Tough Economy Bares a Slew of 'Mini-Madoffs'

Investors increasingly are becoming wary
By Jim O'Neill,  Newser User
Posted Jan 28, 2009 7:18 AM CST

(Newser) – Cash-strapped investors looking for redemption from investment funds are turning up surprises in the form of “mini-Madoffs,” Ponzi schemes that—while dwarfed by the alleged $50 billion fraud perpetrated by Bernie Madoff—nevertheless have taken victims for millions, reports the New York Times. At least six frauds with multimillion-dollar price tags have been reported in January, reports the Wall Street Journal.

Some of the schemes are long-running, says the Times; what's causing them to appear now is the combination of a swooning economy and sudden skepticism about too-good-to-be-true returns, prompted by the Madoff debacle.