Bernie Madoff $50 billion Ponzi scheme made many Americans numb to the very idea of Ponzi schemes. But that's a dangerous attitude to have in a down economy -- typically a time of vigorous Ponzi scheme activity.

Madoff targeted the sophisticated, the wealthy and the famous. Yet it was the middle class which was the target of Nicholas Cosmo and his alleged $380 million scheme geared toward blue-collars workers and government employees.

The consistent element with Madoff, Cosmo and all other Ponzi schemers is that they claim to have a "special" way for you to make money. In Cosmo's case, he was involved in high-yield bridge loans, according to The New York Times. Some 1,500 people took their entire life savings and handed it over to Cosmo. They even took second mortgages on their homes to "invest" with Cosmo.

Here's a fact: CDs only pay 2 or 3 percent and that's one of the few options for growing your money with no risk. What people fail to realize is that investing by its very nature means you put your principal at risk; it's very different than the safe harbor of saving.

No one can promise you returns without risk. Beware of the "can't lose" promises -- no matter how small or great they are; remember that Madoff himself was only promising 10 percent!

Be particularly wary of affinity fraud as well. That's where someone like you -- either in profession, religion or ethnicity -- pitches you on a "can't lose" scheme. There's danger in letting down your guard just because someone is familiar to you in some way.

RIP-OFF ALERT: An Idaho man named Darren Palmer is under investigation for running an alleged $100 million Ponzi scheme. He's no Bernie Madoff -- recall that man's recent $50 billion scheme -- but Palmer still took in some real money.

Palmer was promising a 25%-40% return on people's money every year. It is impossible for anybody to ever deliver this kind of money in a legitimate non-criminal activity.

Quarterly dividends were being paid to early investors with money taken in from later investors. Suddenly, the dividends stopped coming. That's what happens in a Ponzi scheme because you mathematically run out of people to fund it.

This is just another in a long line of cases where people trusted an associate, a friend or a friend of a friend and suspended normal disbelief when told about the returns they could earn.

As one duped investor said of Palmer, "He just seemed so legit. He grew up in the area."

Being born in the same zip code, or going to the same house of worship or country club does not make you legit. This is known as affinity fraud.

With affinity fraud, we let our guard down with someone who is like us. However, we wouldn't trust a stranger with the same claim.

So be careful out there, and remember, just because somebody is familiar to you, it does not mean what they're offering is good.

RIP-OFF ALERT: If Clark told you that he could serve as your investment manager and earn you a steady 10% year after year, would you believe him? That was the promise Bernie Madoff made in a $50 billion Ponzi scheme that he ran for decades.

Madoff's actions were so secretive that even his own children didn't know what he was doing. When he confessed to them, it was his own children who turned him in.

Know this: There is no such thing as a super-safe return of 10% or more. It is not possible.

Perhaps the Madoff scheme survived for so long because it didn't exactly promise outrageous rates of return by Ponzi scheme standards. The average Ponzi scheme might offer a 10% return monthly -- not over the course of year, as Madoff did. So he didn't exactly raise the suspicions of savvy investors -- even though they should have known better just the same.

What made individual investors, banks, charities and even (reportedly) Hollywood luminaries like Steven Spielberg buy into Madoff's scheme?

Two words: affinity fraud. Simply put, they were being pitched on a product by someone like themselves and they let their guard down. See Clark's recent discussion of affinity fraud for more background on this topic.

Before you consider any investment, you've got to do your homework. Can you handle the risk? Are the returns being promised reasonable? Finally, know the difference between saving and investing. Saving is safe and consequently offers very low returns. Investing isn't safe, but it does come with the possibility of higher returns.

RIP-OFF ALERT: Of all the types of fraud, affinity fraud is one that's particularly effective because it hinges on dealing with people who are "like you" -- hence the name. Human nature dictates that we let our guard down when we're approached by someone of the same religion, race, profession, etc.

Consider this example: The Wall Street Journal reports that the son of a rabbi stole $100 million from fellow members of the Jewish community after promising to invest it (with huge returns) in "private placements."

Private placements are an exotic sort of investment where you discover under-the-radar businesses that are poised to boom and then invest in them.

But the rabbi's son was operating a classic Ponzi scheme. He used the money taken from later investors to pay earlier ones, and he pitched people in synagogues throughout Virginia, Illinois, New York, Israel and South Africa.

The Los Angeles Times reports a similar Ponzi scheme saw one criminal steal $22 million from people using the private placements shtick. Returns of 40% were promised. The culprit used the money to fund his lifestyle with his wife and his mistress. In fact, the man gave twice as much money to the mistress as he did to the wife!

This latter example is not strictly a case of affinity fraud like the first one. However, Clark has some advice for you if you're ever confronted with either situation:

• If you don't understand what they're pitching, don't do it.
• Just because someone is your pal at the golf course or a house of worship, it does not mean they're automatically more trustworthy than a stranger on the street.

Have you seen all the TV ads, trying to get you to trade currency? If you read financial publications, you probably see ads there too. Trading currency is a tough thing to do for professionals. They can lose a ton of money every time they trade. But there is a higher risk for amateurs because of all the criminal outfits out there. These rogue traders offer to trade your money for you using their “proprietary method.” But what they really do is take your money and spend it. It’s a classic “ponzi scheme.” One man ripped people off for $30 million. With it, he bought an island, a yacht and land in California. Don’t give these people anymore money. If you get a phone call about currency trading, hang up. Even if it’s legitimate, you’re likely to lose money.

Have you heard of affinity fraud? It’s the type of con where a scam artist will convince affluent people to invest in a certain fund or company. The con artists gain the trust of preachers, doctors, and other “leaders” and then get them to invest. Those people get huge returns on their money right away, so the other people around them start investing. The lead investors are usually not involved in the scam, but they spread the word because they are excited. The problem is that there is no real money, and often the scam artist is fronting the scam with his own money. Affinity fraud has been around since the 80s but it’s back “in” hot and heavy right now because people are concerned about investing in stocks. One “social club” lost $27 million in a recent scam. So remember to be cautious when someone in a group around you starts talking up these investments. People let their guards down when someone they know recommends something. But you need to independently verify the true story. Phenomenal returns on investments don’t exist.

Have you heard of the NFIC – the National Fraud Information Center? It’s become a great source for information about the latest scams around the world. Repeatedly, someone drafting your checking account has become one of the favorites for thieves. Sweepstakes are another top complaint. The average loss in a fraudulent lottery is $5,000, which is huge. The No. 2 scam is phony scholarship help. The third most popular scam is magazine sales and callers who are “renewing” subscriptions. No. 4 is credit card offers and No. 5 is fake check scams with the average loss being about $4,000. Advance fee loan scams are also huge, as are work-at-home schemes and lottery pools. We’ve all experienced some type of phishing scam, and finally are the phony vacation offers. Clark has talked about each of these at some point in the show, but you still need to be on the lookout.

There is a trend in direct marketing right now to send very misleading, yet convincing mailings that could wipe out your wallet. The main target is senior citizens and they are old fashioned ways of taking advantage of you. They mailings look like they’re coming from an official government organization or department. A popular one today uses a logo that looks like the one from the Department of Housing and Urban Development. Really it’s just a pitch from a mortgage company to try and get you to refinance. Another one featured in the Washington Post looks exactly like an envelope from the U.S. Treasury, but it too is a refinance pitch. Many also look like correspondence from your bank or from some kind of “sweepstakes commission” or bureau that doesn’t exist. The Federal Trade Commission is very concerned about these scams, so warn your parents. These are all scams demanding payments, so be very careful.

Every week, it seems Clark shares a story about the latest Ponzi scheme. The most popular kinds are Ponzi schemes and affinity scams. Churches and doctors are often targets of these schemes. And the latest newsworthy scam is unbelievable. One man conned $253 million out of about 7,000 people by getting them to believe a lie. Larry Osaki somehow convinced people that they would get 20 percent returns on the money they gave him every 90 days. So, what would they make money on? Latex gloves. It’s not a joke. People thought the next big break was in latex gloves. If your stocks are doing great, you’re going to earn 7 to 10 percent on your money each year at the most. That’s over the course of a year. One consolation is that Osaki is headed to prison, according to the Orlando Sentinel. Whenever someone promises you more than the normal return on your money, run the other way.

The SEC just shut down a group that stole millions from churchgoers who believed they were being “divinely guided.” The people believed they would make twice as much money in sixty days if they invested in these gold transactions. They were told their money would help an Arabian Prince move his gold from Israel to the United Arab Emirates, which of course was not true. There is no legitimate chance that you can double your money within sixty days. You are doing well if your money earns 4 to 5% a year. Clark wants people to make intelligent decisions with there money.

Every week, it seems Clark shares a story about the latest Ponzi scheme. The most popular kinds are Ponzi schemes and affinity scams. Churches and doctors are often targets of these schemes. And the latest newsworthy scam is unbelievable. One man conned $253 million out of about 7,000 people by getting them to believe a lie. Larry Osaki somehow convinced people that they would get 20 percent returns on the money they gave him every 90 days. So, what would they make money on? Latex gloves. It’s not a joke. People thought the next big break was in latex gloves. If your stocks are doing great, you’re going to earn 7 to 10 percent on your money each year at the most. That’s over the course of a year. One consolation is that Osaki is headed to prison, according to the Orlando Sentinel. Whenever someone promises you more than the normal return on your money, run the other way.

Clark often reports on ripoffs going on in the consumer world. Today, he has a Top 10 list of scams, schemes and scandals, provided by the state regulators who watch over financial analysts and brokers. Drum roll please…. The No. 10 scam is variable annuities. If you don’t know what these are and you don’t have any, good. If you do, you don’t want to put any more money into these plans. They have massive commissions and are absolutely horrible for your wallet. No. 9 are scandalous mutual fund companies. No. 8 is Internet fraud. No. 7 are “high yield investment” scams. Some that Clark has received calls on involve exotic overseas investments that are a complete scam. Insurance agents who sell people bogus investments come in at No. 6. Most insurance agents are honest, but a number of them have been involved in very scandalous affairs. No. 5 are church ripoffs. Just because someone seems religious does not mean that person is on the up and up. At No. 4, phony brokers. Just because someone says something is going to be a great investment doesn’t mean it will. Promissory notes – or fake CDs – are No. 3. These are promises that someone will pay you later if you give them money. But there is no guarantee, and it’s not safe. No. 2 is any kind of scam against seniors. If you’re not involved in your parents’ finances, be nosy! And, the No. 1 scam in the U.S. involving your wallet are Ponzi schemes. These are schemes where criminals recruit people to pay back other people who have invested, and then you have to recruit someone once you’re in. Eventually, these collapse because there are no more people willing to “invest.” There a lots of people who will sell you sizzle, but that’s all it is.