Ponzi Schemes – Article (Articles) (Ponzi Schemes) Introduction to Ponzi Schemes A Ponzi scheme is a form of investment fraud that offers high returns with little risk to investors. Named after Charles Ponzi, who became infamous for using this scheme in the early 20th century, these schemes rely on the influx of new investors to pay returns to earlier investors. […]
Category: Ponzi Schemes
A Ponzi Scheme is a fraudulent investment operation that promises high returns with little risk, named after Charles Ponzi, who famously used this method in the early 20th century. These schemes rely on the influx of new investors to pay returns to older investors, creating a cycle that can only continue as long as new money is being recruited. Key characteristics include unrealistic promises, consistent returns regardless of market conditions, and a lack of transparency. Notable examples include Charles Ponzi and Bernie Madoff, whose schemes defrauded investors of billions. To avoid falling victim to Ponzi schemes, individuals should conduct thorough research, verify the legitimacy of the investment and the advisor, and remain skeptical of unsolicited offers.