Rolex Series driver behind Ponzi scheme that bilked fellow drivers out of $5.4M?
Henri Zogaib (pictured, right) raced for and helped support the Samax Motorsport team that raced in the Rolex Series. The support came in the form of cash and good living that supposedly came from investing in iron ore, but apparently the monies actually came from a Ponzi scheme. And as the Orlando Sentinel tells it, the fraud has unravelled, leaving fellow Series drivers like Ryan Dalziel (pictured left), J. C. France, and Eddy Hennessy among those out hundreds of thousands of dollars.
Zogaib's lure was the 38.4% return-on-investment he promised because he had a special relationship with someone at ArcelorMittal, the largest steel company in the world. His accomplice in the scheme was Paul Bellanca, a Krispy Kreme franchise owner in Florida. But after taking more than $5.4 million from investors – including $800,000 from the owner of the Samax team, Peter Baron – the authorities finally caught up and shut Zograib down.
It's easy to say these people should have known better, or at least done their homework, but Ponzi schemes still work because some people actually do make huge returns based on connections and associates. Although no arrests have been made, the Florida Department of Law Enforcement has served warrants and seized Zograib's accounts while it tries to unravel what happened. That's little consolation to drivers like Dalziel, who lost nearly half a million dollars, or Peter Baron, whose team had to shut down last year after Zograib missed payments.
[Source: Orlando Sentinel | Image: Brian Cleary/Samax Motorsport]
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Reader Comments (Page 1 of 1)
HotRodzNKustoms 9:45AM (7/27/2009)
Ponzi schemes are among the hardest investor traps to detect. Even if you have a Series 7 with an accounting degree and you ask for all the proper due diligence it is nearly impossible to know (Some of the due diligence can be faked). Business and investing are based on trust and good faith and when someone violates that trust it is bad for everyone.
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jrhmobile 10:47AM (7/27/2009)
Sorry, I call BS. Name me three legitimate private equity deals that offered that kind of return and actually delivered on it.
When someone tells you they've got an inside deal you can make money on, they're appealing to the larcenous streak in people looking to make quick money off a dirty deal. I have no compassion for these suckers when it turns out the dirty deal is at their expense.
dwightB 10:03AM (7/27/2009)
Ponzi is the new black.
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Kevin 2:27PM (7/27/2009)
henri's thumbs up is a self incrimination of his guilt.
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xmdfmk7x 3:15PM (7/27/2009)
38.4% ROI? You'd have to be an idiot to buy into that kind of BS without doing your homework. Anything promised over 15% is a red flag in my mind, and you should do some serious research before handing any money over.
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