Scam ahead: Despite warnings, real estate investors keep getting sucked into Ponzi schemes
November 4, 2024 – Media MentionLitigation Partner Priya Sopori shared her insights with The Real Deal regarding the complexities of Ponzi schemes.
Excerpts:
Ponzi schemes are not all alike. Some revolve around fictional investments, while others are legitimate businesses that went astray, according to Priya Sopori, a former prosecutor from the U.S. Attorney’s Office in the Central District of California who once worked on a Ponzi case with 900 victims.
Many investing structures in the industry are also complex — “so complex that they’re difficult to explain,” Sopori, now a partner at Los Angeles law firm Greenberg Glusker, said—which can end up shielding fraud.
In that, Gould was unusual. Fraudsters typically target people with ready capital who lack investment knowledge, Sopori said.
Two factors determine whether prosecutors file a case: the amount of losses and the number of victims. “I would have (prosecuted) if there were a sufficient number of victims to be exceedingly high,” Sopori said. Limited resources mean that investigators favor big players over small-time con artists, so real estate Ponzi schemes need to be of a certain scale to justify movement from authorities.
