5 Signs Your Surefire Hedge Fund Investment Is A Ponzi Scheme

Jan 2 2015 | 6:25am ET

2. Overly consistent returns.

Allen Stanford, who is now serving 110-year sentence for running a Ponzi scheme, was busted after authorities began questioning the consistently higher-than-market returns of his Stanford Financial Group.

Barron's magazine sounded an alert about Madoff in 2001, in an article noting the improbability of Madoff's steady 15% annual returns.

Glen Galemmo, who ran the largest Ponzi scheme in Ohio history, promised above-average returns through investments in undervalued stocks. His Queen City Investment Fund claimed to have produced consistently above-average returns—including a return of nearly 20% in 2008 when the S&P 500 plunged 38.49%.

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