A Ponzi scheme is a simple, reliable way to bring in a lot of money. Convince people to “invest” — that is, to give you their money — by promising them huge returns. Use that money to pay “dividends” to your earliest “investors” and people will line up to hand you even more of their money to “invest.” It works.
Until it doesn’t. At some point enough people will raise enough suspicion that the new money you’ll need to keep paying supposed dividends to older investors will stop coming in. So the trick to running a Ponzi scheme is knowing when to stop — knowing when you take your huge pile of money and skip town before you’re exposed as a fraud.
That’s what I never understood about the massive Ponzi scheme run by Bernie Madoff. He never seemed to have an exit strategy. I’m not a criminal, so I don’t know what that would actually have required, but from TV and movies I’d expect it should have been something involving fake passports, a bank account in the Caymans, and a one-way ticket to some country without an extradition treaty. Instead of anything like that, Madoff just kept living in the same Manhattan apartment, with his own name on the lease and on all the bank accounts. Up until the day the whole thing fell apart he seemed to imagine that he could somehow just keep it going forever.
I’ve been thinking about that a lot recently due to all of the other con-artists and grifters who’ve been enriching themselves for the past five years by aligning themselves with Donald Trump. What’s their exit strategy? What’s their plan for the next stage of their lives now that the Trump train has gone off the rails?
They don’t seem to have one. I’m thinking about people like Steve Strang — the white Christian-brand media mogul behind the shameless Charisma magazine. Or wanna-be respectable author turned hate-radio host Eric Metaxas. I get that they both wanted four more years of Trump in the hopes of fleecing the rubes for another four years, but smarter gamblers would have had some contingency plan in place in case that didn’t come about. And now that it’s not happening, their only move seems to be doubling down — wagering all of their remaining or future credibility on the legal acumen of Rudy Giuliani and letting it ride.
That’s not much of a plan. It’s like racing your getaway car down a cul-de-sac.
Or maybe like running your getaway boat into a lake.
That’s what Matthew Piercey did in one of my favorite stories from the week’s news: “Ponzi scheme suspect flees into frigid California lake using underwater ‘sea scooter.’”
Piercey had recently been indicted for running a big Ponzi scheme:
Prosecutors say that from about July 2015 through August, Piercey bilked investors into giving $35 million to his companies, Family Wealth Legacy and Zolla, promising guaranteed returns using an “Upvesting Fund” that allegedly was an algorithmic trading fund with a history of success.
Piercey attended Bethel Church and used his connections at the prominent Redding megachurch to prey on fellow parishioners, a law enforcement source said.
Piercey allegedly admitted privately to an associate that there was no Upvesting Fund, prosecutors said.
His victims’ lawyer says the scheme also involved “cryptocurrency mining.” Whatever that is, they weren’t doing that either. It was just a plain vanilla Ponzi scheme.
When the FBI showed up to arrest him, Piercey jumped into his pickup truck and tried to escape, but couldn’t elude the agents pursuing him. That’s when he arrived at Lake Shasta which, as the name suggests, is a lake — a contained body of water with no egress to the open seas. And then this happened:
“Piercey abandoned his truck near the edge of Lake Shasta, pulled something out of it, and swam into Lake Shasta,” federal prosecutors wrote in court documents calling Piercey a flight risk. “Piercey spent some time out of sight underwater where law enforcement could only see bubbles. He remained in the frigid water for approximately 25 minutes.”
When Piercey finally emerged from the lake, agents discovered he had grabbed the Yamaha scooter that allowed him to move around submerged.
Medics checked Piercey out and determined he didn’t need to be treated for hypothermia. Agents arrested him after he was allowed to put on some dry clothes the agents had gotten from Piercey’s wife.
Piercey’s genius plan of hiding in frigid water until the FBI gave up and went home was foiled by their cunning strategem of standing around for 25 minutes watching the bubbles and waiting for him to come back out. They used that time to call his wife to have her bring dry clothes, which was nice.
Piercey’s scam was run through something called “Family Wealth Legacy,” a fund that required a minimum $50,000 “investment” from its clients/victims. I’m not sure whether that means that lots of Piercey’s fellow worshippers at Bethel Church have that kind of money lying around or if it means he was targeting lots of people whose lives will be shattered by that kind of financial loss.
The report on Piercey’s full-immersion arrest includes this background info on that mega-church:
It’s not the first time members of Bethel Church, who believe in miracles including healing the sick and raising the dead, have been alleged victims of a Ponzi scheme.
In 2014, David Arnold Souza was sentenced in Shasta County Superior Court to 18 years in prison for stealing $650,000 from Bethel Church members in an investment scheme. Souza used the money for an $1,800-a-month rental Cadillac, more than $15,000 for dental work, meals, travel and a gym membership.
This is also the church that raised thousands of dollars in support of its ghoulishly publicity-seeking efforts to raise a child from the dead. And it’s a church where senior leaders falsely “prophesied” a guaranteed Trump re-election and are now falsely “prophesying” the End of Days if democracy is not overthrown. And it’s the home church of that guy who’s going around leading maskless, anti-socially distanced “worship protests” in support of mass contagion.
In other words, no, “it’s not the first time” that members of Bethel Church have been victims of con-artists. The whole thing is a con and very little else. Drag it into Lake Shasta on a cold day and wait for the bubbles to stop.