DEAR BRUCE: My wife and I read your column every week, and we hope you can give us some words of wisdom. In 2008, we bought some silver. In 2010, we took out our original investment.
In 2011, our statements reported that our gain was doing very well, so we withdrew another $18,000 to pay off our car, credit cards and home equity. I am 85 years old and my wife is 83. We figured that was the smart thing to do and then there would be no money problem.
On July 30, 2013, I received a letter from a law firm stating that it has been appointed receiver to begin a process to compel that the money be returned. This was a Ponzi scheme.
I talked with the gentleman and informed him that I did not have the money because I used it as I explained above. He said he would be willing to reduce the amount 40 percent. I told him that my wife has an IRA worth about $30,000, but the $11,000 he would like to get would reduce that by one-third.
Is there anything that says I have to pay this as I didn’t know that this was a Ponzi scheme? — Melvin, via email
DEAR MELVIN: You are asking an extremely interesting question. The company has been accused of or has been determined to be a Ponzi scheme, and you were paid the returns that you cited improperly to encourage others to invest. Now efforts are being made to recapture that improper payment in order to reimburse people who have been swindled. Those are the facts. Whether or not you should have to pay this is a whole other matter.
Since the numbers seem high enough, I would urge you to seek legal representation. The offer to reduce the amount by 40 percent is interesting because it seems to demonstrate a weakness in the firm’s position. I think you may have been unwise explaining to the attorney that you had monies and part of that would be available.