Ponzi schemes Regulators detect more scams than ever before

US federal regulators have warned of a "rampant Ponzimonium" as they disclosed they are investigating "hundreds" of possible scams in the aftermath of the $50 billion (Dh184 billion) fraud allegedly perpetrated by Bernard Madoff.

Bart Chilton, a commissioner at the Commodities Futures Trading Commission, the US regulator, said the watchdog was "seeing more of these scams than ever before" in commodities and other futures markets.

Chilton said the CFTC, which patrol commodities and financial futures markets was investigating "hundreds of individuals and entities, many of which were related to Ponzi scams".

The CFTC has filed charges against 15 alleged Ponzi schemes so far this year, compared with 13 for the whole of 2008, and could end the year filling more than 60 cases, officials said.

US regulators have said they are detecting more scams than before as the publicity surrounding Madoff's case prompts some investors to question the credibility of returns.

"The floundering economy has unearthed many of these house-of-card scams," said Chilton. "In the last month alone we've gone after crooks in Pennsylvania, New York, North Carolina, Iowa, Idaho, Texas and Hawaii."

It is likely the majority of the cases relate to small investments, in the range of a few million dollars to $50 million. In the latest case, the CFTC last week charged a North Carolina investment company over an alleged $40 million Ponzi scheme in foreign exchange trading.

"These frauds combined harmed tens of thousands of hard-working Americans, many of whom thought they were investing properly to save for retirement or even their first home," said Chilton.

"It is a good thing that folks are double-checking to ensure they aren't being ripped off by fraudsters," he said, referring to the increasing number of investors who are tipping off US federal regulators after they have become suspicious.

- Financial Times