you may want to contact a tax pro who can discuss the situation with you and review relevant documents. . this may or may not be a PONZI-type scheme. A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. A Ponzi scheme is a fraudulent investing scam that generates returns for earlier investors with money taken from later investors.
if it is there are special procedures that must be followed to take the loss.
if it isn't, then it would be a non-deductible personal casualty loss.
