ALBANY — A Dutchess County man is facing felony charges for allegedly defrauding trucking and insurance companies in a scheme federal prosecutors said was “virtually identical” to one that sent him to prison in 2012.
Michael McMahon, 69, pleaded not guilty Tuesday to three counts of mail fraud in connection with what federal prosecutors described as a five-year scheme involving fake claims for crashes that never occurred. The alleged scheme netted the Poughkeepsie resident an estimated $400,000 over five years, according to the U.S. Attorney’s Office for the Northern District of New York.
Prosecutors said McMahon would park a vehicle along roadsides and wait for tractor-trailers to drive past. He would then allegedly falsely say the trucks had sideswiped his vehicle, claiming mirrors or other parts were damaged and submitting fraudulent claims with photos to trucking companies and…
Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.