Yes, it’s true, we called “Ponzi” on the early Schrenker news mostly tongue-in-cheek, but there were hints and now… the signs are all there.
Consider:
1. Targeted a specific group and demographic with existing trust structures (pilots):
“It was all word of mouth, and when you’re a pilot, you trust. That’s what you do and what you’re used to doing,” said Joe Mazzone, 57, of Auburn, Alabama. “His modus operandi is, he flies into your city dressed up in a $1,000 suit and sits down with you, buys you lunch, and the next thing you know, he has you on his side, and you move your money to his Heritage Wealth Management.”
[Note: Heritage Wealth Management, Inc., Schrenker's firm should not be confused with Heritage Wealth Management, LLC, the apparently unconnected San Diego firm]
2. Highlighted charisma over facts:
“This guy was the most charming guy you’ll ever meet,” said Kinney, who allowed Schrenker to manage his money starting about 2003. Kinney then encouraged his parents to invest about $2 million with Schrenker.
“This guy was family to me,” Kinney told CNN. “He’s a fantastic nice guy. He’s well-spoken. His customer service was impeccable. You call the guy on the phone, you would get him.
3. Was vague about strategies and provided limited methodology descriptions:
“He told my parents that they were investing in various insurance products, but they didn’t really know what that meant. I didn’t really know, either. We trusted him,” Kinney continued. “He said this is a safe place to put money, to avoid all the world’s dangers like terrorism and impending doom and gloom associated with it.
4. Used unusual fee structures:
Both pilots say Schrenker gave them vague explanations about where their money was invested. Kinney and Mazzone said Schrenker assured them that he was not making commissions on their investments and that the pilots and their families would receive only one statement each year showing returns.
The signs are all there.
Warrant issued for missing pilot [CNN]
in the span of 6 months, stories like this will become so common that they will no longer be stories.
Ponzariffic!
One statement each year!?!?!? Even Bernie would scoff at the kid’s laziness.
Enough of this douche already. You get the consolation prize in the “Best Reporting of a Ponzi Scheme” category for your untiring efforts EP. Now let’s move on, shall we?
Evidently few in Alabama wear $1000 [sic] suits.
Not too Ponzi, didn’t scheme enough
Paco Ahlgren this predicted this.
And Thomas Kinkade did the illustrations.
“A fool and his money are soon parted”…
Maybe this economic recession will teach people a hard lesson in financial planning and money management. Do the research people. I don’t care who you may consider “family” or a close friend, your indolence can prove to be your detriment…
- 3/10ths of a Millionaire
Never trust someone in a cheap suit.
TL, DR guy is on fire. Great work as usual.
SPODE
10 = TL, DR guy
Yes, always entrust your money with someone who’ll keep it safe from terrorism.
Too JO, didn’t C
4. Used unusual fee structures:
So hedge funds that charged 2% annually, kept 20% of the proftis (ah, remember the salad days….) and can lock out withdrawls is a normal fee structure?
Let’s be honest. We be all gots reel stoopid in da last few years. (spelling errors be on porpise)
Hedge funds must die!
He was apparently waiving fees for select customers. (Sound familiar?)
I think DB should expose ARS and CG in a “Breaking Financial Information Ponzi Scheme”
Where was the SEC? Too overburdened by Madoff?
@14
Silence commoner!
You probably work in retail aka “trolls under bridges…”
Let’s see:
- targeted group with internal trust structures
- sale is charisma over fact
- vague strategy and methods
- unusual fee structure.
And these are signs of a strategy that funds dividends from capital deposits, rather than sustainable economic returns?
Hmm . . . isn’t there some public figure of recent prominence that rings these bells? Thinkthinkthink . . .
Well hell. Don’t pilots do a “walk around” and inspect a new/unfamiliar aircraft before they “trust” themselves to pilot it?
But no such walk around on this, huh? And because of their laziness…all they get is a reach around.
-BeckyBootFan
@19 I got it! Obama!
Why stage the plane crash?
Mexico isn’t the most difficult country to enter from the U.S. Granted, he was under some heat before staging the crash.But if was able to fly a plane he was surely able to head south in a safer mode of transportation.
Was the goal to fake his death or to create a distraction? If he meant to stage a believable fatal air crash, was the bike in Alabama just a contingency plan? If he meant to actually fake his death, is jumping out of a plan the best way to do that?
Well hell. Don’t pilots do a “walk around” and inspect a new/unfamiliar aircraft before they “trust” themselves to pilot it?
But no such walk around on this, huh? And because of their laziness…all they get is a reach around.
-BeckyBootFan
@22
I still maintain he’s either 1)batsh!t insane, and/or 2) setting up a fantastic insanity plea
#19/21 – (assuming you’re the same guy) Hilarious. Best comment of the week.
22 As reported yesterday, his plan was probably to have the plane run out of fuel and crash into the Gulf of Mexico, which would explain no body being recovered and presumably allow him to go wherever he wanted on the bike. He forgot to close the door though before jumping so the plane never made it to the water. Hence, rather than presumed dead, he’s a fugitive.
I don’t think this guy was sophisticated enough to do a Ponzi. I believe he was just flat-out taking money, or skimming. One of the lawsuits said he charged a fee for annuities (this is the insurance company lawsuit) for accounts that closed a very short period of time later, or that did not open after an initial trial period, and refused to pay it back (that was a $500K judgement right there).
it’s more like: too dumb, didn’t Ponzi (which would fit in with: too dumb, didn’t fake death)
25 I was thinking more Palin. Imagine if she was in charge now? Talk about in over your head and no intelligence to fall back on.
Someone please explain how the “unusual fee structure” relates to Obama. The other ones do fit nicely though.
@25, 21 here, and i am not 19. I am right, though.
@28
Let’s see, humor as knee-jerk and predictable as your politics . . . You’re Jon Stewart!
Shouldn’t you be taping right about now? Or are you just mailing in the show until Obama gets kicked out of office?
31 Bet you’re one of those that says “He kept us safe…”. True, but only if you start the clock on 9/12/01. Plus, where has it been demonstrated that Palin has any brains? Nuf said.
#29 – He scammed hundreds of millions of dollars from trusting liberals (is there any other kind?). He solicited $5, $10, $15 at a time, online, by making vague promises about Change & Hope, didn’t he?
The more money he raised, the more he was perceived as the frontrunner, despite lack of experience, lack of accomplishments, and shady entanglements with Chicago corruption.
The bad news is that we all got f*’d. Now we’re stuck with the second coming of Jimmy Carter.
@29
Ever thought about how politicians _really_ get paid? It’s neither official salary nor bribes. K Street is one widespread model, but there are others — none of them “usual” or transparent.
@33 you’re an idiot, now get back to your back office job.
34 I think politicians get “paid” with power. Kissinger said it: power is the ultimate aphrodesiac (sp?). Different from you and me who measure success by the amount of cash coming in. They like the status, authority, get a thrill from being a leader. When they leave office, maybe milk K street a bit to keep up the good life, but in the interim the power is enough.
@26
So he jumps from the plan and presumably lands in some kind of swamp or river in Alabama. By the time he runs into the police officer at ~2am he has no reason to think that his plane did not make it to the gulf. So far, so good. But why give the cop that stopped him on the street his id? That’s a major botch, right?
@37 Uh-Uh, in that situation you have to give up your real ID. If you give a false ID and it raises a red flag then you’re screwed.
Don’t anybody get pissed here but the real move would have been to “silence” the policeman before he reported anything…country road like that he could have been long gone before anybody noticed…
- targeted group with internal trust structures:
Jesus wants you to vote for me.
- sale is charisma over fact:
My opponents missunderestimate me
- vague strategy and methods:
See every whitehouse decsion from 2000 – 2008
- unusual fee structure:
War + zero real rates = 150 oil = profits for texas and for georgie, all for the low, low price of 1.2T for ’09
his wife was heritage’s cfo… another family job
#39, you won the election so you could take people’s _money_, not their _jokes_.
The former you can disguise as “stimulus”, the latter is just obvious.
EP, this was probably NOT a Ponzi scheme (see @27). In fact, my guess is that most of the $$$ is still there and he was just trying to elude the civil judgment. Guys like this are endemic to the Midwest. Their modus operandi is as follows:
1.) Set up a fund, get management fees.
2.) With captive cash in fund, buy annuities for clients. Earn commissions.
3.) When you need more cash, close out an annuity. The client pays the early termination fee.
4.) Goto 2.
The portfolio of the unsophisticated investor then appears fluctuate (gaining from the annuity income, losing value due to the penalties). Thus, the scam artists sets up an artificial volatility that is really based on him recapturing a large percentage of the client’s artificially induced loses via commissions.
@27 and @42
Quite plausible what you are saying.
And every village has at least one of these characters. They are consummate con men.
Douchebag politics. All sticker, no bumper. STFU and get back to your Excel sheets.