Well, the answer is on the SEC website. Apparently it all started with Charles Ponzi who duped New England residents out of funds using international mail coupons. Believe it or not, this happened in 1921. He promised a 40% return and would use money from one investor to pay back others. That’s the concept of these frauds – you use money from one person to fund the next person’s return. When things are going up, it seems these guys can keep the scam floating but as soon as markets shift, the whole thing collapses.

That’s what happened in the Bernard Madoff situation and more of these schemes are popping up daily.

There’s a book you can read to learn more about good ole Ponzi (not to be confused with Fonzi of Happy Days fame.)

But the people I worry about are these people – www.ponzivineyards.com .  But then again, maybe it’s true that any PR is good PR.  In fact, they are probably benefiting from the name recognition and exposure for their wine. I am sure there are a ton of searches in which they now appear. 

We’ll have to get back to you on that one.

There is no better gift than a nice warm security blanket. But unlike our favorite Peanuts character, we need more than a blanket to get that warm, fuzzy feeling of security.  Now is the time to take a look at your processes to see where you might tighten up your procedures, review roles, or change passwords.

We’re fortunate to have our own Certified Fraud Examiner (aka Inspector Gadget), Sam Martin, on the job for us and our customers.  Sam recently shared his insights with attendees at the Wine Industry conference - these are some of the points he covered:

• Of all the types of fraud committed, the highest percentage of crimes experienced by small businesses were related to billing schemes.
• Businesses lose 6% of their revenue annually through fraud and abuse.
• The newest scheme for fraudsters is the practice of altering gift cards to make them look like credit cards.
• Automated system fraud can easily be prevented with the addition of a few simple controls – including having an owner open and review all bank statements.
• And this point is enough to get you hiding under that security blanket : Most occupational fraud is committed by first time offenders and 40% of the victims never recover. 

 NOTE: While conducting research for this article, I discovered an interesting cause called Project Linus which provides warm blankets for children in need. It lets volunteers apply their craft for good. Talk about a warm and fuzzy feeling.