What are the warning signs of a Ponzi scheme?

There are several warning signs of a Ponzi scheme in North Carolina. One warning sign is when returns on investments are promised to be abnormally high. Ponzi schemes often use unrealistic promises or guarantees of income to draw in victims. Another warning sign is that the promoter often offers commissions or incentives to anyone who refers a new investor. If you hear of an opportunity that uses this type of tactic, it could be a Ponzi scheme. Another warning sign of a Ponzi scheme is when victims have no access or control over how their money is invested. In many cases, promoters of these schemes use the victim’s money to pay back other investors, meaning the money is not being invested in any legitimate way. Additionally, promoters of a Ponzi scheme may provide false statements about the value of investments or claim that investors are earning returns from investments that do not actually exist. Finally, the red flags of a Ponzi scheme should be raised if the promoter tries to convince you to keep your investment a secret or encourages you not to ask questions. Investment fraud is illegal in North Carolina, and individuals or companies who commit such fraud can face criminal and civil charges. Thus, it is important to be aware of these warning signs to protect yourself against a Ponzi scheme.

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