Book Proposal: Bad Company

By Christopher Zoukis

There’s a small town in Ohio.  The town’s name is Dublin, after the famous city in Ireland.  Commonly described as ‘rustic,’ which is a quaint way of saying ‘countrified’ and ‘unsophisticated,’ Dublin – the one in Ohio, not the other one – is headquarters for Wendy’s International.  Most people have heard of the hamburger chain.  What they haven’t heard of is another big firm in the same city.

National Century Financial Services.  Started in 1991, this outfit soon became the nation’s largest purchaser of hospital, physician and other health care receivables.  It works like this.  NCFE buys the accounts receivable of small hospitals, medical clinics and nursing homes.  Because of their small sizes, all of these health-care providers are having money problems.  They are desperate.

National Century steps in, giving them cash to cover their expenses so they can stay in business.  The health-care providers win because they don’t have to wait for insurance companies to pay them.  They get most of their money now, and don’t have to mess with the frustrating job of dealing with stingy insurance companies.

National Century wins because they keep a fee or percentage of any money they collect from the insurance companies.  Then NCFE puts all the accounts they bought into a kitty and sells them in the form of asset-backed securities to huge institutional investors like money market funds, or retirement funds. 

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Proposal: Too Good To Be True: The greatest Ponzi schemes in history

By Christopher Zoukis

Chapter One:  a quick overview of what a Ponzi scheme is, along with a hypothetical example. 

Chapter Two:  what is and what is not a Ponzi scheme.  Pyramid schemes are not Ponzi schemes.  A bubble is not a Ponzie scheme.  Robbing Peter to pay Paul is not a Ponzi scheme.

Chapter Three:  520 Percent Miller.  William Miller opened for business in 1899, in the city of New York.  He called his company the Franklin Syndicate.  Miller was called “520 percent Miller” because he promised 10% interest per week on any money invested with his company.  He defrauded investors out of $1 million (in 1899 dollars).  After he was caught, Miller spent ten years in prison.

Chapter Four:  Between 1991 and 1994, a Romanian named Ioan Stoica ran a company called Caritas.  Caritas promised investors 800% interest on their investment.  A fantastic pledge, which was made even more fantastic by the promise that it would happen in six months.  No one thought it was too good to be true.  Over 400,000 people invested a total of $1 billion (US dollars).  When Caritas went under, it owed $450 million.  Stoica was given 7 years in prison for fraud.  But his gall knew no limits.  He appealed and the sentence was reduced to 2 years.  Then he appealed that sentence.  In the end, he received a sentence of 18 months in prison.  He pocketed $550 million.

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