Wednesday, January 19, 2005
The U.S. Attorney's Office in Los Angeles announced on Jan. 18 that four more defendants (the total is now seven) agreed to plead guilty to fraud charges as part of a ponzi scheme involving claims about Italian royalty. According the the press release issued by the USAO:
From late 1996 until the Ponzi scheme collapsed in March 2000, DFJ and its sales force promised investors annual returns of 24 percent. DFJ operated on the bogus premise it was headed by a descendant of a royal Italian family that had a treaty with the United States that gave the company and its "knighted" members immunity from paying taxes. DFJ, which claimed a 700-year legacy, opened an Orange County office in 1997. As part of its claims to investors, DFJ said it had interests in hundreds of companies around the globe and controlled $60 billion that it used as collateral in "bridge gap" financing programs. In fact, DFJ was a sham company that did not make promised investments and lulled investors with bogus account statements showing incredible profits. The majority of money solicited from investors went to the CEO of DFJ, a man known as "the Don."
Once your read it on paper, and hear about returns of 24% per year (not as outlandish as many schemes), you wonder how anyone would fall for it. Then again, how many of us invested in Enron, WorldCom, etc. (ph)