The South Florida hedge fund that enlisted investors, and placed their money in Scott Rothstein's Ponzi scheme, appears to have been extremely convincing in its presentation. Of course, none of it was true. One of its illustrative flow charts, which was used to demonstrate the "foolproof" nature of the labor and employment settlements backing the investments, appears above; It is quite convincing. If you cannot read the fine print, here's what the copy says:
(1) Settlement account executed.
(2) Settlement proceeds 100% invested into trust account.
(3) Assignment of settlement agreement to Banyon.
(4) Trustee acknowledges assignment of proceeds.
(5) Plaintiff receives funds from Banyon.
(6) Banyon receives funds from trust account per scheduled release.
The greedy investors in the hedge fund were told to expect 12-30% return on their money. No wonder they failed to perform even rudimentary due diligence on the fund. Even I, who lives in the next county, knew that the fund's principal had a long and sordid history of consumer complaints in the state.
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