Ponzi Scheme in Franklin County Lands Man in Jail
A Ponzi, or pyramid, scheme launched about two years ago by a bankrupt Tri-City businessman has landed him in jail, facing charges in Franklin and Benton Counties. It also has his partner in hot water and facing arrest.
The man's wife has not been charged, but was allegedly part of a check kiting scheme through her former employer, HAPO Credit Union.
28-year-old Gabriel Ramos declared Chapter 13 bankruptcy just over two years ago with his tech firm known as SocialWebNet. He then created a new company along with a partner, real estate agent Miguel A. Miranda Jr., who was one of his first investors. The company was known as G/M Business Investments.
Ponzi or pyramid schemes promise fast, lucrative returns on investments by using money from new investors to pay the initial investors, and using the "success" of those first people to find new investors to perpetuate the scheme. If you have five investors who put up $10,000 each, you would get five more investors, then use their money to pay the first five, and so on. But because there aren't any real returns from the investments (which often do not exist) you have to keep getting new investors, whose money is used to pay those further up the line. Sooner or later, these schemes collapse.
Ramos ran out of money to satisfy investors and he resorted to a check kiting scheme through HAPO that was engineered by Ramos' wife. He was writing checks to pay investors even through he did not have the funds to cover them. She is no longer with the company, and she has not been criminally charged in this current incident.
Ramos and Miranda Jr. are facing multiple counts of fraud and other charges in both Benton and Franklin counties. Ramos is in jail in Pasco, Miranda Jr., who previously worked for Coldwell Banker, is expected to turn himself in to authorities soon.