Ponzi schemes flourishing, say investigators - Wilson James Baston and Bryant Rodriguez Ponzi

Ponzi schemes flourishing, say investigators
BY ROBERT E. KESSLER | robert.kessler@newsday.com
8:42 PM EST, March 5, 2009
Bernard Madoff is almost a household name for the massive scam he's accused of masterminding. But Wilson James Baston? Bryant Rodriguez? Not so much.

Baston and Rodriguez are accused of being involved in two other recent Ponzi schemes in the metropolitan area that may have cost investors a total of more than $22 million, but they received little publicity.

The common nature of Ponzi schemes and the need to combat them was the point of a conference Thursday sponsored by the U.S. Postal Inspection Service in Manhattan.

Besides postal inspectors, participants included prosecutors from the Eastern District of New York and the office of New York State Attorney General Andrew Cuomo, as well as victims of some recent Ponzi schemes.

Participants agreed that given the ingenuity of confidence men and human desire for greater profits, Ponzi schemes will always be around.

Prosecutors say Madoff's alleged scheme involved stock investments. The focus of Baston's was real-estate properties that were about to be foreclosed upon, and Rodriguez's was the sale of appliances at vastly inflated markups, according to Postal Inspector Al Weissmann.

But the one thing the schemes had in common was unusually high returns, which should have sent up a caution flag to investors, officials said.

"You can't stop Ponzi schemes," said federal prosecutor Scott Klugman, but he and his colleagues can prevent them from being effective by alerting people to their dangers and vigorously prosecuting the perpetrators.

Baston was recently sentenced to 135 months in prison for cheating 200 victims of more than $22 million.

"I lost far more than I am willing to admit," said Anthony Massa, of Lloyd Harbor, one of Baston's victims. Massa, a computer consultant, said after getting burned by Baston, who was promising returns of up to 30 percent, he now looks cautiously at any investments. "It's a lesson," Massa said.

Rodriguez, whose attorney says he is innocent, was recently arrested and is awaiting trial. He promised investors returns of 30 percent every two weeks, and did pay off his initial investors at that rate, postal inspector Eleanor Berry said. Officials say he stole almost $1 million.

Elizabeth Block, an assistant New York State attorney general, said she knew Ponzi schemes would continue, despite their recent notoriety. Just the other day, Block said, someone called her, asking her opinion of an obviously fraudulent scheme that promised an 18 percent return.

"If you don't understand it, walk away," Block said. "If it involves some secret information, it just doesn't exist."