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On Trial for Fraud, Ponzi Scheme

Ponzi schemeFrail ex-Delray commissioner on trial for alleged Ponzi scheme says she never intended ‘not to pay back the money’

Former Delray Beach City Commissioner Charlotte Durante took the stand in her own defense Friday, vehemently denying prosecutors claims that she stole an estimated $1.8 million from people who came to her believing she would pay them big returns on their investment.

“It was never my intention, never a thought in my mind, not to pay back the money,” she insisted.

Further, she said, all of the 83 investors knew she was using their money to help her daughter establish the Museum of Lifestyle and Fashion history.

When prosecutor Ryan Kelley pointed out that none of the 26 investors who testified during the three-day trial said they ever heard of the museum, the frail 68-year-old bristled.

“That’s the 26 people you railroad in here,” she shot back. “I have absolute proof that people were told.”

However, none of that proof was presented to the jury. When testimony concluded late Friday afternoon, only Durante and her daughter, Lori Durante, were called to dispute prosecutors’ contentions that the longtime and respected real estate agent had run a lucrative Ponzi scheme (source, full details).

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.

Five Key Elements of a Ponzi Scheme
  1. The Benefit: A promise that the investment will achieve an above normal rate of return. The rate of return is often specified. The promised rate of return has to be high enough to be worthwhile to the investor but not so high as to be unbelievable.
  2. The Setup: A relatively plausible explanation of how the investment can achieve these above normal rates of return. One often-used explanation is that the investor is skilled and/or has some inside information. Another possible explanation is that the investor has access to an investment opportunity not otherwise available to the general public.
  3. Initial Credibility: The person running the scheme needs to be believable enough to convince the initial investors to leave their money with him.
  4. Initial Investors Paid Off: For at least a few periods the investors need to make at least the promised rate of return – if not better.
  5. Communicated Successes: Other investors need to hear about the payoffs, such that their numbers grow exponentially. At the very least more money needs to be coming in than is being paid back to investors

Source

West Palm Beach Fraud Defense Attorney

At the law firm of Andrew D. Stine, P.A., in West Palm Beach, we have extensive experience representing people charged with fraud crimes, including mortgage fraud, mail fraud, wire fraud, securities fraud, tax evasion, insider trading, theft by fraudulent means, writing bad checks, and organized schemes to defraud.

In Florida, most fraud charges involve the Economic Crimes Division (ECD) putting together a great amount of evidence for presentation before a grand jury. The best way to resolve these cases is for your lawyer to have a good working relationship with the prosecutor and to try to avoid any serious consequences by paying restitution. In Florida, restitution outweighs incarceration, so if your lawyer can persuade the victim to drop charges in favor of receiving their money back, you can usually avoid a conviction.

If you did not commit the fraud crime, we can prepare an aggressive defense and force the state to prove its case. In many cases, that can be a difficult thing for the state to do.

Free consultation 24/7: Call West Palm Beach criminal defense lawyer Andrew D. Stine, P.A. at (561) 832-1170. Se habla español.

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