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MIAMI (CBS4) ― Stephanie Halio is a Ponzi scheme victim. She says she and her husband invested more than one million dollars with Bernie Madoff.

For 17 years neither they nor federal watchdogs thought anything was amiss. Then last December Madoff's Wall Street Ponzi shattered, and so did the Halios' retirement and peace of mind. Now they fight just to stay in their Boca Raton home.

Halo said, "It was like the ground just disappeared beneath us. Everything crashed. Everything fell on our heads. We didn't know how we were going to survive. It has been 11 months and it has been tortuous."

It is a story being repeated across our community. Prosecutors say Madoff's victims are joined by those who put their faith in other men like Allen Stanford, Andres Pimstein, and disgraced Fort Lauderdale attorney Scott Rothstein.

Federal agents say Rothstein financed a lavish lifestyle by selling bogus legal settlements to investors. The Ponzi scheme works by paying off old investors with money from new investors. When too many people want their money back at once the scheme collapses.

Dr. Harley Stock is a nationally recognized forensic psychologist who has studied the minds of Ponzi con men. Dr. Stock said, "They are glib. They are superficially charming. Most of these people are psychologically damaged. Money is the end product but it is not the motivator. The motivator is affection and attention so people look at them and say, 'look how wonderful you are. You are giving to charity. You are providing money for good works.' "

Rothstein fit that bill. He draped himself with celebrities, charities and politicians including Governor Charlie Crist.

"They know how to get people to like them," Dr. Stock said. "They are deceitful, they are excellent manipulators and they are pathological liars. The victim generally says to himself or herself you know this sounds too good to be true but I like this guy. He seems okay. My friend invested with him and my friend is not a dope. I don't want to be left out in the cold when I have an opportunity to make money."

Stephanie Halio wanted to make money too but says her returns were not off the charts. She never met Bernie Madoff and says she and her husband would have run in the other direction if only the Securities and Exchange Commission had raised a red flag. It never did. Halio said, "What greater authority is there than the SEC? I would say to them they are criminally responsible for all the pain and suffering caused by Bernie Madoff."

Pain and suffering – sooner or later it is the payoff from every Ponzi, big or small.

Andres Pimstein was a South Florida con man who told investors he was selling iPods to a big department store chain in Chile, and he promised returns of 18 percent or more. It was a huge fraud.

Wayne Black is a veteran public corruption investigator now running his own private firm. He worked on the Pimstein case. Black told me, "The common thread with all these Ponzis is a trust pyramid. In other words they trust the person or they trust the person who refers them to the Ponzi or pyramid."

Pimstein was a University of Miami graduate and UM employees were among his victims. Black said, "He's writing on a whiteboard and making power point presentations in a conference room at the University of Miami and some investors thought the people who loaned him the conference room had checked him out."

UM administrators had no idea what was happening. Pimstein's scam earned him a 17 year federal prison sentence.

Allen Stanford, meanwhile, waits to see if he will follow the growing line of Ponzi masters fitted for prison jumpsuits. He also had a South Florida connection. Stanford allegedly bilked investors here and around the world out of up to seven billion dollars by selling bogus certificates of deposit involving an offshore bank.

Wayne Black said, "In Stanford there was a big office in Miami, a big office in Texas, a bank in Antigua." Once again the trappings of legitimacy were there and no one thought to take a long hard look beneath the surface, including federal watchdogs paid to do just that.

"The answer," Black said, "is quicker reporting to the FBI and law enforcement, agencies that have subpoena power and can search a place."

Stephanie Halio wishes someone had probed and demanded answers and accountability for her and so many others.

She told CBS4's Michael Williams, "You can choose to live or choose to die. Several people have chosen to die. We have chosen to live."

The Halios are doing just that—taking on new jobs in their retirement years, fighting and living in the middle of the financial wreckage that will help define the rest of their lives.

(© MMX, CBS Broadcasting Inc. All Rights Reserved.)

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