1 Текст для знакомства с лексикой Ponzi Scheme - Definition and Overview of Ponzi Scheme

By Ken Clark, About.com Guide

Definition:

A ponzi scheme is an investment scam where investors are promised, and seemingly delivered, unusually high rates of return.

In a ponzi scheme, the scam artist pools the funds received from victims, living off some and paying a portion back to the investors as interest or gains. The scam artist supplies the victim with false documentation or account statements making it appear as if their investment is still intact and earning an exceptional rate of return.

Naturally, this often encourages investors to sink more money into the ponzi scheme as well as publicize this "great investment" to their friends and other potential investors.

As the ponzi scheme grows, or when a number of investors start requesting the return of their original investment plus its earnings, the scam artist reaches a point where he or she cannot collect enough new money to pay off the old investors. At this point, the ponzi scheme collapses and the authorities become involved.

2. Текст для устного перевода

Art Dealer Is Sentenced for $120 Million Scheme

By john eligon

He cultivated their trust with his longstanding reputation as a prominent art dealer and endeared them with a smile, backslapping charm and firm reassurances. But he used it all to steal — not only money and valuable artwork, but also family heirlooms, memories of loved ones and connections to the past.

Lawrence B. Salander at his arraignment in March 2009. Mr. Salander was sentenced to 6 to 18 years in prison on Tuesday.

Those viewpoints were shared Tuesday by 10 victims of Lawrence B. Salander, the once-esteemed art dealer who pleaded guilty in March to a $120 million fraud scheme that included stealing from the likes of John McEnroe and the estate of Robert De Niro Sr., an artist and the father of the actor.

The victims took turns standing at a lectern in State Supreme Court in Manhattan and calling for a harsh sentence. And in the end, despite a tearful plea for mercy from the defendant, Justice Michael J. Obus ordered Mr. Salander, 61, to serve 6 to 18 years in prison, the maximum term agreed upon in the plea arrangement. He also ordered Mr. Salander to pay more than $114 million in restitution, but acknowledged that it was unlikely that Mr. Salander would be able to come up with that sum.

Justice Obus did not impose a penalty on Mr. Salander’s company, Salander-O’Reilly Galleries, which had pleaded guilty to grand larceny and other charges in the case.

Ellyn Shander, the daughter of the now deceased Dr. Alexander Pearlman, whose estate Mr. Salander stole artwork from, said afterward that the sentence should have been longer.

“We all walk away with shattered lives, and he goes to prison for six years,” Ms. Shander said. “Where’s the justice in that?”

In court, Ms. Shander said that Mr. Salander would tell her father that he was like a dad to him.

After her father’s burial a few years ago, Ms. Shander said, Mr. Salander came over to his apartment that very day to pick up her father’s art collection. Mr. Salander was supposed to hold on to the collection, which included works by Picasso, Monet and Cézanne, Ms. Shander said. But he ended up selling many of the pieces without permission and keeping the money for himself, she said.

“He walked in all concerned and crying for my dad, and he walked out with a $2 million-plus art collection that he stole,” she said. “What kind of human being does that?”

Earl Davis, the son of the American modernist painter Stuart Davis, said in court that he had developed such a close relationship with Mr. Salander that he became Mr. Salander’s “biggest fan.”

But in the mid-1990s, Mr. Salander began secretly selling paintings by Mr. Davis’s father that Mr. Davis had asked him to hold. Mr. Davis, whose father died in 1964, said he found out only later that Mr. Salander dispersed some 90 pieces from his father’s collection.

Mr. Davis said he had difficulty grasping that a man he thought was a friend would steal from him. Mr. Salander “manipulated my totally unsuspecting friendship and trust,” Mr. Davis said.

“Had I been robbed at gunpoint or by a thief in the night,” Mr. Davis added, “it would have been preferable to the ruthlessly drawn out torture that he inflicted upon me.”

Kenn Kern, the assistant district attorney who spoke in court Tuesday, had asked Justice Obus to impose the sentence that the judge ultimately did.

With his wife — from whom he is now separated — and three of his children sitting in the courtroom, Mr. Salander broke down as he apologized in court.

“First I want to apologize to the victims of my crimes,” Mr. Salander said. “I know that I have wronged you and I am truly ashamed of my behavior. You trusted me and I betrayed you and I am deeply sorry for the pain and loss my actions have caused you.”

He added: “I have lost my life, my business and my reputation. I am utterly and completely disgraced.”

His lawyer, Charles A. Ross, also asked for leniency because of Mr. Salander’s health. He recently suffered strokes, he is a recovering alcoholic and narcotics abuser, and he has suffered from serious mental health problems, Mr. Ross said.

Mr. Salander’s health problems and his apology did not elicit sympathy from Ms. Shander.

“I don’t think it was genuine at all,” she said outside the courtroom, referring to the apology. “I think it was self-serving, and I don’t think Larry Salander has changed at all.”

   4 . Текст с занятий

Charles Ponzi and the Ponzi Scheme

Date: Exposed in Summer 1920 Parent Category: Business Scams & Con Artists (1914-1949) Categories: Financial Scams, Con Artists, Financial Scams, Con Artists, Ponzi Schemes, 1914-1949

Charles Ponzi (1883-1949)

Charles Ponzi, an Italian immigrant living in Boston in the early twentieth century, was said by his worshipful followers to have "discovered money." In fact, what he really discovered was a way to bilk the public out of millions of dollars by means of a financial pyramid scheme. There were pyramid schemes before Ponzi came along, but his was so outrageous that this type of scam has ever since borne his name. A Ponzi, or pyramid, scheme involves luring in investors with promises of high returns. The con artist invents a story to explain how the high returns are generated, but in reality he simply pays the first investors with money obtained from later investors. It's a take-from-Peter-to-pay-Paul system. As long as the scam artist manages to recruit larger and larger numbers of new investors (aka suckers) the system works, but as soon as the flow of new money stops, it collapses. Ponzi schemes always collapse, sooner or later.

Ponzi's System

Ponzi's bait to lure in investors was the idea that postal coupons purchased in Europe could be redeemed in America for six times their value, because of the difference in currency values. He established a company in late 1919 to take advantage of this discovery and invited people to invest with him, promising them that his scheme was so lucrative that they would double their money in ninety days. On paper Ponzi's postal-coupon idea was plausible. After all, he was basically proposing a form of international currency trading (which is legal, and which people make money from all the time). But in practice his idea was hare-brained. It would have involved teams of agents buying up postal coupons in Europe, shipping them to America, and then taking them down to the post office to redeem them, one at a time. The cost of paying all these agents would quickly have eaten up any profits. Plus, in order for his idea to work he would have needed to redeem millions of postal coupons, but there were only a couple thousand of them in circulation.

Growth and Collapse

Ponzi had no intention of actually putting his idea into practice. He simply wanted as many people as possible to give him their money, and then let the pyramid scheme system go into effect. At first people were skeptical, but when he actually began paying out returns to the early investors, a Ponzi-mania set in. Thousands of people lined up to give him cash. It's said that he had over 40,000 investors, allowing him to rake in somewhere in the region of $15 million by mid 1920. The inevitable crash came in 1920 when newspapers and banks started to investigate him. Rumors of his criminal past emerged. Investors panicked and began withdrawing their money from his company. This caused the entire scheme to come crashing down like a house of cards. Oddly enough, Ponzi didn't simply take the money and run. If he had been smarter, he would have. Instead he waited around until the police arrived and ended up being sentenced to five years in jail, of which he served three-and-a-half years. Ponzi spent the rest of his life drifting in and out of trouble with the law. He died in Rio de Janeiro on January 18, 1949, penniless

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