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Meet the Perpetrators of the Top 10 Ponzi Schemes in History

Posted by Dan Cogdell | Aug 13, 2015 | 0 Comments

From a recent posting at, meet the perpetrators of the top 10 Ponzi schemes in history, starting with the man who started it all:

  1. Charles Ponzi

Almost one century ago, Charles Ponzi concocted a scheme whereby he promised unwitting investors that he would deliver a 50% return on their money in 45 days, or 100% in 90 days, on international postal coupons that he never purchased. He made $15 million on the scheme in six months. A year later, he was charged with 86 counts of mail fraud and sentenced to five years in prison. After he was released, he started up another investment fraud selling real estate in Florida, some of which was under water. He spent the last years of his life as a translator in Brazil and died penniless.

  1. Lou Pearlman

One of the biggest music producers in the 1990s, Pearlman worked with boy bands ‘NSYNC and The Backstreet Boys but is known today as the man who stole more than $300 million from investors who he convinced to back two companies that never existed. He was convicted of money laundering, conspiracy and making false statements during a bankruptcy proceeding and sentenced to 25 years in prison in 2008.

  1. Michael Eugene Kelly

Kelly orchestrated a Ponzi scheme that defrauded thousands of investors out of nearly $500 million through the sale of real estate time-share investments. He was incarcerated from 2006-2012, where he was released under house arrest to receive treatment for colon cancer. He died in 2013.

  1. Gerald Payne

Payne was the pastor of Greater Ministries International who bilked nearly 18,000 people out of $20 million by promising them they could double their money if they invested it with him and his church. He was sentenced to 27 years in prison.

  1. Scott Rothstein

Rothstein orchestrated the largest Ponzi scheme in the history of Florida, bilking investors out of $1.4 billion by convincing them to purchase fabricated structured settlements. He was convicted in 2010 and given a 50-year prison term.

  1. Gary Gauthier

From 2005 to 2010, this host of a Tampa radio show called It's God's Money stole $6 million from 38 senior citizen investors in three Florida counties by promising them up to a 40% return on their investments in real estate. In 2014, he was charged with racketeering, securities fraud, sale of an unregistered security and sale of a security by an unregistered dealer.

  1. Adriaan Nieuwoudt

This South African entrepreneur sold kits to investors that they could use to grow a culture used in a beauty product Nieuwoudt claimed to be marketing. Once the buyer used the kit to grow the culture, Nieuwoudt promised his company would buy it back at a profit for the investor. In reality, the company only bought one kit a week back from investors and the scheme was revealed with the South African government declared his scheme an illegal lottery.

  1. Tom Petters

The owner of several legitimate companies, including Polaroid and Fingerhut, Petters was convicted of defrauding investors out of $3.65 billion by concocting a scheme whereby investors funded non-existent electronics products purportedly sold to retailers that, in fact, never bought them. He was charged with money laundering, mail fraud and wire fraud, and is currently serving a 50-year prison term in Leavenworth, Kansas.

  1. Reed Slatkin

A Scientology minister and co-founder of technology company EarthLink, Slatkin ran a Ponzi scheme for 15 years through an unlicensed “investment club” beginning in 1986. He was found guilty of 15 counts of fraud, conspiracy and money laundering for stealing $592 million from almost 800 investors. He was released from prison in 2013 after serving his sentence.

  1. Bernie Madoff

Madoff made off with approximately $65 billion in the largest Ponzi scheme in U.S. history. He was convicted of 11 federal felony charges and is currently serving a 150-year prison term in North Carolina. His son Mark, who worked with him but claimed to have not been involved in the scheme, committed suicide in 2010. The Wizard of Lies, a book about Madoff written by New York Timesreporter Diana B. Henriques, is being made into an HBO movie scheduled for release in 2016.

The Cogdell Law Firm is a boutique law firm focusing on large, complex business and criminal financial-related litigation, including white collar criminal defense, securities fraud, health care fraud investigation, criminal appeals and state criminal defense. When results matter most, contact Dan Cogdell at (713) 426-2244 or [email protected].com.

About the Author

Dan Cogdell

Principal & Founder Principal and founding attorney at Cogdell Law Firm, Dan Cogdell, is often referred to by his contemporaries as a “Texas trial legend.” He has been practicing criminal defense law for 36 years, during which time he has handled some of the most complex and high-profile cases i...


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