It's usually at the later innings of an economic cycle when Ponzi schemes unravel. As we've reported on numerous occasions, Ponzi implosions are gaining momentum as a recession could be dead ahead in 2020.
The latest Ponzi nightmare is located in Denver, where one baby boomer convinced a bunch of other baby boomers to give him tens of millions of dollars for cattle trading and marijuana businesses, enticing them with high yield returns, The Denver Post reported.
Settlement documents filed Monday in the U.S. District Court in Colorado, first retrieved by The Post, stated that, Mark Ray owned no cattle and had a pot business with insurmountable debts.
Ray funneled new investors' dollars to pay off prior investors and even channeled funds into personal bank accounts to pay for things like medical bills, private flights, fancy cars, mansions, automobiles, and even had enough funds to cover the expenses of his own cattle, the filing said.
Ray allowed the U.S. Securities and Exchange Commission (SEC) to freeze his assets in the spring so that investigators could examine assets under management.
The Ponzi scheme began in 2014 and collapsed as early as March 2019.
Filings show Ray didn't admit to any wrongdoing in his settlement with the SEC.
The filing claims that at the height of the scheme, more than $140 million per month was being transferred between accounts.
The pot business, called Universal Herbs, had insurmountable debts, according to the filing. Ray provided investors with detailed reports on the cattle and feedlot, but never really had any cattle, it was "mostly lies," said The Post.
"In other words, there were, in fact, no cattle to support the vast majority of purported investments in cattle trading," according to the filing. "Instead, Ray simply used new investor money to repay prior investors."
Ray is a serial offender, was barred from selling securities in 2005 in the state of Illinois for running another Ponzi cattle scheme.
In the last several months, we've reported on a multi-million-dollar Ponzi scheme in Maryland that went bust.
An ex-Fox & Friends co-host fled the country with his family earlier this year after his real estate Ponzi scheme collapsed.
Late last year, a $345 million Ponzi scheme rocked family funds in Baltimore, it was one of the largest ever schemes in the state of Maryland.