Tuesday, July 3, 2001

Anatomy of an Internet scam Federal investigators have charged 53-year-old mid-westerner Donald A. English with perpetrating an Internet-based "Ponzi" scheme that bilked tens of thousands of small investors out of $50 million. In a Ponzi scheme, early investors are paid phony "profits" from the money taken from other investors who follow them, after hearing about the huge, fast profits. Since no money is really being earned, the pyramid eventually collapses, when the supply of new investors diminishes. Many of the investors in English's operation, which was called EE-Biz Ventures, were people who are elderly or sick. One of them wrote: "I need at the least a full refund of the $3,000 spent if you do not intend to pay anyone back. Remember, I have cancer and am unable to work for the next six months." [*The New York Times*, 3 Jul 2001, http://partners.nytimes.com/2001/07/03/business/03PONZ.html; NewsScan Daily, 3 July 2001] ["NewsScan" via risks-digest Volume 21, Issue 51] 0:00 # G!