The following are tips from Daniel Wardlaw, special agent and public information officer IRS Criminal Investigation to help avoid being victimized by a ponzi scheme:

• Discuss investment ideas with an unbiased third party such as an attorney; an accountant; or a licensed financial advisor
• The historical average stock market returns are around 8 to 12 percent a year.  Investments which claim to be able to exceed these amounts (for example 2 percent a month or 300 percent a year, etc.) should be viewed very skeptically.  If it sounds too good to be true, it probably is.
• Don’t trust someone with your money (whether for investment or for loan) just because you know them or because they have an impressive or “safe” sounding title
• Avoid secretive investments where you have difficulty in determining how they work or when you will get your money back
• Check out official websites such as for the SEC, the FBI or the Washington Attorney General’s Consumer Protection Division to see if the investment being offered has characteristics of a scam
• A good summary of ponzi schemes and other red flags can be found athttp://investor.gov/investing-basics/avoiding-fraud/types-fraud/ponzi-scheme