Ponzi schemes
Uploaded by fabs2hiphop on Sep 10, 2012
A Ponzi scheme is an investment fraud that involves the payment of purported returns to investors from funds that is contributed by bran new investors. A lot of Ponzi scheme people often get new investors by promising to invest funds in opportunities that say that the investors will get high returns with little to no risk. In a lot of Ponzi schemes, the fraudsters try to get new investors to have new money to make promise payments to the earlier investors. The schemes require a consistent flow of money from new investors to continue the scheme. Ponzi schemes tend to collapse when it becomes difficult to get new investors or when a large number of investors cash out. Ponzi and pyramid schemes are closely related because the both involve paying longer-standing members with money from new participants, instead of actual profits from investing or selling products to the public. A difference between a pyramid scheme and a Ponzi scheme is that a Ponzi schemer will only ask you to invest in something. You won’t be asked to take any more action than handing over money. The Ponzi schemer is the mastermind behind the whole system and is always shuffling money from one place to another.
Usually the scammer will say “if you get in this opportunity now, you’ll be an early investor in the next big thing. Not only that, it’s fail-safe and will return your investment in no time.” Unfortunately, not all schemes look the same, which makes it hard to spot when you’re being victimized. Clever scammers are always able to thrive because they are creating new ways to con others out of their life savings. Ponzi schemes are very popular, but not all of them are big enough to make the newspaper. Every now and then a new story comes out telling how the authorities found a long-running Ponzi scheme. Bernard Madoff, who made the biggest Ponzi scheme to date, conned $65 billion from investors who came from everywhere. Ponzi schemes are unjust and a crime because you are taking other people’s money, promising them they will get more in exchange, and taking the money for yourself and running off. “Ponzi scheme” is named after a man named Charles Ponzi who was born March 3rd, 1882 and died January 18, 1949. Ponzi was an Italian immigrant that became one of the greatest swindlers in American history. He...