What Are Ponzi Schemes?
Charles Ponzi was a famous embezzler who lived in the previous century. He is rumored to have been the first famous american con man, promising unprecedented returns on investment to attract money and paying interests with fresh incoming money.
These investments were fraudulent as they did not generate returns from any legitimate business venture and bilked the customer.
The Ponzi scheme is a near cousin of the Pyramid scheme. Both are doomed to fail and invariably, they do, leaving investors with the loss. Both the Ponzi and the pyramid schemes are scams and since Ponzi, they have been numerous. To this day, there are many ponzi schemes being organized worldwide.
As they are presented with enough credibility and high returns are hard to resist, many people fall into this trap. Today, Ponzi schemes are also categorized as crimes of persuasion.
