Ponzi schemes thrive due to underfunded watchdogs, vulnerable victims

Sam Antar is a fast-talking former accountant who wears snazzy suits and eye-catching silk ties.

With a twisted, toothy sort of grin, he especially likes to greet a room full of perfect strangers with: "Hi, I'm Sam Antar, and I'm a crook."

Antar wants you to understand how Ponzi operators and fraudsters steal money by taking advantage of "nice people" for years, only to be arrested after their schemes collapse and lives are wrecked.

"Criminals like me consider your humanity a weakness to be exploited in the execution of our crimes," Antar told participants at a recent conference at the John Jay College of Criminal Justice. "We can steal more money with a smile than we can steal with a gun."

His unvarnished message is an unnerving but timely one: it seems a new Ponzi scheme is unraveling every day, a Bernie Madoff lurking at every turn.

Securities and Exchange Commission enforcement director Robert Khuzami said this week the SEC has halted more than 75 Ponzi-related schemes since 2007 – including several cases in Sacramento.

Police, lawyers and academic experts say Ponzi schemes flourish undetected for years for several reasons: securities regulators and law enforcement agencies are underfunded, auditors are undertrained, while victims are vulnerable to get-rich-quick pitches.

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