Business Bank on Staten Island Spotlights 7 Red Flags of a Ponzi Scheme



Victory State Bank is reminding consumers to beware of the ever-present threat of Ponzi schemes.

As explained by the U.S. Securities and Exchange Commission, a Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors.

Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.

With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.

Ponzi schemes are named after Charles Ponzi, who duped investors in the 1920s with a postage stamp speculation scheme.

To help you avoid becoming a victim of such scams, Victory State Bank is sharing the following Ponzi Scheme warning signs as described the U.S. Securities and Exchange Commission:


Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.


Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.


Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company’s management, products, services, and finances.


Federal and state securities laws require investment professionals and firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.


Avoid investments if you don’t understand them or can’t get complete information about them.


Account statement errors may be a sign that funds are not being invested as promised.


Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.




VSB Bancorp, Inc. (OTCQX: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island, including the main office in the community of Great Kills and branches in West Brighton, St. George, Dongan Hills and Rosebank.

A planned sixth branch, to be situated in Meiers Corners, has received both regulatory and building department approvals.

For additional information, Victory State Bank may be reached at 718-979-1100, or visited online at

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