"Billionaire" Balks on University of Chicago Donations
Financier Steve Stovanovich liked to play the big man. Over the past few years, he has pledged multimillionaire donations to the University of Chicago and institute named on his behalf. But as a recent investigation by the Chicago Maroon has revealed, Stovanovich may not possess the vast wealth he says he has.
Things started to look shady when Stovanovich, who is fond of pledging millions to education institutions, failed to deliver on his promises. A member of the prestigious board of trustees of the University of Chicago, Stovanovich is now embroiled in litigation surrounding his involvement with a multibillion-dollar Ponzi Scheme, and the university has now agreed not to accept payment from their benefactor.
Stovanovich Lent Money to Billion-dollar Ponzi Scheme
According to reports, Stovanovich made almost $300 million dollars lending money to convicted Ponzi Schemer, Thomas Petters. While Stovanovich has thus far survived the Petters affiliation with at least some of his wealth intact, it appears to be nowhere near the several billion dollars he has publicly indicated. However, Stovanovich is still under investigation for his ties to Petters, and his former employees are now suing him for unpaid wages. Time will tell how much wealth Stovanovich actually possesses, and how much of it might have been accumulated through shady dealings.
Common Signs of a Ponzi Scheme
Once you're inside a Ponzi Scheme, it can look and feel a lot like a normal investment opportunity, especially if the scheme operator is adept at creating false investment documentation. The key is not to get draw into a Ponzi Scheme in the first place. The most common signs of these frauds are evident from the beginning - that's when you have the greatest chance of identifying them.
Inflated investment returns
Guaranteed investment returns
Tax-free investment returns
Vagueness about the actual investments
Overly simplified investment documentation - or none at all
Lack of true expertise or history in sophisticated investing