COLUMBUS - Although Bernard Madoff has been hogging the headlines, he's just one of the many con artists who have stolen millions of dollars from unsuspecting investors using a Ponzi scheme.
In fact, Ponzi schemes remained the No. 1 investment scam in Ohio for the second year, according to the Ohio Department of Commerce's Division of Securities.
About 1,600 Ohioans have been conned out of a total of $130.8 million in this type of scheme since 1999, data show.
One of the largest Ohio examples of a Ponzi scheme - in which early investors are paid with money from later investors - involved the Dillabaugh Group of Dayton. It sold $12.4 million in unlicensed securities to about 150 investors. A restraining order against the company was issued in June.
The next most common scams in the state are real-estate investment cons; financial-adviser fraud; affinity fraud, which targets members of a specific demographic; and oil and gas investment scams.
"I think the Madoff situation has done a lot to educate people about investment schemes and how they work," said Harvey McCleskey, who leads the division's enforcement section.
A Ponzi scheme promises high returns and uses money from new investors to pay off earlier investors. The scam eventually collapses - and most investors lose everything.
In 2008, 201 complaints were filed with the division, a 43 percent jump from the previous year.
The elderly are often the target of financial scams. Individuals aren't the only ones at risk.
Bowling Green State University officials say they invested $15 million with a New York firm that authorities say used clients' money as a piggy bank. Officials of Westridge Capital Management Inc. have been charged with securities fraud and related crimes.
Many victims fall for financial promises that sound too good to be true.
"They dangle these high rates of return and spectacular outcomes and people are tempted, especially if they've lost money [in the stock market] and are trying to recoup it," said Harry Trombitas, special agent with the FBI in Columbus. "Criminals will find ways to accommodate that."
Investors can take steps to avoid being conned, said Kelly Igoe, coordinator of outreach and education for the Division of Security.
Call the division's hot line, 1-800-788-1194, and ask whether a financial adviser and the products they sell are licensed by the state and whether enforcement action has been taken against them.