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Investors in North Carolina Ponzi scheme get payment

On Behalf of | Jul 16, 2018 | Firm News |

Two years ago, in neighboring North Carolina, Rick Siskey took his life upon learning he was under investigation for fraud. Now, $10 million from the insurance payout Siskey’s wife received after his death is being distributed to investors.

Siskey had been running a Ponzi scheme through one of his several companies, owing 100 investors, $19 million at the time of his death.

What is a Ponzi scheme?

The “robbing Peter to pay Paul” scheme was renamed the Ponzi scheme after Italian immigrant, Charles Ponzi, for his infamous scheme running between 1919 and 1920 where he raked in about $225 million (in 2011 USD).

A Ponzi scheme is “…a fraudulent investing scam promising high return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. For both Ponzi schemes and pyramid schemes, eventually there isn’t enough money to go around, and the schemes unravel.”

The Case of Rick Siskey

Rick Siskey was a wildly successful Charlotte businessman for over three decades, often making huge contributions in the community. Siskey donated enough for a local YMCA branch, invested in local start-ups and gave generous gifts to friends and family.

Siskey’s success story came tumbling down in 2016 upon the discovery that he had been running a Ponzi scheme. Siskey’s widow, Diane, has since been working with authorities on a repayment plan for investors. This summer, under a plan a federal bankruptcy court approved, $10 million from Diane’s insurance proceeds will go to investors.

For many brilliant entrepreneurs, large parts of their success come from knowing where the line is and staying just on the right side. For some, the line may be crossed. In those cases, it’s critical to secure experienced council who can help you, or your loved ones, find a way out.