees, an offshore trading program, a roll program, bank-issued debentures, or a generic high yield investment program.  If you receive an invitation to invest in any of these, insist on meeting the leprechaun personally.  Baby boomers or seniors who do otherwise will likely become someone else’s money tree.

 

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