Wednesday, January 6, 2010

Massachusetts Man Charged In $29 Million Ponzi Scheme

Richard Elkinson, 76, of Framingham, Massachusetts, was arrested and charged yesterday with operating a Ponzi-type investment fraud scheme that bilked some 130 investors out of $29 million. According to prosecutors, Elkinson gave investors promissory notes bearing interest rates of up to 13 percent to fund a purported business that helped supply uniforms to governments and large organizations. The scheme unravelled last Spring when payments were not made on the promissory notes. Elkinson reportedly targeted wealty older Jewish investors through social networking groups in what is being described as an "affinity" scheme similar to that of Bernie Madoff. According to the Boston Globe, Elkinson allegedly used “finders’’ such as Jay Fialkow of RossFialkow Capital Partners to steer investors to him, in exchange for a 2 percent fee. The Globe reported that Fialkow said he had nearly $1 million of his own money invested with Elkinson, and family members invested another $400,000, according to the FBI affidavit. He was arrested in Mississippi. Investigators believe Elkinson was a big gambler who had large lines of credit at casinos in Las Vegas and elsewhere.

Read the story here, here and here.

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