Yesterday, popular New York sports talk radio host Craig Carton, half of the popular WFAN morning talk show “Boomer and Carton” was sentenced to three and a half years in prison in regard to a scam in which he and two other men, Michael Wright and Joseph Meli tricked investors into giving them money to be used to purchase large blocks of concert tickets to major concerts of artists such as Adele and Katy Perry that they represented would then be sold on the secondary ticket market for large profits. However, the entire scheme was a scam with no tickets being purchased with the money collected used to pay off Carton’s gambling debts and other personal expenses. As is typical of any Ponzi scheme, earlier investors were paid with funds from later investors.
In addition to the criminal charges, the Securities and Exchange Commission (SEC) also brought civil securities charges based on the same scam against Carton and Joseph Meli. If Meli’s name sounds familiar it may be because I wrote in January 30, 2017’s Scam of the day about him being sued by the SEC in regard to a similar type of scam involving non-existent tickets to hit Broadway shows such as Hamilton.
Ponzi schemes have been an effective fraud tactic for more than a century because they are effective. It may seem to a potential investor that the scheme is legitimate because he or she can see earlier investors earning profits. However, those profits are illusory.
Never invest in anything unless you totally understand the investment and have also investigated the people seeking your money. Before investing with anyone, you should investigate the person offering to sell you the investment with the Securities and Exchange Commission’s Central Registration Depository. This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her. You can also check with your own state’s securities regulation office for similar information. Many investment advisers will not be required to register with the SEC, but are required to register with your individual state securities regulators. You can find your state’s agency by going to the website of the North American Securities Administrators Association. You should also check with the Financial Industry Regulatory Authority (FINRA) for information about the particular investment adviser. It is also important to remember that you should never invest in something that you do not completely understand. This was a mistake that many of Bernie Madoff’s victims made. You also may want to check out the SEC’s investor education website at www.investor.gov. Scammers can be very convincing and it may sound like there is a great opportunity for someone to make some money, but you must be careful that the person making money is not the scam artist taking yours.
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