U.S. Gulf Coast Is Ponzi Scheme Central

Bernie Madoff may have been a New Yorker and R. Allen Stanford a Texan, but the real den of Ponzi sin is in southwest Florida.

Recent financial fraud along the Gulf Coast has cost some 2,500 investors half a billion dollars.

Sarasota Herald Tribune: State investigators say there are likely dozens more schemes in various stages of unravelling in Florida.

But this region has already moved onto the national stage as the home of some of the most notorious suspected scams, leaving some asking: Why here and why now?

Southwest Florida’s appeal for scammers is no different than for their victims: a sun-drenched, artsy and laid-back lifestyle.

Those qualities, in combination with high per-capita wealth and old age, make for good pickings, says Mark Mathosian, a Florida Office of Financial Regulation supervisor who manages a team of investigators digging through illicit ventures throughout South Florida.

Some examples of recent Gulf Coast cases:

  • Scoop Management: Arthur Nadel ran six hedge funds, taking in nearly $400 million. The funds were worth less than $1 million when the collapsed in January.
  • Diamond Ventures: Beau Diamond faces federal charges of wire fraud and money laundering after his foreign currency trading business fell apart in January 2009. He alledgedly took in $37.6 million from the area’s “New Age” community.
  • Morgan European Holdings: John and Marian Morgan allegedly took in at least $10 million from at least 100 investors, according to the SEC. They’re accusted of running a get-rich-quick scheme that promised 14% to 70% returns
  • Brasota Mortgage: Now-deceased founder William Morrison promised 11 per cent yields to those who gave him money — $137 million — to lend out in mortgages. Morrison was only taking in 9 per cent, and most of the mortgages were high-risk.


Image: Sarasota Herald Tribune

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