The title of this blog has nothing to do with a sports score. It’s symbolic of a very sad story. I usually try to avoid sad stories in my posts, but this is an important one. Let’s just say it’s a cautionary tale.
Earlier this week I received an e-mail from a reader expressing his disappointment in Clawback, the Ali Reynolds book dealing with the Ponzi scheme. His position was that the “happy ending” in the book was totally unrealistic. He went on to explain that he had been caught up in one of the largest Ponzi schemes in California, one in which he had lost the majority of his assets. Unlike the Ponzi victims in my book, he didn’t get his back. He was writing to me in the hope that I’d be wiling to tell the non fiction story of his—a story, he said, that needs to be told.
I wrote back to explain that Bill and I, too, had been taken in a Ponzi scheme to the tune of $500,000. I explained that writing Clawback the way I did—where the bad guy gets caught and the people get most of their stolen monies back—as a way of finding … well … closure. The bad guy in my book was going to prison with a lot more charges hanging over his head than just the financial ones. Back in real life and in our case, the bad guy was charged with white collar crimes only and went to prison at Club Fed for a mere 17 years. He’ll be out on good behavior in 8. His money (OUR money and his other victims’ money) has never been found. Once he’s out, he owns it free and clear. Some of his victims are back at work in their seventies and eighties.
I ended my e-mail by telling my correspondent that, having revisited that time in my life and those events in fiction, I had no desire to do so by writing a non-fiction work. I suggested instead, that he consider contacting the production folks at the television series American Greed. At the end of the note I asked if he would like to be added to my new book notification list.
His reply is why I’m writing this post. He said no thanks, to the book notification list because he is no longer able to buy books. He reads books borrowed from his local public library. He said he was sorry to hear of our loss. His was more than four times our loss and included almost all of his assets. He went on to say, “I rarely use my heat in winter nor my A/C in the summer. Not many people see their thermostat read from 51 to 92.”
Whoa! No wonder he was offended by my fictional ending. Here’s someone who was left destitute. He went on to say that he’d never heard of American Greed. I suspect that not only is he living without heating or air conditioning, he’s also living without cable TV which, come to think of it, might not be such a bad thing.
As you’re sitting there sipping your Friday morning coffee and reading this, you may be wondering how smart people end up being caught up in Ponzi schemes. In our case, it was suggested to us by our “wealth management advisers,” people from a firm we’d worked with for years. (Wealth MIS-management would be more like it!) They told us what a great guy the Ponzi fellow was—how smart and what a terrific golfer. They somehow failed to mention that he’d been accused of financial improprieties while still in college. Wait, they didn’t know about any of that? Where was THEIR due diligence?
We were given three funds to choose from. The projected earnings were not outrageous—sightly above market. Since we weren’t expecting to get rich quick, we chose the middle one. The accounting firm auditing the funds was one we had worked with before, and that gave us confidence. What we didn’t know was that each time they were going to audit a particular fund, someone would call Mr. Ponzi guy up and let him know in advance, allowing him time to move funds around so that, on the day the audit took place, the money in that fund would be there.
So why am I writing this today? As a word of warning. The money we worked to earn is gone, and it’s not coming back, but we were lucky. The amount lost wasn’t a huge part of our assets—and we were young enough, or at least able enough to keep working and earning. That means we’ve been able to recover. We can still turn on the heat and the AC, so the old admonition about not putting all your eggs in one basket still holds true.
I’m offended that the only people who seem to have made any money out of this situation are the bankruptcy attorneys. I’m sure they’re getting paid for their services on an on-going basis, but none of the Ponzi guy’s seized assets are trickling down to the people on the bottom of the heap—the ones he victimized.
When the scheme blew up and we knew our money was gone, Bill and I didn’t stand around blaming each other. We had made the investment decision together, and we took our lumps together—the same way my correspondent is doing—only he’s doing it without heat or air conditioning. It is what it is.
Here’s my word of caution for the day: If someone—even someone you know—tells you, “Boy do I have a deal for you,” BUYER BEWARE!
As for my reader? He isn’t in my newsletter list, so I don’t know where he lives, but wherever that is, he’s in my thoughts and prayers. And I hope the weather there isn’t too ungodly hot. You can add layers to help warm up, but taking off layers doesn’t help you cool down.