Senior Citizens Dominate Ponzi Headlines

BLOG UPDATE 10:02 P.M. EST (U.S.A.): This post has been updated with information on Ronald Keith Owens, 73, who was just sentenced to 60 years in prison for running a “prime bank” Ponzi scheme promising huge returns out of the Bahamas. See update at bottom of post.

Here, directly below, our earlier post . . .

Noticed how many of the alleged Ponzi operators and investment scammers in law enforcement’s sights are well into their senior years?

It’s at once fascinating and unnerving. Grandfathers are supposed to be awaiting their dates with grand kids and golfing pals, not legal garrisons and prison guards. This is sad. It makes one wonder how many other gramps are in a high state of panic, desperately seeking ways to create cash flow to stave off the Ponzi fate for another month.

Topping the list, age-wise, is Richard Piccoli, the alleged operator of the Gen-See Ponzi in the Buffalo, N.Y., area. Piccoli is 82.

Arthur Nadel, on the lam from Sarasota amid allegations more than $300 million in client funds is missing, is 76. Andy Bowdoin, who presided over the alleged $100 million AdSurfDaily Ponzi scheme in Quincy, Fla., is 74, and Bernard Madoff, implicated in an alleged $50 billion Ponzi, is 70.

Age is only one area of commonality. Lack of disclosure and a grandiose stretching of the truth also are elements in each of the cases.

Nadel, for example, didn’t disclose he was disbarred in 1982 for using $50,000 in escrow funds, reportedly to pay off a loan shark. He moved on to a finance career that ultimately called for him to oversee $350 million.

Madoff? Experts who passed on deals say they were unnerved by his refusal to discuss specifics. They also found it deal-breaking odd that his accountant worked in a 13-by-18-foot office in a Rockland County, N.Y., shopping strip.

Bowdoin, according to prosecutors, spun a false tale of fabulous business success and did not disclose his previous arrest in Alabama on felony fraud charges — information many investors would have found important.

Piccoli, meanwhile, issued bogus certificates, telling investors his business was endorsed by prominent Catholics and members of the priesthood, authorities said.

It must be a confusing thing to be a grandchild these days, seeing all these senior faces in the news and wondering why older — and presumably wiser — people would choose Ponzi operator for an occupation.

Are there any other gramps out there running Ponzi schemes? And what will they do if asked to say it ain’t so?

UPDATE: The Texas State Securities Board has announced that another senior,  Ronald Keith Owens, 73, has been sentenced to 60 years in prison for operating a “prime bank” Ponzi scheme that allegedly was set up in the Bahamas and elsewhere.

Yes, 60 years.

“Owens promised investment returns of up to 30 percent month, but he was operating a Ponzi scam by paying early investors with money raised from newer investors,” the board said. “Owens also used investors’ money to pay for his business expenses and his and his wife’s personal expenses.”

Read the board’s News Release on Ronald Owens.

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3 Responses to “Senior Citizens Dominate Ponzi Headlines”

  1. Patrick,

    It looks like Owens business model (30% monthly return to early investors solely from new investors’ money) is exactly the same as Bowdoin’s, with the same rate of return……I wonder how similar the eventual prison sentences will be?

    Seems to me though that the state of Texas got it wrong. Don’t they know that offshore Ponzi schemes are legal, and so Owens should have been exonerated?

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  2. Hi Entertained,

    The 60-year Texas sentence is on top of a 63-month federal sentence.

    It is clear they aren’t messing around with Ponzi games in Texas. The Texas State Securities board launched the Owens probe in 2006.

    And they aren’t messing around in Arizona or California either.

    Donald Manning was captured in Nicaragua. One of his business partners was an attorney — Cameron Campbell. Campbell is in federal prison right now. They set up the company in the Caribbean.

    This is the Brixon Group case. Manning faces 10 years in prison.

    http://patrickpretty.com/2009/01/21/donald-manning-president-of-purported-offshore-investment-firm-faces-10-years-in-prison/

    The Owens case was a prime-bank scheme. One could argue, rationally, that a prime-bank scheme of old was one of the things that put ASD/Golden Panda on the Feds’ radar screen.

    Clarence Busby was involved in one during the 1990s:

    http://www.sec.gov/litigation/litreleases/lr15760.txt

    Patrick

    P.S. Very keen observation you made that this fundamentally is the Bowdoin model. Unlike Owens, Bowdoin advertised a “low-sounding” 1 percent a day, as opposed to Owens’ “high-sounding” 30 percent a month.

    Same thing, though.

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