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This is the way a certain type of investment fraud, which may or may not be structured as a pyramid scheme in the style that gets its name from Charles Ponzi, works these days.

It works like this:

1. Some glib hustler who puts on airs of financial genius, often using a business name similar to that of a prestigious institution, claims to have developed an investment strategy that infallably makes money --- "infallably" either by its very nature, or by the operator's claimed solid track record of success. These days a common approach to this is to claim that the scheme is based on the automated trading in different currencies, or FOREX, as it's usually abbreviated.

2. For a longer-lived and bigger scam, initial investors are paid unusually high returns, using the money from later investors. If that's done, it's a pyramid scheme. But sometimes there is no such pyramid structure, just a quick collection of as much money as possible, generally followed by the operator's disappearance.

3. When a scam elsewhere goes bust, the operator "piggybacks" onto it: she or he puts on airs of contritition and falsely represents to investors that the money was put in good faith into somebody else's fraudulent scheme, and that everything has been lost.

4. Meanwhile, the investors' money has been run through a money laundering shell game and is salted away, generally under someone else's name, generally in another jurisdiction. Panama, due to its banking and corporate secrecy laws, is a favored "other jurisdiction," even though our money laundering laws theoretically allow secrecy to be legally pierced in pursuit of the proceeds of these sorts of frauds.

There are many variations or permutations, and Panama has seen most of them.

One ongoing controversy here, about which prosecutors are dragging their feet because the claimed victims are foreigners, is about Canadian hustler Mary Sloane, who had been forced out of the legal profession in British Columbia for stealing her client's money, using misrepresentations and the endorsements of a certain element among the community to get local English-speaking expatriates to invest in a FOREX scheme, then alleging that the money that was invested had been innocently put into a US operation that turned out to be Ponzi scheme. However, US authorities that busted the Ponzi scheme in question have not identified any funds from investors in Panama having come into that operation. The canceled checks of persons defrauded here have had some interesting marks on them, but they don't show that they passed into the operation of the pyramid scam into which Mary Sloane claims they were put.

Now the media in Minnesota are reporting about the adventures of two men from Minnesota, investment advisor Trevor Cook and "Christian" talk show host Pat Kiley. Cook was the veteran salesman, while Kiley was the shill with a gullible right-wing audience willing to believe in all sorts of apocalyptic scenarios and improbable strategies to deal with them. Through a FOREX scheme called Oxford Global Partners and several related companies, Cook, Kiley and others associated with them falsely claimed 72 straight months of profits and an average of 10.5 percent annual return on investment. As authorities started to close in, they created a parallel business called the Oxford Group to carry on when the anticipated shutdown of Oxford Global Partners came.


When the inevitable investor lawsuits came to pass and courts began to demand information about where the money went, Cook and Kiley claimed that the funds were funneled through a Canadian company called Tanren Global Strategy and forwarded to a Swiss comany, Crown Forex SA. To add a further layer of confusion, there is another Swiss company, Crown Forex LLC, which was not registered to do business and whose ownership and control are mysterious. The Swiss authorities shut down Crown Forex SA earlier this year, but the court-appointed receivers have not been able identify any funds coming from Oxford Global Partners investors as having passed into or through that company.

The basic underlying method of operation in such "piggyback" frauds, then, is to steal an investor's money and when some notorious scam is identified somewhere in the world, to then falsely claim that this is where the stolen money went.

And where does the Minneapolis Star Tribune say that it is suspected that the money of Oxford Global Partners investors went? Why, into casino and condo investments in Panama City. The initial investor lawsuits alleged a fraud of somewhat more than $5 million, but that complaint didn't include everyone who was bilked. It seems that in excess of $40 million has disappeared in custody of Mr. Cook and Mr. Kiley.