What is a Ponzi Scheme?

Charles Ponzi father of the Ponzi Scheme2009 brought a lot of ponzi schemes to an end.  Often people ask ” What is a Ponzi scheme? ”  Well, Ponzi schemes, were named for the infamous swindler Charles Ponzi.  Charles Ponzi was an Italian immigrant who concocted the scheme in 1919.  It  involved bogus investments in postal currency. He ripped off thousands of people out of over $10 million, and ended up going to jail for wire fraud and was deported in 1934.  Ponzi schemes are extremely simple: Investors are attracted by promises of high profits and are then paid with money from new investors.  The scammers skim off the top. Some of the investments are partially legitimate but most are completely fictional. There’s often no reserve fund for lean times, or for when many investors start demanding their money at once, which is why in 2009 a large number of them failed.

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