Wednesday, September 28, 2011

James Lovell Ponzi Scheme

Meet James Lovell - 31 Year Old Ponzi Scamster

Scamster. Ponzi scheme specialist. Owner of failed company Mirtna Holdings.  Fraudster. Forger. False broker activity statements. False documents. Taste for luxury such as Mercedes Benz albeit with other people's money.

A few months ago, James Lovell was sentenced to 13 years jail. For a 31 year old guy, he certainly managed to squeeze a lot into his life. The Australian justice system can be rather lame for white collar criminals so he'll probably get parole prior to serving out his full sentence.

Would you be fuming if you were one of the 200 investors that he fleeced $15 million from? He spent investors' money on 'fast cars and lavish parties'. It's unbelievable how he pretended that he was an ASIC licensed securities trader for several years without ASIC doing anything about it. Out of that $15 million worth of investors' money, he lost/spent $11 million worth. Wowzas. How many more Lovell, Madoffs and Munro's are out there still?

Lovell invested only 20% of the funds that he collected and with that 20%, he bought high risk shares which suffered huge losses. His ponzi scheme operated between 2001 and 2009. I can speculate that the global financial crisis triggered his liquidity crisis and thus caused his inability to pay rent when cash flow from investors dried up. And that's how an investigation was triggered and how he was ultimately caught.

Mark Ludlow wrote an article about Lovell and I quote Ludlow, "...Mostly through word of mouth from family and friends, Lovell was able to convice people to hand over their life savings on the promise of earning spectacularly high returns which were never delivered". 
*sigh* When will people realise that if it sounds too good to be true, it usually isn't true? And when will people stop taking financial advice from their family and friends without doing some good old due diligence and research prior to handing over their hard earned dough? Last year I wrote about Bernie Madoff and Roger Munro's ponzi scheme and delved into the issue of vulnerability and lack of due diligence. If you're going to throw hundreds and thousands of dollars of your life's savings towards anything or anyone, wouldn't it be prudent to research every single little thing about the investment?

It's a very sad state of affairs for the victims with many now suffering from depressive thoughts such as suicide and the rest suffering from financial instability. Various investors lost sums such as $150k, $300k, $259k and $1.25 million. I'm going to write about as many of these scamsters and ponzi schemers that I come across in the news so that my words shall live on beyond me and may help prevent future scamsters from ripping people off. Remember folks - due diligence is king.

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