Thanh Viet Cao received a 30-year sentence in a San Diego Federal District Court after being found guilty of bilking investors out of more than 12 million dollars in a Ponzi scheme.
According to the U.S. Securities and Exchange Commission, "A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors." The money given to the schemer is not actually invested, and the only payments made to investors are those that come from money paid by new investors. Eventually, the new investments can not keep up with the amount to be paid out, and the scheme falls apart.
In Cao's case, he solicited investments for real estate and casino financing, among other things, and was found guilty of the crime of wire fraud. During the investigation into his behavior, Cao filed illegal liens against property belonging to the people who were investigating him, including investigators, agents, prosecutors and federal court judges.
Cao's nefarious behavior was considered by the court when determining the sentence. In addition to the false liens, Cao had also threatened his own investors and had previously been convicted of the extortion of his business partner. The sentencing judge also considered that the investors suffered financial ruin, and the fact that the judge believed Cao still possessed millions of dollars of the invested money. In fact, the judge indicated he would consider reducing the sentence if Cao would reveal to investigators the whereabouts of the between $5 and $6 million dollars that has yet to be located.
Instead of cooperating, Cao instead chose the lengthier sentence.
More and more often, convictions for white collar offenses, such as fraud, are receiving harsher sentences than previously imposed. While such crimes may have received sentences of less than ten years two decades ago, convictions today can land the orchestrator of a Ponzi scheme the type of sentence usually reserved for violent criminal offenders.
Bernard Madoff, perhaps the most famous of current-day Ponzi schemes, received 150 years for cheating investors out of billions. But other scheme organizers with less notoriety are also receiving severe sentences. Sentences of 20 years, 50 years and 100 years for fraud, money laundering and Ponzi schemes are not uncommon. A sentence of 845 years was also imposed for an insurance company scam that negatively impacted 25,000 investors.
District court judges are given great discretion under the Federal Sentencing Guidelines, and some judges may be imposing harsher sentences as a way to make examples out of wealthy individuals who abuse their authority by lying to investors.
