Examples of securities fraud include Ponzi or pyramid schemes, broker embezzlement, and foreign currency fraud.

Stock and securities fraud: Typically involves the selling of stocks, commodities, and other securities through deceptive practices.

Examples of tax fraud include knowingly underreporting taxable income, overestimating business deductions, and simply not filing a tax return.

Tax fraud: Takes place whenever a taxpayer attempts to avoid or evade paying federal income taxes.

Similarly, wire or mail fraud charges are often applied in the prosecution of racketeering and RICO Act violations. For example, since the mail or telephone are typically used in attempting to arrange bribes of judges or other government officials, federal prosecutors may add charges of wire or mail fraud in addition to charges of bribery and corruption. Mail and wire fraud are often added as charges filed in other related crimes.

Mail fraud and wire fraud: Using regular mail, or any form of wired communications technology, including telephones and the internet as part of any fraudulent scheme.

However, some sources estimated investors’ losses as high as $20 or over $281 million today. Convicted on federal and state charges of fraud, Ponzi had conned investors out of an estimated $7 million-over $14 today. Ponzi managed to maintain the facade until he was arrested in August 1920. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, the schemes tend to collapse.

With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. This allowed him to appear to be making good on his fantastic promises of 50% returns in 45 days. Instead of using investors’ money to turn profits with IRCs, he simply paid exiting investors with funds collected from new investors. Using this IRC plan as bait, Ponzi lured investors into what would become the basis of all future Ponzi schemes. Ponzi came up with the idea of buying IRCs in one country and exchanging them in a different country, where their value was higher. When people received a letter from overseas they also received an IRC that could be redeemed for the money needed to send a reply. Actual loss or injury suffered: The victim suffered some actual loss as a direct result of their dependence on the false statement.However, persons known to be illiterate, incompetent, or otherwise mentally diminished may be awarded civil damages if the perpetrator knowingly took advantage of their condition. Reliance on rhetorical, outrageous, or clearly impossible statements or claims may not amount to “reasonable” reliance. Reasonable reliance by the victim: The level to which the victim relies on the false statement must be reasonable in the eyes of the court.Intent to deceive: The false statement must have been made expressly with the intent of deceiving and influencing the victim.Knowledge of falsehood: The party making the false statement must know or believe that it is untrue or incorrect.For example, the false statement contributes to a person’s decision to purchase a product or approve a loan. The gravity of the false statement should be adequate to substantially affect the victim’s decisions and actions. A misrepresentation of a material fact: A false statement involving a material and pertinent fact must be made.

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