Quote:
Originally posted by wcc
We initially invested two years ago. It was a 6month investment. At the end of 6months they gave us the option to cash out or continue at the same rate of return for another 6months. We decided to keep it in there. After the second term of 6months ended we decided to cash out. Then all the excuses started. I wonder if we tried to cash out after the first 6months if we would have been paid or would the excuses have started then. Who knows.
I learned my lesson, so what are the steps I should take now? Do I even have any recourse?
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Sounds like the classic Ponzi scheme.
At the end of 6 months, they will give you the option to cash out, and pay you with money from "investors" that came behind you, if they have it.
But the scheme generally works by them simply paying high "interest" to investors. Of course, this interest is coming from the principle of subsequent investors.
They give the aura of a legitimate business, but they really aren't.
Ironically, many of the victims seem to come from referrals from accountants.
Here is a recent one that sounds very similar to your situation. I knew some people that "invested" in this, and they did so because their accountant recommended it.
World Vision Ponzi
In that case, people were solicited to invest money on a short term basis, getting 12% return. Some people collected the returns for years. Of course, these interest payments were paid out of the money from subsequent investors.
Every Ponzi scheme eventually collapses, though, because people start getting nervous and demanding their money back. Some start applying heat, and it falls apart.
In the World Vision/Medical Industry Consulting/First South Financial Corporation scheme above, the entities were eventually put into bankruptcy, and a trustee appointed to try to salvage as much as possible for the victims. At the end of the day, the victims got about a 1% return. I guess getting $1K back out of $100,000 is better than nothing - but not much. There were criminal prosecutions,too, with many of them going to Fed prison for a long time, but that's not much comfort for the victims.
I know some considered suing the accountants that made the recommendation, but I don't know how that went. I think if this turns out to be a Ponzi scheme, you might have your best chance of recovery against your attorney's malpractice policy.
6 month investment, high interest rate, supposed ability to cash out but nonresponsive when you ask, TX and FL connections, and some of the other details you gave are all CLASSIC Ponzi scheme indicators.