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This particular type of fraud is named after Charles Ponzi, who duped thousands of US New England residents into investing in a postage stamp speculation scheme back in the 1920s. At a time when the annual interest rate for bank accounts was 5%, Ponzi promised investors that he could provide a 50% return in just 90 days. Ponzi initially bought a small number of international mail coupons in support of his scheme, but quickly switched to using incoming funds from new investors to pay purported returns to earlier investors.

Ponzi scheme fraudsters solicit new victims by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the scammers focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business. But with little or no legitimate earnings, Ponzi schemes require a consistent flow of money from new investors to continue. Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.


The Ponzi scammer contacts his potential victims and convinces them that he has a wonderful investment opportunity that offers a far greater return than the average investment, such as rock-solid bank or bond interest. In many cases, the returns promised by the scammer are in the order of over 30% interest or more, which should set off alarm bells in anybody who has the sort of money to invest in such ventures. The scammer will even produce fancy paperwork that he has fabricated to con the sucker into believing that the proposed investment is legitimate.

For a short while, the investor will receive that huge interest payment periodically and is encouraged by the scammer to tell all his friends about this fantastic moneymaking opportunity. The scammer ensures that the new flock of suckers also get paid that high rate of return for a while, but when no more suckers can be enrolled, the scheme can then be folded.

The basis of the Ponzi scam is ludicrously simple. The scammer does not invest the money he has received from the suckers into any sort of real investment or a legitimate earning strategy. He merely pays the suckers those high interest payments out of their own capital and the money given to him by new targets until he decides that no further people will put money into this bogus investment. At that point, he might inform the suckers that the alleged high interest investment has gone bad and has been liquidated, with no possibility of recovering the capital that was invested. The suckers lose all their money and the Ponzi scammer keeps everything he has collected from the suckers, less the relatively small amount of money that he paid them in alleged interest.

Some Ponzi scammers even have the gall to inform the suckers that the interest rates on their bogus investment have dried up because the alleged company is experiencing hard times and only an injection of further capital will enable it to return to that mythical high percentage interest payment regime. Thus the scammer often actually squeezes more money out of the suckers, who throw good money after bad in the hope that they can recover what they have already lost. The whole Ponzi scam relies on the greed and naivety of people, but of course most scams operate on this basis.


For decades, a highly respected solicitor by the name of John Gordon Bradfield had a legal practice in the suburb of Dural, an affluent semi-rural area of north-western Sydney. He latched onto a scheme to defraud his clients by offering high return investments in the form of interest on loans to a property developer who was allegedly building units and town houses at Hawks Nest and other areas of NSW.

The interest that Bradfield offered on these private loans were in the order of 10% to 15%, far above bank interest rates at the time, so it was tempting for Bradfield's clients to invest to let Bradfield allegedly lend the money to this builder and reap the high interest rates. Bradfield assured the investors that the loans were fully secured by Epitomes Of Mortgage and he issued these papers to his clients whenever the money that they invested was rolled over into ongoing loans to this builder. So his clients believed that their investments were secured by mortgages over property and they trusted Bradfield, who had performed their legal work for decades.

In fact there was no builder and the Epitomes of Mortgage were all phoney. The properties listed on them actually existed, but there were no mortgages taken over them as security and in many cases, the owners of the properties had no idea that their apartments and town houses were being used in Bradfield's scam.

Bradfield's Ponzi scam came to grief when I became aware that an elderly friend had put a substantial amount of money into these "loans" to a builder and when I saw those Epitomes of Mortgage, I smelled a rat. So I convinced my friend to demand the return of the principal loan amounts, the original money that he had invested when the period of the loan was ending. Bradfield did his best to try and convince my friend to roll over his funds into ongoing loans to this bogus builder, but after I insisted that Bradfield teminate the loan and refund the principal to my friend, Bradfield's Ponzi scam was exposed in all its glory.

I accessed the titles of those properties from the records at the Land Titles office. Once I discovered that none of the properties listed as security on those Epitomes had mortgages registered against them, I informed the police and the Law Society. Within a few days, police raided Bradfield's legal practice and he was barred from operating as a solicitor. Investigators and auditors discovered that Bradfield had scammed people whom he had known and dealt with on the basis of trust for over 40 years out of more than $30 million. Bradfield was charged with multiple counts of fraud.

I tried very hard to have Bradfield prosecuted and jailed, but after some years of court appearances where Bradfield presented himself as a frail elderly man, the judge took pity on him and did not dispatch him to prison. This was most unfortunate, as I would say that the judge was Bradfield's final victim, having been conned into letting this scheming bastard off the hook after he ruined so many lives. Bradfield should have been locked up and forced to die in jail for the massive grief he caused to so many people who lost their funds and wound up penniless after lifetimes of work and saving for their retirements.

But I was determined to try and recover some money for my elderly friend. I had some legal expertise under my belt, so I immediately lodged a claim with the Law Society Fidelity Fund, an insurance scheme for lawyers. After much wrangling and threatening to sue the Law Society in the Supreme Court, I recovered almost all of the funds that Bradfield had conned from my friend - a very substantial six-figure amount - and it allowed my elderly friend to move into a very luxurious aged care facility until he passed away. Unfortunately, many of Bradfield's other victims, mostly elderly retirees, did not recover any of the money they lost to this Ponzi scam.


The John Bradfield scam and other Ponzi scams prove one thing, that the scammers rely on presenting a fa├žade of trust and respectability. Their scam relies on them looking prosperous and having the trappings of success. They are not the stereotyped criminals and thugs one sees on TV shows, with ugly unshaven faces and close-set eyes. No successful Ponzi scammer looks like Fagin from "Oliver Twist". Ponzi scammers such as Bradfield look like respectable bankers, financial advisors and lawyers, which they often are and this is why people are lulled into a false sense of security and hand over money to them to invest without ever checking to see if those investments are real.