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A Ponzi scheme Gone Bad

It has been 20 years since I started my financial management company called "coins, LLC." All these years have passed and I still love the race to get at 6 in the morning, shaving, showering, getting the 2 children on the bus, slamming two or three cups of coffee and reading the news. Then log on to the software you need to track the stock market. I trade for a living. I trade stocks and options. I do good for others who are my clients. I make a good return on your money and I love that. What I can say? It's the perfect career way for me.

My customer base is around 600 people, more now. It has grown over the past 20 years by word of mouth. Thinking in it, this is quite exceptional. My business grew with ease. Do not rely on advertising or knocking on doors to drum up more customers. In short, only promises a steady annual rate of return on their investment dollars from 15%. I started knowing that I could do that kind of return. I knew it was doing much more for myself with my own money invested. I started with the intention of giving 15%, if I made 30% in a year then I would only keep 15% for me and my fee. It seemed easy and harmless enough so I did. People trusted me. Was it my attitude? Was it a way I expressed to inflict on my voice? It was like I was, or appeared? Maybe because I was not aggressive in any way, just passed my knowledge and that was it. Not sure that today, but still I have the ability to get others to trust more easily. I guess that is a redeeming quality in itself.

It is the beginning, I was in the U.S. Army. Back it the 80's I read the magazine like Forbes, Money magazine and prospects of mutual funds and how asset allocation worked. In addition, things like what to do with their money for long-term investments, etc. I enjoyed absorbing all the knowledge I could in my time of rest between shifts. After some years, my teammates are looking for my advice. It was probably because I talked about personal financial matters and investments often and that is what was always on my mind. It was nothing I did on purpose, just a hobby. Looking back, I do not think any of that, I just saw this as an opportunity to help others who do not know what do and could not trust anyone else.

In 1989 I realized after helping many of my fellow soldiers and friends at home who had a type of demand for this type of assistance. Three in the morning I could not sleep. For some reason I was wide awake. He kept checking the time every half hour or so. Increasingly frustrated evening continued. At 2 I thought "Shit, I have to get up to work at 6, maybe I should drink a few shots of vodka, I'm going to knock him out." Then realize that not a good idea "You I can not do that, you will be drinking until the bottle is empty and end up going to work drunk!" A 3 am, it hit me like a meteor landing in my room from outer space! "Yes, that's what I do!" I'll just let my friends know that can help them by investing no money for them. It's a win-win for everyone! how excited I was to come to this idea. I could not sleep the rest of the night. But now he no longer cared if I was losing sleep, I was too excited. I had to plan and write a few thoughts to tie it all together.

The next moment came and went like a breeze. I was too focused on my hobby now the attention on something else. Yes, the adrenaline of the first emotion wiped after a week or so, as I recall. However, my career was starting to change side. Like turning the Titanic from southwest to northeast. It was a slow change, but once that was changed side was full steam ahead. I was delighted with my new idea and began to tell all my colleagues who have lived and worked about how far to help them invest their money. I do not remember having to force anyone to allow me to take their money. I thought you know what I would do for them and the word began to spread.

First, it started with 5 people, literally, give me your money within a few months. I think it was around a thousand dollars per person. It was all my friends in the military. In those days, none of us made a lot of money with the government so you do not have tons of investing. No least five thousand dollars, over three thousand dollars I had was enough to work. The Internet was not in 1989 so I had to call my broker to exchange. I do not too often at that time for two reasons. One, who was abroad making it difficult for time zone changes and two, I could put the money in an investment fund aggressive and get the 24% per year, why make it difficult as the job? With reinvestment of dividends and capitalization was a breeze to pay my promised 15%, and envelopes. I kept track of every dollar with a notebook, just because I do not want to forget anything. You see, we take much in those days. Partly because we were young, drink was cheap, possibly only for the family, who knows all the reasons? Forget that things are almost expected. Was a fun time then. It was exceptionally fun for me because I was doing a hobby that I enjoyed doing and help others with it! What a perfect place to be. I'm not sure exactly how to explain it. It somehow felt like god. There was a sense of higher interior, a sense of power, control, performance, all in one. People who invested with me and those who chose not idolized me what I was doing. After a couple of years seemed to be hanging on my every word. Like no matter what I said, never tired and devoured everything that came out of my mouth. To my recollection, I do not think I took it for granted and did not intend to take advantage anyone. This was just my trade agreement with each investor.
At the moment did not think it would make me a rich man. I think he did well. How ironic "Do what you enjoy doing and the money will come." I can honestly say that is what happened.

I finished my enlistment 4 years late 1991. Back to where I was. A dream in suburban New York State, outside of a medium-sized town called Rochester. Then, there were approximately 40 of the military that I was responsible for at least a thousand dollars each. I do not think there was some that had more than five thousand with me for the income level of people associated with. I was a guard in those days. I kept saving my military income and reinvested earnings of $ 150,000 or what was the generation of income for all 40 of us. When I left and went back home I decided to take a job that my neighbor gave me the sale of vehicles in a dealer of good size. The reason laying took the job I've always liked cars and believes it would be a good start to play with them and use my time and money it was investing yet did not require my attention full time on the basis of my decisions on how to invest.
This race only lasted about a year before I was totally on the same and boring. You really have to be there for something like 45 to 50 hours per week. You have to try to sell a car to customers entering and calling back customers do not buy as well as anyone you can think of selling cars. This concept is strange to me. It was difficult, as work and away from fun.
"Aha, I thought, somewhere in 92. "I know, I can be a real estate agent." That will allow me my freedom which does not have to sit in a showroom stupid. They did it for a few years while continuing to invest money for me and others, sending handwritten statements of dollars he had on them and dividend checks to each "customer." This was great at that time. I still was spread by word of mouth with my friends here at home, military comrades who was still in contact with, and I met new people in my area of influence. I should mention that while I was in service longer and in my early twenties, I discovered that there were more people I met greater savings than what I knew was there before. So when I came to new customers, which is entrusted me with much larger sums of cash.

In 1997, about 8 years since the beginning of my great idea, which had more than $ 3 million that was working with about 150 "clients." I had also trained in how to trade options and other risky investments contributed to the aggravation of dollars. The numbers began to arrive amazing. I decided to give up my way called Real Estate career by doing what I love. I was forced to abandon almost the same as the trade and keeping track of all this money is consumed most of my days for now. Real estate sales began to get bored of this time as well. Still had to work on getting business, not just fall into your lap as the money did. During the era of '97, the computers were out in full force and very expensive compared to today's dollars. I decided with the times and buy one to try to keep to manage my investments and investors. This was necessary because I was beginning to feel overwhelmed. I took a few days to get all figured out, get the information loaded on my work computer and printer. Then I discovered a store of the Office of a species that could buy a software I give the templates for different uses. One I like best was a generic statement. I thought it would be great to use and make me look and feel professional. I can send "official statements" every quarter to my "customers." I've also printed cards fantasy, good business professional. Rationalization for me to delegate some of the tasks was to hire a personal assistant. I interviewed and found a good quiet girl named Sara. She started to make all my statements always promised to send. I just teach the content, which would have to write up and get it mailed. No questions asked. What does she know my business anyway? Perfect for two. This saved me a lot of time.

Love was in the air around this time. My wife and I got married in the summer of '97. It was wonderful and she is beautiful. In those days you were courting she looked at me like I was some kind of hero. Probably because all the things he had heard of my hard drive to make more money from existing money he had and all the huge profits to provide to others. Also expected was an exorbitant rent and I did not disappoint. She was spending ten thousand dollars a month who knows what at the time.

By 97 he began to realize that the more money I had was increasingly difficult to make huge profits on it. There were a few notable reasons. One, there by the end of the 80 could roll the money into a savings account and make an 8%, now it was more along the lines of 5%. This is a small loss, but it shows not because inflation was around longer than created higher interest rates, the rates were lower for "safe" investments. In addition, I had to watch because not only can throw $ 4 million in a security or have problems and be accused of manipulation, etc. by the SEC. So I was forced to work with smaller amounts most of the time. This began to cause me headaches because I was still promising a return of 15%, however, was not taken from 24 to 40% of the total pot of cash as it did just a couple of years ago. This bothered me some, but I forbade him inside. Everything will be fine, there are more and more people investing for me anyway.

In late 1998, was quickly over 10 million dollars my control. This was still exciting and fun, but I was constantly nervous. I had to keep the money invested, do more with it and pay me hundreds of "customers." Not to mention that it was just before the tech bubble burst in the stock market. I knew everything was way overpriced and it was a matter of time before we had some kind of correction. Everyone keeps investment and thought they could not do anything wrong, everything that makes money in the late 90. With that kind of mentality, more "clients" were throwing money at me all the time hoping that I could not go wrong. This also put pressure on me because no matter what I have researched to invest in trade or fear living shit out of me. The relations of the investments were too high. Something was going to give, but I did not know when.

2000 rolls fast. Just to keep up, easily transported 15 million dollars of money that controls at that time. He had two houses, one in the Hamptons, on Long Island and one in Canandagua Lake in upstate New York, just south of Rochester. The houses had a staff combined in my list of 10 which equates to nearly half a million a year just for salaries and benefits. Heck, the building that housed my collection of 30 cars Price $ 2,500.00 per month cost to heat only. And my wife was somehow spending thirty thousand U.S. dollars per month. Our homes were under constant renovation and additions to By now my wife needs a hobby too. I could not blame her since I had my perfect hobby. She seemed to find a creative outlet with renovated houses all the time. Everything was cut along with a couple of small ulcers when the bubble burst!
This burst of the tech bubble and 9 / 11 was very stressful for me. Although I kept it to myself not lead to some potential problems that may arise. For example, the loss of a bundle of money in the stock market and fifteen percent of my "customers" asking to get their money from my account. I just lost 15% of my "customers" because they still had statements that indicate a return of 15% of your money and NO losses. This was difficult to do, but for now they had to do. There was no way I could tell someone who lost part of their money. First, in the last handful of years, so many customers were signing up and gives me money, and money was not growing as fast as before, my household spending was apparently out of control and I was having a hard time trying to keep track of everything. I make statements general to all investors to try to simplify and not have anyone nervous.

Well, all set for the biennium 2002-2003. At the end of 2003, pour more investors than ever before. This was mainly due to word of mouth to me as a money manager could do no wrong. I continued right through in bad years to show big gains of the "clients" statements. These people boast and brag all over the place how brilliant I was and how smart give me your money. The money was flowing into me again, as I have never seen. In 2004 I can honestly say that I stopped keeping track of where the money went and Or from. I kept track of the "clients" because they had a turn and his statements. At that time I was more than 600 customers and money all over the place. Was the diversification of the money because there was not much of it. I think when I lost the count was somewhere around 60 million dollars. Looking back Now, I have hired more staff and I probably legitimate certified financial planner and stockbroker. Well, that was more effort than I wanted spend on something that did not care to be bothered with.

Over the years we entertained a lot. We hold dinners, cocktail parties at the club. Any excuse to party with friends. All these parties were very lavish. top shelf until the end. Sometimes we want to hire limousines to pick up and leave all the guests. Why Why do not we have such abundance that we have been through. It also helped to mask the underlying nervousness is still there. I was distracted in my spare time. Binge drinking until at parties also helped me sleep at night too. If I did not drink myself to sleep, I medicate with pills to sleep at bedtime. I think that kept me sane in some level. He kept hitting the wolf at the door.

There was a lifestyle I could only dream of. Certainly tried not to take for granted. I think it became more difficult as the years went buy because people continued to treat me like a kind of god like figure. Everyone in a place "yes" ed "me. I began to think I deserved it and it was my right to have for the wealth so much in my life. I think I did or he did, I'm not so sure what. We flew by private jet only. Shopping in Paris, holiday in Monaco, traveled anywhere in our hearts desired. He threw parties at our house in South Hampton to impress all the big money are New York. He bought a penthouse in Manhattan as a status symbol. I even had a $ 25 million yacht used once a year.

Well, now, Holloween 2008. What would someone in my position to do now? It is the only question I be done. Why? Do you ask. To date I have 2000 to 3000 'clients' request to swap some if not all their investment dollars again. All started on a steep downward slide in January 2008. Everything was fine until now. I was sending checks to those who wanted out. At the same time, printing more returns to investors even with me and trying to avoid the downward spiral in the stock market all year round. I managed to save the majority of free fall, but lost some. Not even give you an idea of the number of people applying for a refund. I thought it was no big thing, like in 2000/2001 time frame. It would weather the storm and move on. This time was different. I honestly fear is rooted to the average person. Well, with the housing market leg, the banking crisis and all that. There are too afraid now vs. then. July '08 reached a new bottom in the stock market and the number of withdrawals of spikes. Now, in October 1908 and saw a new one in the bottom of the stock market, foreclosures are at an all time high, the auto industry's implosion and the financial crisis still in full swing. It is so bad that interest rates are at lows of 47 years and lenders are not lending money to consumers old ones. Consumers are not buying anything. There is definite fear on real people. We are making history now.

I'm up to my last 6 million dollars in cash. Not long ago, I know it was somewhere over 100 million dollars. Where do I go from here? I mean, what I tell investors still held last? For the love of god, what I tell my wife? 6 million dollars! I can not live with it, much less pay more requests for cash and try to pay dividends on it! This is bad. I came up clean, but that would mean going to jail because it was never certified as a financial planner or broker. I'm only 41 years old. Jail? Could last the rest of my life in jail? Is this an option? If I do confess, it would be a success because of me? Do I look over my shoulder until it's time to get into my car, turn the key and explodes!? Talk about stress, I have to keep everything a secret is much easier to come clean.
What are my options then? Well, I could run to another country. But then I would have to live with the terrible guilt of leaving my family and they deal with the fall out and live in poverty and have never known. Could survive? Could you live with that knowledge? I do not know.

There seems to be the only option for me one more to explore. But how I can go? Hanging from the belt or something? No, I can not do that. What if my family is? Not good. What too many pills? No, it is still by graphs. What about the exhaust hose in the car with the garage closed? Good thinking, but also graphics for the family to get me. In addition, the garage is very large, probably survive. I know, I have to take the whole family with me. Yes, that's my best answer. Just make sure that it is quick and easy. I have the perfect solution, we rented a small house in the Adirondacks for a weekend. Everyone goes there, and I loosen the supply line natural gas hot water tank or furnace to create a leak. Then when we all go to sleep ... ...

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