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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Ponzi scheme: a luxurious lifestyle, and now a federal prison term

Well, there was a liquor store, just as he contended.

The problem was that it was owned by his sister and had absolutely nothing to do with what a national media account recently termed "a fictitious liquor business."

That bogus enterprise was where a well-known business mogul and restaurateur told investors their forked-over cash would be going, with the money handed over certain to secure them enviable returns.

Relying on that assurance, they succumbed to the pitch … and were fleeced in the amount of many millions of dollars.

At bottom, the Ponzi scheme perpetrated by New York business owner Hamlet Peralta might have sounded alluringly attractive when conveyed to investors, but was ultimately similar in process and detail to a an often-tried-and-failed model that is routinely followed by many other scam artists.

And that is this: Fish in some investors, pay back a few of the earliest backers with proceeds from individuals who join the sham party a bit later on, continue to hype a bogus financial opportunity while actually spending exorbitant sums of money on personal luxuries … and then get caught.

That was the script for Peralta, who the New York Times states used incoming funds "to fuel a luxurious lifestyle that included expensive clothing, spas and restaurant meals."

Ultimately, Peralta's scheme could not be sustained and, like Ponzi vehicles everywhere, including in California, collapsed under its own weight.

He now awaits sentencing for his $12 million fraud, with his criminal charge carrying a maximum penalty of a 20-year prison term.

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