Perhaps because I haven never been caught up in one, I always sort of enjoy reading about Ponzi schemes. (Extra points, I suspect, because the eponymous ur Ponzi scheme was launched in Boston.)
The latest Ponzi to get its name in lights – where no self-protecting Ponzi wants to find itself; schemers really don’t want attention, sunlight being the best disinfectant and all that – is one that revolves around buying and reselling tickets to hard-to-get-tickets-for events. Like Hamilton.
The Feds have charged Joseph Meli and Matthew Harriton with conning dozens of investors out of $81 million, of which $51 million went to keep the scheme afloat (and, of course, to make themselves rich. After all, why bother to run a Ponzi scheme if you don’t at least have a reasonable chance of making yourself Madoff-rich.)
The men allegedly promised investors in writing that they would receive their principal back, plus a 10 percent annualized return, within less than a year. Investors also were promised 50 percent of any leftover profits from the ticket resales. (Source: Boston Globe)
Wouldn’t we all like a 10% annualized return on our investments? Plus “50 percent of any leftover profits.” Whatever that means. Seriously, what might “leftover profits” be from a Ponzi scheme in which the principals are fleecing the investors?
One of the tricks for their trade was telling at least one investor that they:
…had an agreement with the producer of Hamilton to purchase 35,000 tickets, and that the investor’s money would be used to pay part of the cost of obtaining the tickets, the SEC alleged.
Surprisingly, there was no such agreement. Nor was there any agreement to get Adele concert tickets, which was where another investor thought their money was going.
Hello? It’s me????
Tickets are on my mind lately, especially given that Saturday was Red Sox single-game-ticket-palooza. And I had to get my games in. Fortunately, even though the Sox weren’t half-bad last year, it wasn’t all that hard to pick up a few games – including a pair for my favorite game of the year: Patriots Day, when the Sox start play at 11:05 a.m., and where the Marathon runners stream nearby. Sure, it’s a PITA to get to Fenway and back, given the kabillion runners and spectators, but it’s such the supremely echt Boston day…
So I’m good for the season.
I’ve also gotten tickets for a couple of upcoming Irish music shows, but these weren’t so wildly popular that there’ll be secondary markets. Seriously, what will demand be to see young Emmet Cahill, a sweet-voiced young Irish tenor, who’s performing at the Irish Cultural Center in Worcester? While Irish Cultural Center sounds high-falutin enough, I believe it’s just a function room off of an Irish pubby restaurant, in a fairly dreary and rundown part of Worcester – hard to imagine there is such a thing, eh? – just opposition St. John’s, the original R.C. church in the Heart of the Commonwealth.
And then there were tickets for the second round of the Mary Black farewell tour, during which she’ll appear in Beverly, Massachusetts. I am a Mary Black fan from way-back, have seen her in concert a couple of times, and listen to her CDs (I’m old school; not vinyl old school, but old school enough) regularly. But I doubt that tickets to her July concert will get bid up to Adele prices.
Not that I don’t occasionally get tickets for a Really Big Show.
Last year, my extravaganzas were Bruce at the Boston Garden, and one of Big Papi David Ortiz’ last games at Fenway. Both of those, I believe, could have been sold for a profit. And, thus, could conceivably have made there way into the ticket Ponzi scheme, along with Hamilton and Adele.
Anyway, getting back to the Ponzi, as tends to happen in such a scheme, a lot of the money from the second wave investors went to make the original investors happy. As for the “leftover profits”?
Well, Harriton cashed out $1.2 million, and:
Meli and Harriton have spent almost $2 million to buy jewelry, to pay private school and camp tuitions, and to make payments to casinos, according to the complaint.
Well, while jewelry can vary, of course, from bibelots from Claire’s to Melania Trump for QVC to the real deal from Harry Winston. But private school and camp tuitions don’t come cheap. And, of course, anyone who’s willing to gamble their reputation and freedom by setting up a Ponzi scheme is going to want to lay out the Hamiltons, or, more likely, the Benjamins, at the casinos.
What’s wrong with the a-holes who set up Ponzi schemes? If I got the right person on LinkedIn, one of these guys has an MBA from Duke. Shouldn’t he be able to make an honest buck?
As for those who get sucked in…In truth, a guaranteed 10% return is good, it’s not as insane as the usual “double or nothing” Ponzi scheme promise. So the folks who got chumped weren’t crazy greedy. Still, the125 investors poured in $81M, of about $65K each – probably because of the allure of a marquee name like Hamilton – were willing to get involved in ticket scalping. And that’s never a sure winner.
Me, I’ll settle for the safer bet that I’m going to enjoy Mary Black.