2016 Ponzi Schemes — Ponzitracker

(As a disclaimer, this database is meant for educational purposes only, and was compiled through articles published on Ponzitracker as well as through reporting available on the internet through various sources, including Kathy Phelps' monthly Ponzi roundups at ThePonziSchemeBlog.com. A special thanks to Alison Jimenez with Dynamic Securities Analytics for her assistance in visualizing the data. Individuals accused of Ponzi schemes are presumed innocent until proven guilty. The database generally only included Ponzi schemes of $1 million or more. Please feel free to direct any comments or inquiries toinquiries@ponzitracker.com.)

2016 Ponzi Scheme List

While the number of Ponzi schemes uncovered in 2016 remained consistent with the figures from the previous year, the bigger news was the explosion in the average size and alleged losses incurred in those schemes. At least 59 Ponzi schemes were uncovered in 2016, which was a minimal decrease from the 61 Ponzi schemes discovered in 2015. However, while the average size of an uncovered Ponzi scheme in 2015 was $13.2 million, that number significantly increased to $40.1 million in 2016 - an increase of over 200% from 2015. While there is no independently verifiable explanation for that increase, it presents two equally ominous potential explanations. One is that, with the advent of technology and the increasing reach of avenues such as social media to reach investors, schemes were better able to scale in audience and attract large amounts of victims and funds on a rapid basis. Another potential explanation is that the schemes were able to last longer by evading detection and thus having longer to both attract investors and benefit through word-of-mouth and other methods of attracting new investors. While history will tell whether this alarming trend continues or is just an anomaly, the cumulative amount of alleged losses totaled more than $2.3 billion and was aided by four schemes having losses exceeding $100 million.

The number of sentences handed out to those convicted for their role in Ponzi schemes in 2016 stayed similarly consistent with figures from the preceding year, also reversing the trend from 2015 which saw a sharp decrease in the number of sentences handed out. In 2016, 75 individuals were sentenced to over 600 years in cumulative prison sentences. These figures were well below the figures in 2013 and 2014, which saw a significant spike likely due to the numerous prosecutions immediately following the financial crisis, but their similarity to the 2015 numbers suggests that the sentences may have reached a plateau. The sentences ranged from mere months to decades in prison, with Dave Clark's 40-year sentence for the Cay Clubs Ponzi scheme ranking as the highest Ponzi sentence handed down in 2016.

A full database of uncovered Ponzi schemes and prison sentences for 2016 is below:

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