You Can't Cheat an Honest Man: How Ponzi Schemes and Pyramid Frauds Work...And Why They're More Common Than Ever (Paperback)

~ James Walsh (Author)

Editorial Reviews

Product Description

A keen insider's guide to investment rip-offs, scams and conartists.

This book takes an investigative look at the reasons why Ponzi schemes and pyramid frauds are thriving everywhere. It closely examines why over 100,000 Americans are suckered into the schemes every year. Tips are offered to detect schemes and respond when they occur. The purpose of the book is to educated consumers and make them aware of how scams work.

Product Details

• Paperback: 354 pages
• Publisher: Silver Lake Publishing; 1st edition (1998)
• Language: English
• ISBN-10: 1563431696
• ISBN-13: 978-1563431692
• Product Dimensions: 8.9 x 5.9 x 1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (5 customer reviews)
• Amazon.com Sales Rank: #249,253 in Books (See Bestsellers in Books)

• This item is part of The Silver Lake Personal Security Collection Series.

Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

5.0 out of 5 stars Ponzi Schemes Are Still Alive & Kicking Today!, April 20, 2005

By	Norman Goldman "Editor of Bookpleasures.com" (Montreal) - See all my reviews (TOP 500 REVIEWER)    (REAL NAME)

In 1903 Charles Ponzi arrived in the USA with the aim of becoming as wealthy as Rockefeller. His modus operandi was based on the principle of robbing Peter to Pay Paul.

James Walsh, in his informative book, You Can`t Cheat An Honest Man: How Ponzi Schemes and Pyramid Frauds Work..and Why They`re More Common Than Ever, traces the origins of the Ponzi Scheme, and explores how and why the scheme works with its different modern day variations.

The first part of the book narrates how, after spending some time in prison for cheque forgery, Ponzi found a creative way to shaft people, that was even legal and possibly sound.
What Ponzi would do was to take advantage of the disparities in the foreign exchange rates pertaining to the postal currency of International Reply coupons. If these coupons could be purchased in countries where they were still hit hard by the after-effects of World War I, he could then redeem them for stamps or cash in the USA, where there value would be as much as 50% higher.
Presto! He was onto a brilliant scheme, however, he needed money to expand his enterprise.

In order to raise the needed cash, he promised investors that he would pay them high rates of interest with the profits from his scheme. As is the case today, people were gullible and greedy, and Ponzi had little difficulty in attracting huge sums of money.
However, Ponzi found it difficult to keep meeting his obligations of paying his investors.

He resorted to using fresh money to keep his original investors satisfied. And thus began the Ponzi Scheme, that is alive and well today with multiple variations on the original theme.

One such variation is the very popular pyramid sales scheme, where individuals are seduced to become part of a plan for the sale or distribution of goods, services or other property, and wherein they acquire the opportunity to receive monetary compensation, which has little to do with the volume or quantity of goods or services sold but rather on the number of additional persons that could be recruited to join the plan.

The author devotes considerable print to these schemes, as well as making reference to the abundance of jurisprudence that defines and outlaws these plans.

Anyone wishing to protect himself or herself, would do well in thoroughly reading the concluding chapter. It is here where we are given some very sound advice- to be wary of get rich schemes, watch out for deals that offer high yields, if you do not understand the investment, stay away from it, seek professional advice before investing in anything and check out who are the promoters.

Walsh has a sharp eye as to important details, and with his wide use of informative examples, readers receive a comprehensive understanding as to just how wide spread these fraudulent schemes are and how not to be seduced by them.

Norm Goldman, Editor Bookpleasures.com

8 of 8 people found the following review helpful:

4.0 out of 5 stars Interesting journey into the depths of stupidity, April 7, 2002

By	D. Buxman "A Seeker of Truth" (Pueblo, CO United States) - See all my reviews (TOP 500 REVIEWER)    (REAL NAME)

If you've ever wondered how pyramid schemes get started and how they unravel, this book makes an interesting read. You will be both amazed and appalled at the mass stupidity involved in getting these schemes off the ground. However, you might feel a little foolish yourself when the author points out that our very own Social Security System is a textbook Ponzi scheme.

11 of 12 people found the following review helpful:

5.0 out of 5 stars Ponzi Schemes everywhere..., August 11, 2002

By	"repeatonceagain" (Dexter, MI United States) - See all my reviews

This book explains ponzi scheme after ponzi scheme, in an interesting, informative way. The people who run these schemes (called "perps") use seemingly endless variations but it all comes down to the same thing: robbing peter to pay paul. The perp offers a guaranteed return on investment, usually an outrageous amount, usually in a short period of time. The explanation for why the perp can give this huge return is basically a varation on the same theme: he has an investment vehicle that will return him even bigger profits then what he's giving you but he needs your money to expand his operation.

Just a few problems with this. First of all, the activity that the perp claims to me making these huge profits from are usually just a cover to take people's money. If the perp actually does use the money for some kind of trade or investments, he typically looses in much of his trading or, even if he is good at it, he has too much money flowing in from the "investors" to keep up. The money just comes too fast even if he has good intentions so...

Here comes robbing peter to pay paul, in other words, paying early investors with later investors money. Its always doomed to fail because it is based on continual growth that cannot possibly be maintained. Ponzi scemes can still last for years however, depending on many factors. This book beautifully explains these things in example after example.

This book also talks about multi-level marketing and pyramid schemes in depth. Also, what should you do if you have been taken by a ponzi scheme? This book offers a number of chapters of advice.

One of the most important points this book makes is that the biggest ponzi scheme of them all is run by our own government. This is the politically untouchable program of Social Security!