Once again there is news of a Ponzi scheme that has allegedly defrauded several investors. This time the alleged defrauder is a well-known businessman and law school graduate named Craig Berkman.  Berkman has been charged by U.S. Attorney's office and by the Securities and Exchange Commission (SEC) with allegedly devising a Ponzi scheme and defrauding investors.

What is Berkman Accused of?

  • Defrauding investors
  • Fraudulently raising at least $13.2 million from 120 investors, between 2010 and 2012
  • Using investors' funds to satisfy a bankruptcy judgment of $5.43 million
  • Using investors' funds to pay investors $4.8 million in various schemes
  • Using investors' funds for Berkman's personal expenses of $1.6 million

Berkman’s Charges:

  • Two counts of securities fraud
  • Two counts of wire fraud

What is a Ponzi Scheme?

Ponzi schemes occur when money invested by new investors is used to make payments to earlier investors.  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 a Business Tort attorney in your area today.