Welcome to the July 2009 edition of the GM5, where GantDaily reviews the top stories of the month as read by you, our faithful readers.
Enjoy!
How do Ponzi Schemes Work?
Imagine the shock, the horror, and the sheer panic that would come with learning that the financial plan you’d sunk your life savings into was a sham, the financial experts you trusted were crooks, and all your money was gone.
Thousands of investors experienced that nightmare scenario in December 2008, when Bernard “Bernie” Madoff, CEO of the prominent Wall Street firm Bernard L. Madoff Investment Securities LLC, confessed that the asset management arm of his firm was “a total lie,” as he put it. An estimated $65 billion of investors’ money was vaporized in the financial fraud that experts call a Ponzi scheme. But how does such a scheme work, and how did Madoff trick so many people?
The Ponzi premise is simple, says Ed Ketz, an associate professor of accounting at Penn State. Ponzi victims—typically those without in-depth knowledge of financial jargon—are lured by the promise of fantastic returns on their money. Impressive-sounding terms such as “hedge futures trading,” “high-yield investment programs,” and “offshore investment” are bandied about, but in reality, the dividends paid to investors don’t come from prudent analysis of the markets. Instead, Ponzi payouts come from the cash deposited by other investors. “It’s a charade to get new investments to feed the previous investors and further enrich the person carrying out the scam,” says Ketz.
For that story, click here.
Juveniles Seriously Injured in Weekend Accident
GULICH TOWNSHIP – A juvenile was taken for medical treatment following an ATV/SUV accident at the intersection of state Routes 2001 and 253 on Sunday.
According to state police in Clearfield, a juvenile was driving an ATV east on SR 2001 and ran the stop sign at the intersections of SR 2001 and SR 253. Police stated that a Ford Bronco driven by an 18-year-old Houtzdale resident was traveling north, also ran a stop sign and struck the ATV.
Two juveniles on the ATV suffered serious injuries and were taken to the Children’s Hospital in Pittsburgh for treatment. Neither was wearing a helmet.
Click here for that story.
Car/Street Sweeper Accident on Clearfield-Curwensville Highway
CLEARFIELD – Emergency responders were called out for a motor-vehicle accident along the Clearfield-Curwensville Highway near Scalehouse Road on Tuesday.
The accident involved a car and a street sweeper.
Walker’s Lawsuit Against DA Dismissed
CLEAFIELD – The federal lawsuit by a former Fifth Congressional District candidate against the Clearfield County District Attorney has been dismissed.
Derek A. Walker filed a civil suit against Clearfield County District Attorney William A. Shaw Jr. in March 2009.
In May 2008 Walker pleaded guilty to disorderly conduct, invasion of privacy, harassment and defiant trespass. He was fined $399 and placed on one year of supervised probation. Prior to pleading guilty Walker released a statement stating that the charges were false.
According to court documents, the criminal complaint was filed on April 17, 2008. The Primary Election occurred on April 22.
For that story, click here.
Hyde Man Suffers Major Injury, Airlifted to Altoona
PIKE TOWNSHIP – A 77-year-old Hyde man was airlifted to the Altoona Hospital after suffering “major injury,” when he lost control of his scooter Monday in Pike Township, the Clearfield State Police reported.
According to the report, Regis W. Veihdeffer, 77 of Hyde, was traveling east on Carrs Hill Road, when his scooter – a Wildfire WFH-150-S – left the roadway via the south shoulder. He then lost control of the scooter, which fell over on its left side.
Police indicated that Veihdeffer struck his head on the roadway as a result.
