Ron McCabe, “Betrayed” (Telemachus Press, 2012)

As a journalist and author I usually work in factual financial news and analysis. Recently however, I have noticed an apparent increase in books that wrap the real financial tumult of our times into a fictional novel, thereby allowing the author to make a personal statement, blend characters and events and mix real truth with fiction.

Before the Barnard Madoff scandal many individuals may not have completely understood the meaning of ponzi. Simply put, in a ponzi scheme a fraud artist creates an illusion of a successful investment and pays returns to investors by using money from subsequent investors, rather than genuine profit actually earned by the investment. The scheme entices new investors with promises of unrealistic returns and needs constant inflows of new funds to keep the fraud in operation.

Charles Ponzi became famous – or infamous — for using the scheme in the 1920’s the technique is actually centuries old. At some point, as with Bernard Madoff the scheme collapses and badly burns many of its investors.

Most often, the victims of a ponzi scheme either swallow their losses or do what they can to regain some of their money through the courts. Ron McCabe took a different approach and wrote a novel entitled Betrayed focussing on the aftermath of the collapse of a ponzi scheme.

Ron McCabe and his wife lost about $1 million in a scheme that supposedly paid investors from the profits of real estate projects in Arizona. In actual fact, investors’ returns – such as they were – came from money flowing in from new investors – the classical ponzi strategy. Overall this particular ponzi scheme took in about 700 investors.

The McCabes lost their million dollars and at the age of 65 Ron McCabe felt it was too late to start anew business to make money so he wrote Betrayed (Telemachus Press, 2012), which focuses on the losses of Wally and Poppy Stroud in a ponzi scheme. As a result, Poppy Stroud commits suicide and Wally sets out to get revenge.

To research the book McCabe talked to about 200 of the 700 investors in the same scheme and created a cast of fictionalized fraud artists and their victims. I will be talking to him form his home in Mexico about his book and I’ll ask him why there seems to be an increase of books that take financial traumas and wrap them into novels.

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