New report: Utah is America’s Ponzi Scheme Capital
SALT LAKE CITY — Attorneys scanned more than decade’s worth of data to show Utah has earned a new title: Ponzi Scheme Capital of the country.
The law firm of Ray, Quinney and Nebekar analyzed the data from ponzitracker.com, finding Utah has more victims of Ponzi schemes than any other state — 1.5 victims per 100,000 residents.
“We have the highest per-capita in the country by almost three times higher than the next highest,” Attorney Mark Pugsley said.
The next closest state was Florida, with 0.51 victims per 100,000.
Pugsley says Utah was second to New York when it came to the total amount of money lost per person — but he thinks that’s only because of Bernie Madoff, who is currently in prison on charges related to an estimated $64.8 billion Ponzi scheme.
“Most of the people that get scammed lose hundreds of thousands,” Pugsley said. “And if you take Bernie Madoff out of it, then Utah has the worst in terms of losses.”
Pugsley says Utahns are generally trusting, which may contribute to the record in the state.
“We tend to be very trusting of one another, which I think is a good thing, generally. But the problem is, when it comes to investing, that’s not a good thing,” Pugsley said.
A Ponzi scheme is a type of investment fraud that resembles a house of cards. Existing investors, at the top of the house of cards, are paid with funds from new investors on the bottom – all while those investors are under the impression their money is coming from some kind of investment in a business or other venture rather than other investors. Eventually, there are no more new investors, and the house of cards collapses.
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