Every few years, a news story comes out about a new Ponzi scheme that has defrauded several investors.  When I think of Ponzi schemes the first thing that comes to my mind is Madoff and his multi-million dollar Ponzi scheme.  More recently, a New York fund manager named Jason Konior has been charged with allegedly “orchestrating a Ponzi scheme and stealing around $2 million from three hedge fund investors.”

What is Konior accused of?

  • Defrauding investors
  • Promising investors that his fund, Absolute Fund LP, would match their investments.
  • “Using $2 million of the money he collected from three hedge funds to pay his own expenses and cover redemption requests from prior investors.”
  • “Advertising that his fund provided trading leverage to new and emerging hedge funds.”

Konior’s Charges:

  • Securities fraud
  • Wire fraud

If you want to follow the criminal case, the case name is USA v. Konior, U.S. District Court for the Southern District of New York, No. 13-mag-369.

What is a Ponzi Scheme?

Ponzi schemes occur when money invested by new investors is used to make payments to earlier investors, which gives the earlier investors the false impression that their investments are successful.  What the investors receive is actually paid from money that comes from subsequent investors who are promised the same thing.  When the guys running the scheme fail to find subsequent investors, there is no money to pay anyone, so the cycle fails.

If you think you may be a victim of a Ponzi scheme or investment fraud, visit LawInfo.com to find an attorney in your area today.