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

Ponzi scheme defrauds scores, ultimately brings lengthy prison term

He asked for one.

He got 12.

Years that is, and in a federal penitentiary, to boot.

That was the endgame for investment adviser and resort owner Brian R. Callahan, who federal prosecutors recently stated engineered a notably large Ponzi scheme that defrauded good-faith investors of more than $100 million.

The ruse was classic only in the sense that its promises followed a time-worn playbook, namely hype surrounding investments that were allegedly being made in high-return mutual fund and hedge fund vehicles.

In fact, that wasn't where the money was going at all. Instead, notes the publication Newsday, a huge chunk of it went to "fund a lavish lifestyle" and to pay debts owed on an oceanfront resort partially owned by Callahan.

Although Callahan's attorney stated after sentencing last week that his client "was just stunned" by the outcome (which also included a court order to repay victims nearly $70 million), victims likely would have preferred an even harsher sentencing pronouncement. Several of them showed up in court for closure and to underscore the fact that financial crimes cause great pain for those who are defrauded.

One notable -- and fortunate -- point regarding the scam's ending is the expectation cited by authorities that scammed victims will likely recoup some of their losses. Reportedly, close to $50 million has been clawed back, with part of that coming from money taken in from the sale of the above-cited resort.

Defrauded investors do not often see recoverable assets of that magnitude after a Ponzi scheme's collapse.

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