I think this guy was going for a Guinness record ponzi scheme or something.
He was basically taking cash from one client to pay off dividends to another customer. No one bothered to ask how, because, hey, who turns down free money and 12% returns, amirite? But now that the music has stopped, everyone's complaining about how there aren't enough chairs. $15,000,000,000 has already just disappeared, that could close in on $50B before all is said and done.
But the really sad thing? Think what $15B reinvested into your local economy to fund real startups (and I'm not talking about the "I have an idea for a website" crowd here) could have done.