An American Lion

Yet another Ponzi scheme, yet another sordid tale of excess, greed, incompetence, and whatever else you want to throw in there:

A once high-flying attorney who courted politicians and celebrities was arrested Tuesday on federal racketeering and fraud charges alleging he operated a $1 billion investment scheme involving phony legal settlements.

Lawyer Scott Rothstein was led into the Miami FBI office in handcuffs following his early morning arrest on five charges, including a violation of the Racketeer Influenced and Corrupt Organizations, or RICO law, often used against the Mafia and other criminal organizations.

Rothstein was also charged with wire fraud, money laundering, and mail and wire fraud conspiracy. The combined maximum prison term for convictions on all counts is 100 years, according to court documents.

A few hours after his arrest, Rothstein pleaded not guilty in federal court even though the information charging document - rather than an indictment - used by prosecutors typically means a defendant has agreed to eventually plead guilty.

I’m beginning to think Americans are too dumb not to fall for the next Ponzi scheme. I’m beginning to think that amateurism has taken hold, and that no one knows how to spot a Ponzi scheme.

Here’s how you spot a Ponzi scheme:

If someone asks you to invest your money, and no one can give you credible evidence of where your money is going, but you get paid far more than you would if you had invested your money with someone who can tell you where your money is going, you’re involved in a Ponzi scheme.

I’m also beginning to think we should just ignore the pleadings of the so-called victims. If you’re stupid enough to fall for a Ponzi scheme, you’ll fall for just about anything. This is what I like to call financial Darwinism.