We hear about it all the time–scams aimed at swindling money from innocent people. Especially targeted are the elderly, who may not be (though this is certainly changing) as familiar with technology, making them easier to take advantage of. This is happening across the country–no city, large or small, is immune to this troubling behavior. John J. Packard, of Long Beach is accused of this type of conniving behavior. He’s the co-founder of a failed apartment investment firm and will be pleading guilty to federal fraud charges.  The US Attorney’s Office claims that hundreds of investors, mostly elderly, were scammed out of nearly $91 million by Packard and Pacific Property Assets–a Ponzi scheme. What exactly is a Ponzi scheme? While you’ve probably heard the term, you might not know much about a Ponzi scheme, except that it’s generally a bad idea to get involved in one and something worth staying far away from. You’re not wrong–but there is a little more to it than that. A Ponzi scheme is an investment operation in which an individual or organization pays returns to investors fraudulently by using new capital paid to the company by other new investors instead of paying from profit earned by the company. So why would anyone become involved with such a company? It all comes down to money. Companies operating Ponzi schemes offer higher returns than can be found with other companies or types of investments. Jason Hartman often says that if it sounds too good to be true, it probably is–wise investment advice, no matter your industry. The charges Victims have been notified that he will plead guilty to charges, though the case prosecutor declined to comment, maintaining that the documents relevant to the hearing were all under seal. There are no details about whether or not Packard will get a plea deal should he testify as a witness against former Pacific Property Assets CEO Michael Stewart, who has relocated to Arizona. Federal courts have charged the pair with 16 counts of fraud, including mail, bank, and bankruptcy fraud. Initially following their February arrests, both pleaded not guilty. Now, they’re set to go to trial on April 14, and Steward could be sentenced to up to 320 years in prison. A timeline Packard and Steward created their business in the late 90s to requisition investments to purchase, refurbish, and operate apartment buildings in Long Beach, Riverside, and Phoenix. But in spring of 2009, the firm essentially collapsed in on itself, taking with it the money of around 700 investors. The losses, which include mortgages on Pacific Property Assets buildings, amount to nearly $115 million. Pacific Property Assets solicited new investments for something they called an “Opportunity Fund”, which promised to pay up to 30 percent interest before the default in May of 2009. Steward and Packard, the ever dynamic duo, looked for new investors even after the company went bankrupt, which did not sit kindly with investors. The firm is said to have been in financial struggle since 2005, though they claimed to have been making a profit. It is thought that both Steward and Packard were using the money of their investors to pay the interest payments of existing investors–until the money ran out. Of course, they also managed to, with company funds, purchase an interest in a Newport Beach yacht and pay themselves a casual $750,000 per year. Attorneys also accuse the duo of spending additional millions on a variety of things. How to avoid schemers and scams Making any sort of investment can be scary given the prevalence of wrongdoing in the industry, but investments should be exciting! Knowing how to protect yourself against companies that are looking to take advantage of you is crucial in this situation. The key to investing is in understanding a few quick commandments, brought to you by real es