Tuesday, 8 January 2013

Ponzi Scheme Architecture and Pitfalls

Radio Shalom 1650AM , Money and Business Show 
October 24, 2012
Banking and Securities Regulatory Compliance
"Ponzi Scheme Architecture and Pitfalls"


listen to show via Youtube


Ponzi Schemes have proliferated and have caused widespread damage to capital markets and in wiping out investor wealth. Just south of the border in the US, in 2008, we saw Bernie Madoff who committed the largest financial fraud in history – bilking investors for over $60B, and sentenced to life in prison.

And these schemes are also taking place in Canada, where regulatory enforcement has been criticized as weak and lacks resources to sufficiently deal with it. We saw the episode with Vincent Lacqroix, right here in Montreal, who defrauded investors for over $40M. The common theme of investor trust and vulnerability is pervasive in these sophisticated schemes.

On this show, we will discuss this and other issues, risks, and concerns around Ponzi Schemes with a focus on steps investors can take to avoid being victims of such schemes with 3 different experts on the matter of ponzie schemes and there widespread use and What are some of the most common indicators or "red flags.

Ponzi Scheme:Architecture and Pitfalls

Program Name: Money and Business with Samuel Ezerzer

Hours : Wednesday live at 4pm, rebroadcasted Sunday at 3am and Monday at 7pm.

Description: The Money & Business Show is the only pure Business show, live in-studio direct from Montreal. The show focuses primarily on the Canadian, United States, and the international economy through a Canadian lens. The show is informative, exciting, and sometimes controversial, encouraging healthy debate.

My name is Samuel Ezerzer, your host to the Money & Business show on Radio Shalom, CJRS 1650 AM. Thank you for tuning in live with our Business studios headquarters in Montreal, the financial capital and the home to the greatest hockey team, the Montreal Canadians. We have another great show for you today and as always, you can call if you have any questions, comments, or criticisms on today's topic. Please call us direct at514 738 4100 ext 200or email me at moneyandbusinessshow@gmail.comif you have any inquiries. You can also visit our website at– all our shows are archived there . 

Today’s topic of discussion: "Ponzi Schemes: Architecture and Pitfalls"

Jack Bensimon

Our guest today is Jack Bensimon, Managing Director of Black Swan Diagnostics Inc., an independent securities regulatory compliance consulting firm located in Toronto’s Bay St. core. He has worked in the securities industry for over 19 years, mainly acting as Chief Compliance Officer (CCO) for banks, investment banking and counselling firms, trust companies, and broker-dealers. He has testified as an expert anti-money laundering witness in federal court for a major banking litigation case.

He is a graduate of the University of Toronto, The Wharton School, University of Pennsylvania (Investment Management). Jack has a Master of Laws (LL.M.) in Business Law from the University of Toronto, Faculty of Law. Jack also has an LL.M. in Securities Law and an LL.M. in the General stream, both from Osgoode Hall Law School (York University). He is chair of the subcommittee and board member of the Canadian Technion Society. The Technion-Israel Institute of Technology is based in Haifa, Israel. He can be reached at

Edward Nagel

Edward Nagel is Principal and founder of nagel + associates. He is a seasoned forensic accountant who has focused exclusively since 1998 on providing forensic and investigative accounting services to corporations, individuals, public sector and not-for-profit organizations and their legal advisors/boards, primarily in the area of corporate fraud

Edward’s experience encompasses leading and conducting financial investigations, investigating allegations of fraud and financial misconduct, providing anti-fraud consulting/training, conducting financial motive reviews and analyzing and quantifying economic damages.

In addition to being a Chartered Accountant (CA), 

Edward is recognized as a specialist in investigative and forensic accounting (IFA) by the Canadian Institute of Chartered Accountants and has testified as an expert witness before the Ontario Superior Court of Justice. Edward is also a Chartered Business Valuator (CBV).Before beginning his career in forensic accounting, Edward spent over three years (following two summer interships) as an auditor for a major international accounting firm, where he specialized in the financial services group.
In addition to his client responsibilities, Toronto forensic accountant Edward Nagel has lectured extensively to law enforcement groups, the federal and provincial government, peers in the accounting field, law firms and other professional organizations on fraud and forensic accounting topics. Edward has also participated an an expert witness in training sessions for litigators.

Kathy Phelps

Kathy Bazoian Phelps , she is a Partner at Danning, Gill, Diamond & Kollitz, LLP
Los Angeles, California
Kathy Phelps has over 21 years of experience as a lawyer in bankruptcy law and fraud litigation, has spoken and written widely on a broad range of fraud and bankruptcy related matters, and has co-written The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes.

She is a thought after keynote speaker on all issues relating to fraud, due diligence, compliance, and Ponzi schemes throughout the United States. Kathy speaks to hundreds of professionals, lawyers, accountants, bankers, financial advisors, investors, and others about mandatory due diligence and red flag warnings that simply cannot be ignored. Kathy has now also written a practical guide for investors and others containing specific tools and due diligence questions to ask, and insights into the marketing and sales tactics employed by the Ponzi perpetrator or other fraudster.


"The Ponzi Book is one-stop shopping for the facts needed to understand the complex fall-out from a collapsed Ponzi scheme as well as the legal strategies that exist and are required to unravel it."

Irving H. Picard,

Trustee of Bernard L. Madoff Investment Securities, LLC

The book, tentatively titled, Ponzi Proof Your Investments: An Investor’s Guide to Avoid Ponzi Schemes, is expected to be released soon. Kathy’s memberships include International Chamber of Commerce FraudNet; Advisory Board, Association of Certified Financial Crime Specialists; Advisory Board, American Bankruptcy Institute, American Bankruptcy Institute; National Association of Bankruptcy Trustees — at

Los Angles, California.

Video and Audio Presentations by Kathy Phelps

Audio podcast, Legal Issues in Ponzi Scheme Litigation, for the LexisNexis Bankruptcy Law Community on May 1, 2012. Available here.

Video, How to Avoid a Ponzi Scheme, with Michael Martin of the Huffington Post. On April 17, 2012, the video was published on the Huff Post Business website.

Audio podcast, Bankers That Bank Fraudsters Could Face Costly Liability to Victims, for the Association of Certified Financial Crime Specialists on April 8, 2012. Available here.

Video of panel discussion, All's Well That Starts Well: Prejudgment Remedies, for the National Association of Bankruptcy Trustees, Spring Seminar, March 29-31, 2012, in Las Vegas, Nevada. Available here.

Webinar, The Costly Collision of Financial Institutions with Ponzi Schemes, on March 15, 2012. Available here.

Webinar, Ponzi Schemes, Securities Fraud and Other Fraudulent Enterprises: From "A" (Asset Forfeiture and Avoiding Powers) to "B" (Bankruptcy) to "C" (Coordinating Multiple Court Proceedings), for the Business Bankruptcy Committee of the the American Bar Association Business Section on March 8, 2012. The powerpoint presentation is available here.

Video from the Annual Fall Conference of the National Association of Bankruptcy Trustees on September 22, 2011, in Amelia Island, Florida, on a panel addressing Non-Traditional Assets. Available here.

Video of a panel discussion on Fraudulent Transfer Claims and Defenses in Ponzi Schemes Cases at the Annual Fall Conference of the National Association of Bankruptcy Trustees on September 29, 2010, in San Francisco, California. Availablehere.


Handling Claims in Ponzi Scheme Bankruptcy and Receivership Cases, 42 Golden Gate U. L. Rev. 567 (2012)

What Do You Do When the Feds Come For Your Assets? Third-Party Claims in Forfeiture Proceedings, American Bar Association Business Law Section's Online Resource, Business Law Today, June 21, 2012

Supplementing the Tools in the Trustee's Toolbox, NABTalk, The Journal of the National Conference of Bankruptcy Trustees, Spring 2012

The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes, LexisNexis (2012)

Liability of Professionals and Insiders in Ponzi Schemes, 27 CEB Cal. Bus. L. Prac. 22 (Winter 2012)

Emergence of Mareva by Letter: Banks' Liability to Non-Customer Victims of Fraud, co-authored with Lincoln Caylor, Martin S. Kenney, and Yves Klein, Business Law International, Vol. 12 No. 2, May 2011

In Pari Delicto and The Blame Game: Should Receivers Get Caught in the Fray?, Receivership News, January 2011

Opportunities for Trustees in Ponzi Scheme Cases, NABTalk, Journal of the National Association of Bankruptcy Trustees, Summer 2010

Bankruptcy Issues Arising in Ponzi Schemes, Century City Bar Association Newsletter, April 2010