Unraveling Ponzi Schemes Using Advanced Data Analytics

This article from Massachusetts Lawyer's Weekly was published on March 31st 2022. The entire publication is available at: https://masslawyersweekly.com/2022/03/31/unraveling-ponzi-schemes-using-advanced-data-analytics/

Many fraud experts believed that more Ponzi schemes would be discovered as a result of the COVID-19 recession but discoveries actually decreased between 2019 and 2020, both in number and investor funds lost. The reason is relatively simple: the COVID-19 recession lasted just two months compared to the 18 months of the Great Recession.

Learning from the Great Recession, governments worldwide implemented unprecedented fiscal and monetary policy in 2020 that dramatically reduced the duration of the COVID-19 recession. However, these policies may have had the unintended result of keeping some Ponzi schemes going that may not have survived a longer recession. In fact, the environment of low interest rates, massive government stimulus, and the rise of alternative investments is extremely beneficial to Ponzi schemes both old and new.

Fraud investigators should be ready for the next Ponzi scheme to be revealed and that includes being familiar with the latest data analytics technology that can help to unwind complex financial transactions and recover stolen funds. Successfully unraveling a Ponzi scheme and maximizing recovered funds requires leveraging data and analytics expertise and related tools that make it possible to accomplish what has been extremely difficult or impossible to do before.

Reprinted by EnVeritas Group with permission from Massachusetts Lawyers Weekly. www.enveritasgroup.com NE040422