b'Watch for unauthorized transfers or large expenditures, frequent ATM withdrawals, personal credit cards paid with company funds, advances on future pay, or reselling interests in the company. Watch for people living above their meansbuying fancy toys, taking extravagant vacations, holding lavish parties, etc.Knowingsomeoneelseiswatchingisthebestprevention.Ifyou discover embezzlement, you will need to remove that person from the asset manager; your documents should allow this, but you might have to hire an attorney to do so. Make sure your managers operating agreement has clear removal provisions, for both members and managers, that can be executed by a majority of members of the asset management entity.Ponzi Schemes Ponzi schemes occur when new investors are recruited to pay previous investors. This is often done to cover up embezzlement by someone in management, or mismanagement of the investment. Before investing in an existingsyndicateorfund,oragreetoacapitalcallinanexisting investment, make sure you have a clear picture of how the funds will be spent, and that the explanation makes sense. Descriptions of additional types of investor fraud can be found on the SECs website at:https://www.investor.gov/protect-your-investments/fraud/types-fraud 289'