Posts Tagged ‘ Ponzi scheme ’

6 Tips to Avoid a Ponzi Scheme

February 3rd, 2011. By

They are two words that no investor wants to hear: Ponzi scheme. As in, your money was invested in a Ponzi scheme. People whose money winds up in a Ponzi scheme often have a lot of difficulty getting their money back, especially if they were among the last to invest. There are ways to watch for Ponzi schemes and avoid them. These tips won’t guarantee that you’ll never invest in a Ponzi scheme, but they’ll at least help to reduce the likelihood of it happening.

What is a Ponzi Scheme?

A Ponzi scheme is an investment scheme in which money from new investors is used to pay out previous (or existing) investors. So, when I invest in the scheme (unknowingly, of course), my money is used to pay the would be “ROI” (return on investment) to the people already invested in the scheme. So, in other words, very little real investing occurs. The Ponzi scheme collapses when one of three things happens: there are not enough new investors to pay out previous investors; when large numbers of previous investors demand to be paid out; or when someone becomes suspicious about where the money is coming from. In recent times, the Bernie Madoff Ponzi scheme made headlines—and Carr Miller is now facing allegations of a Ponzi scheme as well.

The Downside of Ponzi Schemes

Because the money isn’t really invested as it’s purported to be, the scheme requires new investors to keep it going. But those new investors, if no one else invests after them, won’t get their money back. Their money has either gone to previous investors or has gone to fund a lavish lifestyle on the part of the person in charge of the scheme. Nice, huh? All your hard-earned money just bought some guy a fancy car and a trip to a luxury resort, while you thought it was sitting in honest investments.

Even previous investors who were paid out might not be safe. Why? Because the money they were given was illegally gained. So they might have to give some or all of it back to a trustee who then determines how to split up whatever money remains—if any does.

How to Avoid Ponzi Schemes

1) Don’t invest with someone just because your friends/colleagues/associates do.

There’s no guarantee that they’ve done their homework about an investment. Furthermore, if Read the rest of this entry »

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Posted in Emerging Issues, Pleading Ignorance, Securities | No Comments »

Office Faux Pas: Greg Invested in Carr-Miller, now what?

January 24th, 2011. By

It’s the end of a long day at the office and Greg has just been made aware that word of his investment in the alleged Carr-Miller Ponzi scheme is spreading through the office like wildfire…


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Carr Miller: 7 Should’ve Seen it Coming Signs (Brian Austin Green included)

January 5th, 2011. By

Carr Miller lives here

Hindsight is 20-20, that’s for sure. And while the Carr Miller Ponzi scheme charges are currently in “alleged” mode, I couldn’t help but do some surfing around—just who the hell is Carr Miller Capital? After all, I grew up in NJ (“Joisey”—ok, I said it) so shouldn’t I know something about them—like, did I go to school with anyone there? Things of this sort get me reaching for my mouse—so I did, and a few clicks later I had some interesting Carr Miller dish…dish that perhaps turns up some should’ve-seen-it-coming signs about falling in love with Carr Miller…

Should’ve Seen it Coming Sign #1: Arrogance.

Did I say Carr Miller was based in NJ? Why yes, I did. Funny though, all the “official” info about Carr Miller Capital refers to them as being “headquartered in the Philadelphia metropolitan area”. What? Joisey not good enough for you? You’re in Marlton, NJ folks. And last time I was in the area—ok, I was in Cherry Hill—Marlton was east of both I-95 and 295 and no, I couldn’t even see the Philly skyline if I tried (Marlton’s about a half hour out of Philly). Regardless, I guess Marlton or NJ didn’t have enough cache for CMC…just like those NY Giants…

Should’ve Seen it Coming Sign #2: Investment company doubles as film production company.

Carr Miller’s in multiple verticals. And how! Their website homepage mentions “…CarrMiller is providing innovative solutions from financial expertise to multimedia entertainment”. Who knew? And they don’t just mean that they invest in such—they OPERATE such businesses. Case in point: Carr Miller Entertainment. Haven’t heard of ’em? You’ve heard of Brian Austin Green, right? Oh—maybe you haven’t since his Beverly Hills 90210 days. His latest—aside from being Mr. Megan Fox—is a movie, “Cross”—and it’s one of Carr Miller Entertainment’s projects. Last I checked, my financial investment team was only in one major vertical: wealth management—mine. Pixar, Carr Miller is not.

Should’ve Seen it Coming Sign #3: Investment company takes keen interest in nightclub.

Carr Miller loves the nightlife. Yep, they apparently like to boogie—or so it would seem. As if film production with “emerging talent” weren’t enough of a sideline, Octo Waterfront Grille in Philadelphia is “A Holding of Carr Miller”. With 13,000 square feet of fun alongside the majestic Delaware River, it may well be a watering hole of choice for those who’ve just found out they’ve been charged with orchestrating a Ponzi scheme.

Should’ve Seen it Coming Sign #4: Head of Investment company has day job as Big Oil exec.

Movies? Nightclub? How ’bout Oil? Not of the olive or suntan type—no, we’re talking big oil here. Yes, Carr Miller had pumped a fair amount of funding into Indigo-Energy. In fact, back in 2008, Indigo’s CEO, Steve Durdin was quoted as saying, “This package with CMC represents a realistic approach with real funding to be strategically implemented for maximum productivity. Indigo can now really begin to move forward.” Of course, here we are about two years later to the day and Indigo’s SEC Form 8-K reveals a complete 180 of things:

In addition, on December 18, 2010, Everett Miller resigned from the Company. The voluntary resignations came in the wake of a civil complaint filed by the State of New Jersey against Everett Miller and his company Carr Miller Capital Corporation and others alleging violation of the securities laws and other violations. See Item 8.01 of this 8-K. Item 8.01 Other Events On December 17, 2010, the Company was named as a nominal defendant in a civil complaint filed by the New Jersey Attorney General against Everett Miller, Carr Miller Capital and certain other individuals and companies. The Company is named because of Carr Miller Capital’s investment in the Company. There has been no allegation of wrongdoing on the Company’s part but the complaint does state that the Company was unjustly enriched by the actions of Carr Miller Capital. The Company had no knowledge of any wrongdoing alleged to have been committed by Carr Miller Capital and the company is cooperating fully to assist the Attorney General’s office in its court action.

Now, lest you think that this was merely an investment opportunity for Carr Miller, Everett Miller was also Chief Operating Officer over at Indigo. Sounds a bit more “hands on” than just signing a few checks. I might also add, as it’s a favorite topic of mine, Indigo’s one of those companies engaged in hydraulic fracturing—but that’s another story.

Should’ve Seen it Coming Sign #5: Investment company achieves high “D” marks (high five’s all around!)

The BBB weighs in on Carr Miller… A little checkeroo over at the BBB shows Carr Miller Capital achieving a D+ rating. Hey—it is at the high end of the D scale. To be fair, the score could’ve come in post-Ponzi allegations. But still, Carr Miller is not a BBB Accredited Business. (Btw, in case you’re wondering, LawyersAndSettlements.com is, with an A+ rating.) Also, to be fair, there were only two complaints noted against CMC at the BBB—both apparently contract issues; one was resolved, the other not.

Should’ve Seen it Coming Sign #6: Investment broker cum real estate brokerage has prayer in hell of earning real estate’s coveted “Circle of Excellence” award.

And there’s another vertical—real estate! Yes, but of course—Carr Miller, well, I’ll let them say it for themselves (from their website): “CarrMiller Real Estate incorporates proven, professional techniques specializing in the marketing, listing and selling of real estate.CarrMiller Real Estate maintains a staff of well-trained real estate professionals who continually strive to provide top quality service for their individual clients and customers.” Phew—that’s a mouthful! And surely you’d think of ringing up Carr Miller should you want to sell your home. So I did! But then I saw there’s only one listing on their real estate website—a rental in Myrtle Beach. They’re maintaining a staff for one listing?

Should’ve Seen it Coming Sign #7: Mention of company + “scam” in same sentence, or as popular google search term.

Carr Miller whispers…Want to check the pulse on something? Hit a message board. No, you can’t take it as fact, but you’ll definitely get some opinion. Like this one, from 2009 over at scam.com: “I am having second thoughts about investing with Carr Miller Investments. In my opinion, I think they are a SCAM company that will take your investment and then file bankruptcy in a couple of years after taking your money.” Uh, well, not exactly but not exactly far off either.

Ahh…should’ve, could’ve, would’ve. It’s all hindsight now, and Carr Miller investors will have to wait for things to play out in court. In the meantime, maybe I’ll go over and become a fan of Carr Miller Capital LLC on Facebook—they have no “likes” so I’d be their first! Or maybe I’ll follow them on LinkedIn where they only have 4 followers (not even Everett Miller, 1 connection, is following). Gee, maybe Facebook and LinkedIn are Should’ve-Seen-it-Coming Signs #8 & #9?

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