Investment Whistleblower Becomes Most Surprising Ponzi Scheme Victim

Online, December 14, 2010 (Newswire.com) - When most people think about the victims of Ponzi schemes, they think about the investors that are fraudulently taken for thousands or even millions of dollars. But Ponzi scheme victims aren't always just the investors. Take entrepreneur and film producer Steve Quarles, a successful businessman with a prestigious business degree from San Diego State University and a wall full of awards and accolades. In the past decade, he has helped start several successful companies, fund Hollywood blockbusters and earn millions of dollars for investors. With such a great resume, it is hard to imagine Steve Quarles tangled up in a Ponzi scheme, let alone risking it all to spearhead the "Steven Quarles Ponzi scheme"- it's hard to imagine, because Steven Quarles himself never even knew he was involved.

The "Steve Quarles Ponzi scheme" is linked to the real Steven Quarles in name only. He was not a partner in the scheme, just an innocent investor and lender, yet his name was highlighted in the scheme - causing quite a bit of damage to his reputation. How does something like this happen to an unsuspecting producer and entrepreneur? To find out, we asked the man whose name has unfortunately fueled the "Steven Quarles Ponzi scheme" - Mr. Steven Quarles.

Take us back to the beginning. How did your name even become associated with a Ponzi scheme?
It was several years ago. I had founded an investment/lending company and I was always looking for great new tips. A close family member had recommended investing in a business opportunity. They believed it was a great investment and I took a look at it and agreed. I not only invested my own money, but I assisted in raising money and helped several clients invest as well. I had no reason to believe the investment was anything but legitimate.

How did you discover that the investment was a Ponzi scheme?
For three years, the investment appeared to work and everyone seemed happy. Then the Madoff story hit the news and I began to take a closer look at all the investments we had made at the company. It was then, when we started asking for more information, that we began to see the scheme unravel. We realized that the bank statements were faked and that many things didn't add up. I immediately contacted the authorities and worked with them to build a case against the scheme's organizer.

If you blew the whistle on the scheme, how did it become the "Steve Quarles Ponzi scheme"?
It is such a difficult series of events. The originator of the scheme confessed to running the scheme and clearly acknowledged during questioning that I, nor any other lenders or investors, had no knowledge of the fraud that he was perpetrating. But because I raised funds for the investment, which I never knew to be a fraud, my name became associated with the scheme. I have been fully investigated and have been charged with no crime, yet as the whistleblower on the scheme, I will unfortunately always be associated with it.

Have you taken legal action against the Ponzi scheme creator?
The originator of the scheme is facing criminal charges and I currently have a civil case against him. I want the world to know that the "Steven Quarles Ponzi scheme" does not exist and that I had no involvement in any fraudulent investing. I want my reputation back. I want people to know that I helped uncover this scheme and that I turned this man into the authorities as soon as I was aware of any wrongdoing.

What have you learned in this process and what would you tell investors to do to avoid being scammed?
This process has really taught me to be more due diligent about investments. No matter how well you know the people you are investing in or how great the family member is who gave you the tip, always monitor and track each and every transaction. Ask for and review all supporting documentation. Also be sure to personally call and verify all transactions. Fraudulent investments have devastating ramifications - not only have my clients, my friends and I lost millions of dollars in this scheme, I lost my name - a name I have spent years building for myself - and that is something no amount of money will restore.