比特派钱包官方|ponzi scheme

作者：比特派钱包官方

2024-03-07 20:38:09

庞氏骗局（对金融领域投资诈骗的称呼）_百度百科

（对金融领域投资诈骗的称呼）_百度百科网页新闻贴吧知道网盘图片视频地图文库资讯采购百科百度首页登录注册进入词条全站搜索帮助首页秒懂百科特色百科知识专题加入百科百科团队权威合作下载百科APP个人中心庞氏骗局是一个多义词，请在下列义项上选择浏览（共2个义项）展开添加义项庞氏骗局播报讨论上传视频对金融领域投资诈骗的称呼收藏查看我的收藏0有用+10本词条由“科普中国”科学百科词条编写与应用工作项目审核。庞氏骗局，是对金融领域投资诈骗的称呼，是金字塔骗局（Pyramid scheme）的始祖。在中国庞氏骗局又称“拆东墙补西墙”或“空手套白狼”。简言之就是利用新投资人的钱来向老投资者支付利息和短期回报，以制造赚钱的假象，进而骗取更多的投资。很多非法的传销集团就是用这一招聚敛钱财的。 [4]这种骗术是一个名叫查尔斯·庞兹的投机商人“发明”的。查尔斯·庞兹（Charles Ponzi）是一位生活在19、20世纪的意大利裔投机商，1903年移民到美国。1919年他开始策划一个阴谋，骗子们向一个事实上子虚乌有的企业投资，许诺投资者将在三个月内得到40%的利润回报，然后，狡猾的庞兹把新投资者的钱作为快速盈利付给最初投资的人，以诱使更多的人上当。由于前期投资的人回报丰厚，庞兹成功地在七个月内吸引了三万名投资者。这场阴谋持续了一年之久，才让被利益冲昏头脑的人们清醒过来，后人称之为“庞氏骗局”。 [4]中文名庞氏骗局外文名Ponzi scheme定义对金融领域投资诈骗的称呼分类金字塔骗局的始祖用途聚敛钱财目录1名词来源2常见骗术▪彩票骗局▪传销诈骗▪419诈骗案▪征婚骗局▪连环信▪传销骗局▪克洛斯▪虚拟银行▪养老院3表现形式4共性特征5危害性名词来源播报编辑“庞氏骗局”源自于一个名叫查尔斯·庞兹（Charles Ponzi，1882-1949）的人，他是一个意大利人，1903年移民到美国。在美国干过各种工作，包括油漆工，一心想发大财。他曾因伪造罪在加拿大坐过牢，在美国亚特兰大因走私人口而蹲过监狱。经过美国式发财梦十几年的熏陶，庞兹发现最快速赚钱的方法就是金融，于是，从1919年起，庞兹隐瞒了自己的历史来到了波士顿，设计了一个投资计划，向美国大众兜售。这个投资计划说起来很简单，就是投资一种东西，然后获得高额回报。但是，庞兹故意把这个计划弄得非常复杂，让普通人根本搞不清楚。1919年，第一次世界大战刚刚结束，世界经济体系一片混乱，庞兹便利用了这种混乱。他宣称，购买欧洲的某种邮政票据，再卖给美国，便可以赚钱。国家之间由于政策、汇率等等因素，很多经济行为普通人一般确实不容易搞清楚。其实，只要懂一点金融知识的人都会指出，这种方式根本不可能赚钱。然而，庞兹一方面在金融方面故弄玄虚，另一方面则设置了巨大的诱饵，他宣称，所有的投资，在90天之内都可以获得40%的回报。而且，他还给人们“眼见为实”的证据：最初的一批“投资者”的确在规定时间内拿到了庞兹所承诺的回报。于是，后面的“投资者”大量跟进。地设陷阱非法集资在一年左右的时间里，差不多有4万名波士顿市民，变成庞兹赚钱计划的投资者，而且大部分是怀抱发财梦想的穷人，庞兹共收到约1500万美元的小额投资，平均每人“投资”几百美元。当时的庞兹被一些愚昧的美国人称为与哥伦布、马可尼（无线电发明者之一）齐名的最伟大的三个意大利人之一，因为他像哥伦布发现新大陆一样“发现了钱”。庞兹住上了有20个房间的别墅，买了100多套昂贵的西装，并配上专门的皮鞋，拥有数十根镶金的拐杖，还给他的妻子购买了无数昂贵的首饰，连他的烟斗都镶嵌着钻石。当某个金融专家揭露庞兹的投资骗术时，庞兹还在报纸上发表文章反驳金融专家，说金融专家什么都不懂。1920年8月，庞兹破产了。他所收到的钱，按照他的许诺，可以购买几亿张欧洲邮政票据，事实上，他只买过两张。此后，“庞兹骗局”成为一个专门名词，意思是指用后来的“投资者”的钱，给前面的“投资者”以回报。庞兹被判处5年刑期。出狱后，他又干了几件类似的勾当，因而蹲了更长的监狱。1934年被遣送回意大利，他又想办法去骗贝尼托·墨索里尼，也没能得逞。1949年，庞兹在巴西的一个慈善堂去世。死去时，这个“庞氏骗局”的发明者身无分文。 [1]常见骗术播报编辑彩票骗局加拿大的有组织犯罪团伙给一些英国家庭（通常是老年人）打电话，告诉他们中了加拿大的彩票大奖，而要兑奖，必须先缴纳一定数额的手续费。尽管手段很拙劣，但仍有很多英国人上当，有人甚至被骗走4万英镑。传销诈骗传销漫画2011年一个名为“女人授权给女人”的金字塔传销诈骗案成为世界报纸重点报道的对象，这一诈骗案席卷整个英国，令许多英国妇女遭受巨大损失。这一骗局采取缴纳入会费的方式，鼓励女性投资，许诺投资3000英镑就可以得到2.4万英镑的回报，还竭力从会员那里套取其家人和朋友的联系方式。很多人因此失去了3000英镑的入会费。419诈骗案你是否收到过一封英文电子邮件，写信人自称是尼日利亚政府某高官的家人，因政变或贪污行为暴露，其银行账户被冻结，需要有人帮助才能将数千万美元转移出来，然后要求你提供资金以及银行账号的细节，帮助他们转移这笔资金，并许诺给你丰厚的回报，但实际上他们会取空你的账户。这就是尼日利亚“419诈骗案”（419是尼日利亚刑典中的相关部分）。据调查，尼日利亚骗子每年在网上行骗钱财达4000万美元。征婚骗局征婚骗局漫画(3张)人们常说，爱情会蒙蔽人的眼睛。这或许是越来越多爱情骗子通过互联网交友中心诈骗的原因。2013年初，一位名叫拉姆的新加坡已婚妇女因利用征婚骗钱而被判入狱6个月，她以结婚为诱饵，骗取了一名美国男子4.5万美元。连环信戴夫·罗斯是世界上最有名的连环信的始作俑者。20年前，第一封格式化的连环信从邮局发出，连环信的标题是“快速赚钱”，信中要求收信人将一定数额的钱寄到信中列出的几个名字名下，然后将这封信复制寄到其他地址。连环信中许诺，这样做的结果就是用小投资赚大钱，在60天内就能赚到4万英镑。戴夫·罗斯是否真有其人，谁也无从知晓。传销骗局20世纪90年代，阿尔巴尼亚2/3的人口在最具破坏性的金字塔传销骗局中失去了自己的毕生积蓄，引发街头骚乱，导致数千人死亡，差点掀起一场内战，最后导致政府垮台，因为一开始，这一骗术得到了政府的支持。金字塔传销骗局的架构是：由所谓某项“投资”或“买卖交易”之办法推广组织，利用几何级数的增长方式，赚取加入这些办法的新成员所缴纳的费用，牟取暴利。克洛斯巴洛·克洛斯巴洛·克洛斯骗局是英国历史上最臭名昭著的骗局之一。20世纪80年代，巴洛·克洛斯公司吸收了1.8万位私人投资者的资金，这些受骗者都认为自己投资的是没有风险的政府债券。实际上，大笔资金进入了公司的创始人彼得·克洛斯的私人账户，他把这笔钱用来购买私人飞机、豪华汽车、豪宅和豪华游艇，过着奢侈的生活，直到被揭发出来，锒铛入狱。虚拟银行2008年初在线游戏《第二人生》中出现了一个虚拟银行，它声称可以给投资者带来高额回报。但该虚拟银行很快倒闭，导致许多人无法拿回自己的投资。之后，《第二人生》上又出现一个银行，在吸收了众多虚拟货币之后关门大吉，银行的两位开办者把虚拟货币兑换成了现实中的货币——5000美元，再也不在《第二人生》上露面。2015年2月8日，河北三地合作社“庞氏骗局”崩塌：涉案80亿。 [1]养老院从2013年到2020年，全国养老服务领域非法集资犯罪案件数量呈逐年上升趋势。2022年8月，最高人民法院公布了六类养老诈骗犯罪典型案例，其中发生在江西省乐平市的“鲁鹏非法吸收公众存款案”，就是以投资“养老项目”为名实施非法集资犯罪的典型案件。2020年12月24日，鲁鹏因犯非法吸收公众存款罪，被乐平市人民法院判处有期徒刑四年，并处罚金五万元。经审理查明，乐平太阳山公司向51名老年人非法吸收资金165万余元。案发后，通过追赃挽损，目前已有共计56万余元退还给了集资参与人。 [5]表现形式播报编辑自庞兹以后，不到100年的时间里，各种各样的“庞氏骗局”在世界各地层出不穷。随着中国改革开放的进程，改头换面的“庞氏骗局”也大量进入中国。在上个世纪80年代，我国南方地区曾经出现一种“老鼠会”，就是“庞氏骗局”的翻版。而更令人熟知的“庞氏骗局”改进版，就是各种各样的传销。一些在中国发生的非法集资案，大多也都是“庞氏骗局”的再现。某些突然暴富的中国商业奇迹，其发财手段也是“庞氏骗局”的再现。2007年蚁力神事件，也是类似的骗局，利用新加入的购买设备和蚂蚁种的钱来支付之前的投资者。其他如万里大造林，事实上也是这一“古老”骗局的更新版，只不过“庞氏骗局”45天回报周期，被万里大造林改为8年。其他如向农民推销种植某种奇怪的农产品或养殖产品，然后许诺高价回收，都属于此类骗局。甚至还有人把中国股市的某些行为，也称为“庞氏骗局”的翻版，不是完全没有道理。中国的黑社会不是很发达，却有比较发达的江湖社会。江湖社会中有各种各样的骗钱招数，几百年来，这些骗术万变不离其宗地出现，改头换面，换汤不换药，以适应现代社会的现实条件，屡屡使人上当。而纳斯达克的前主席伯纳德·麦道夫也采取了同样的办法，将古老的骗术用现代金融手段再包装后，使其重新焕发生机。这类骗术每次出现，即使最后被拆穿，也会造成小额“投资人”的损失，比方说“万里大造林”，“投资者”想挽回全部损失几乎是不可能的。在此问题上，现代银行与“庞氏骗局”的差别在于，国家政府会保证储蓄者的利益。由于“庞氏骗局”并不高明，受骗的大都是社会底层民众，涉及的范围会比较大。虽然麦道夫已被FBI逮捕，但是，这种事情并不会绝迹。在中国如此，在美国，在世界其他地方都如此。所谓防范，只有靠人们自己的警惕，而关键在于，不要贪心，不要以为天上会掉馅饼。不要相信那些轻易就能赚大钱的鬼话。但是，现代社会在金钱欲望的引导下，越是违背常理的赚钱大话，越是容易使人相信。这也常常使人无奈。对于某些人来说，吃亏上当也不会吃一堑长一智，前车之鉴也没有任何作用。 [2]共性特征播报编辑各种各样的“庞氏骗局”虽然五花八门，千变万化，但本质上都具有自“老祖宗”庞兹身上沿袭的一脉相承的共性特征。低风险、高回报的反投资规律众所周知，风险与回报成正比乃投资铁律，“庞氏骗局”往往反其道而行之。骗子们往往以较高的回报率吸引不明真相的投资者，而从不强调投资的风险因素。各类案件的回报率可能存在差异，有些高得离谱，如庞齐许诺的投资在45天之内都可以获得50%的回报，有些则属于稳健的超常回报，如麦道夫每年向客户保证回报只有约10%，但他非常强调“投资必赚，绝无亏损”。但无论如何，骗子们总是力图设计出远高于市场平均回报的投资路径，而绝不揭示或强调投资的风险因素。拆东墙、补西墙的资金腾挪回补特征由于根本无法实现承诺的投资回报，因此对于老客户的投资回报，只能依靠新客户的加入或其他融资安排来实现。这对“庞氏骗局”的资金流提出了相当高的要求。因此，骗子们总是力图扩大客户的范围，拓宽吸收资金的规模，以获得资金腾挪回补的足够空间。大多数骗子从不拒绝新增资金的加入，因为蛋糕做大了，不仅攫取的利益更为可观，而且资金链断裂的风险大为降低，骗局持续的时间可大大延长。投资诀窍的不可知和不可复制性骗子们竭力渲染投资的神秘性，将投资诀窍秘而不宣，努力塑造自己的“天才”或“专家”形象。实际上，由于缺乏真实投资和生产的支持，骗子们根本没有可供仔细推敲的“生财之道”，所以尽量保持投资的神秘性，宣扬投资的不可复制性是其避免外界质疑的有效招术之一。当年《波士顿环球时报》的记者曾经撰文揭露庞齐的骗局，却被庞齐以“不懂金融投资”为由加以批驳。投资的反周期性特征“庞氏骗局”的投资项目似乎永远不受投资周期的影响，无论是与生产相关的实业投资，还是与市场行情相关的金融投资，投资项目似乎总是稳赚不赔。万亩大造林计划仿佛从不受气候、环境、地理因素的影响，麦道夫在华尔街的对冲基金也能在二十年中数次金融危机中独善其身，这些投资项目总是呈现出违反投资周期的反规律特征。投资者结构的金字塔特征远离非法集资为了支付先加入投资者的高额回报，“庞氏骗局”必须不断地发展下线，通过利诱、劝说、亲情、人脉等方式吸引越来越多的投资者参与，从而形成“金字塔”式的投资者结构。塔尖的少数知情者通过榨取塔底和塔中的大量参与者而谋利。即便是高深莫测的纳斯达克前董事会主席麦道夫也免不了拉拢下线的俗套，大量利用朋友、家人和生意伙伴发展“下线”，有的人因成功“引资”而获取佣金，“下线”又发展新“下线”，滚雪球式的壮大为“金字塔”结构。 [2]危害性播报编辑较之一般的金融诈骗，“庞氏骗局”受害者更多，影响面更广，危害程度更深，隐蔽性更强，具有更大的社会危害。一是受害者人数众多。“庞氏骗局”固有的金字塔型投资者结构和欺骗拉拢下线的传销方式决定了受害者必须达到一定规模，方能有效维系骗局所需的现金流。因此，典型的“庞氏骗局”受害者往往人数众多，如庞齐当年受骗的投资者达4万之众，以非法集资为特点的哥伦比亚“金字塔骗局”受害人数达200万之多，新近的麦道夫案件受骗人数难以计数，除美国本土，麦氏欺诈案还波及英国、法国、瑞士、西班牙、日本等国。二是受骗金额巨大。诈骗漫画(5张)“庞氏骗局”的肇始人根本没有想过偿还投资本金，因此他们从不担心涉案金额过大，并且骗子们认为集资金额的增大，有助于提升自己的知名度，从而吸引更多的投资者参与。因此，在滚雪球效应累积下的“庞氏骗局”，其涉案金额往往高于一般的金融诈骗。如庞齐当年诈骗了1500万美元，哥伦比亚非法集资案涉案金额达8亿美元，麦道夫案件更是达到了空前的600亿美元。三是社会影响面广，影响层次众多。“庞氏骗局”的受骗人数和受骗规模决定了其社会影响面远超过一般的诈骗案件。其影响层次呈现出多元化的走向，既有政府官员和社会名流，也有金融投资从业人员，更有风险承受能力较低的一般民众和退休人员，由此造成的社会危害也较为严重。如果处置不当，很可能因为民众情绪而危及金融稳定与社会秩序。例如哥伦比亚金字塔骗局就在一些地区引发了大规模骚乱。四是危及投资信心和金融稳定。鉴于“庞氏骗局”的影响力和危害性，其对投资者信心的打击是致命的，每次“庞氏骗局”过后，总要用相当长的时间去修复受损的金融秩序，而恢复投资者的投资信心更非一朝一夕可以完成。以麦道夫弊案为例，由于大量的金融机构卷入其中，造成金融机构的客户对金融机构丧失信任感，引发大规模的连锁诉讼，使已经遭受金融海啸重创的华尔街再添新伤。五是骗术的欺骗性和隐蔽性造成监管追查的困难。高明的“庞氏骗局” 多采用晦涩难懂的投资技术，使生财之道看上去似是而非，又仿佛切实可行，辅之以稳定的超额回报，能够有效地欺骗一般投资者甚至专业投资者。“庞氏骗局”的知情者往往掌控着集团的核心信息，任人唯亲，并严格保守集团的财务秘密，从而降低了被外界揭露或查处的风险。比如，麦道夫公司的资产管理部门和交易部门分别在不同楼层办公，麦道夫对公司财务状况一直秘而不宣，甚至对作为公司高管的子女亲戚也从不透露，而投资顾问业务的所有账目、文件都被麦道夫锁在保险箱里。缺乏透明度和各种各样的欺瞒手段使得“庞氏骗局”往往能在监管者的视野外维持相当长时期。 [3]新手上路成长任务编辑入门编辑规则本人编辑我有疑问内容质疑在线客服官方贴吧意见反馈投诉建议举报不良信息未通过词条申诉投诉侵权信息封禁查询与解封©2024 Baidu 使用百度前必读 | 百科协议 | 隐私政策 | 百度百科合作平台 | 京ICP证030173号京公网安备110000020000

什么是“庞氏骗局”（中英对照） - 知乎

什么是“庞氏骗局”（中英对照） - 知乎首发于法律英语切换模式写文章登录/注册什么是“庞氏骗局”（中英对照）张楚教授中国政法大学法学博士庞氏骗局（//pɒnzi/ 也称庞氏游戏）是一种欺诈形式，它用来自较新投资者的资金，向早期投资者支付利润，以诱骗投资者。该计划使受害者相信利润来源于合法的商业活动（例如产品销售和/或成功的投资），并且他们仍然不知道其他投资者是资金的来源。只要新投资者投入新资金，并且只要大多数投资者不要求全额还款，仍然还相信他们声称所拥有的不存在的资产，庞氏骗局就可以维持其可持续业务的假象。～～～A Ponzi scheme(/ˈpɒnzi/, also a Ponzi game) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity (e.g. product sales and/or successful investments), and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.发布于 2021-04-23 11:45诈骗庞氏骗局金融诈骗赞同 4添加评论分享喜欢收藏申请转载文章被以下专栏收录法律英语英语法律词

经管下午茶：庞氏骗局（Ponzi Scheme） - 知乎

经管下午茶：庞氏骗局（Ponzi Scheme） - 知乎切换模式写文章登录/注册经管下午茶：庞氏骗局（Ponzi Scheme）经管之家【10分钟读懂一个经济学重要知识，今天你GET了吗？】庞氏骗局（Ponzi Scheme）庞氏骗局（Ponzi Scheme）是一种金融诈骗手段，其实质是将后一轮投资者的投资作为投资收益支付给前一轮的投资者，依此类推，卷入的人和资金会越来越多，当新的投资人和资金难以为继的时候，骗局就开始崩溃。庞氏骗局一词源于查尔斯·庞兹（Charles Ponzi，1882—1949）。庞兹是意大利人，1903年移民美国。1919年，庞兹来到波士顿，向市民兜售一个有高额回报的投资计划。为了让普通人摸不着头脑，庞兹故意把投资项目弄得非常复杂，同时设置了巨大的诱饵：90天内可以获得40%的回报。最初一批投资者的确在规定时间内拿到了庞兹所承诺的回报。于是后面的投资者大量跟进。最终有4万名波士顿市民被骗，庞兹共收到约1500万美元的投资。1年后，庞兹骗局破灭，被判五年监禁。1949年，庞兹在巴西去世，死时身无分文。庞氏骗局既不是起源于庞兹，也不可能止于庞兹。时至今日，人类的经济活动中还存在着各式各样的庞氏骗局。每天一点点，你，离经济、管理、金融、统计更近一步！经济学从此不犯难！和我们一起GET吧！发布于 2020-06-10 17:03Scheme庞氏骗局虚拟货币类骗局赞同 1添加评论分享喜欢收藏申请

Bernie Madoff: Who He Was, How His Ponzi Scheme Worked

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Early Life and Education

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Bernie Madoff in Popular Culture

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Definitions A - L

Bernie Madoff: Who He Was, How His Ponzi Scheme Worked

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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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Bernard Lawrence "Bernie" Madoff was an American financier who executed the largest Ponzi scheme in history, defrauding thousands of investors out of tens of billions of dollars over the course of at least 17 years, possibly longer.

He was also a pioneer in electronic trading and chair of the Nasdaq in the early 1990s. He died in prison at age 82 on April 14, 2021, while serving a 150-year sentence for money laundering, securities fraud, and several other felonies.

Key Takeaways

Bernie Madoff was a money manager responsible for one of the largest financial frauds in modern-day history.Bernie Madoff's Ponzi scheme, which likely ran for decades, defrauded thousands of investors out of tens of billions of dollars.Investors put their trust in Madoff because he created a front of respectability, his returns were high but not outlandish, and he claimed to use a legitimate strategy.In 2009 Madoff was sentenced to 150 years in prison and forced to forfeit $170 billion as restitution.As of September 2021, the Madoff Victims Fund distributed its seventh distribution of more than $568 million.

Investopedia / Matthew Collins

Early Life and Education

Bernie Madoff was born in Brooklyn, New York, on April 29, 1938, to Ralph and Sylvia Madoff. His father worked as a plumber before entering the financial industry with his wife. They founded Gibraltar Securities, which was ultimately forced to close by the SEC.

Bernie earned a bachelor's degree in political science from Hofstra University in 1960 and briefly attended law school at Brooklyn Law School. While in college, Bernie married his high-school sweetheart, Ruth (née Alpern), with whom he later founded Bernard L. Madoff Investment Securities LLC in 1960.

At first, he traded penny stocks with $5,000 he earned installing sprinklers and working as a lifeguard. He soon persuaded family friends and others to invest with him. When the "Kennedy Slide" flash crash lopped 20% off the market in 1962, Madoff's bets soured and his father-in-law had to bail him out.

Investopedia / Ellen Lindner

Notable Accomplishments

Madoff had a chip on his shoulder and felt that he was not part of the Wall Street in-crowd. In an interview with journalist Steve Fishman, Madoff advised, "We were a small firm, we weren't a member of the New York Stock Exchange. It was very obvious."

According to Madoff, he began to make a name for himself as a scrappy market maker. "I was perfectly happy to take the crumbs," he told Fishman, giving the example of a client who wanted to sell eight bonds; a bigger firm would disdain that kind of order, but Madoff's would complete it.

Success finally came when he and his brother Peter began to build electronic trading capabilities—"artificial intelligence" in Madoff's words—that attracted massive order flow and boosted the business by providing insights into market activity. "I had all these major banks coming down, entertaining me," Madoff told Fishman. "It was a head trip."

He and four other Wall Street mainstays processed half of the New York Stock Exchange's order flow—controversially, he paid for much of it—and by the late 1980s, Madoff was making in the vicinity of $100 million a year.

Madoff would become chair of the Nasdaq in 1990, and also served in 1991 and 1993.

Scandal, Scheme, and Crime

At some point, Madoff attracted investors by claiming to generate large, steady returns through an investing strategy called split-strike conversion, a legitimate trading strategy. However, Madoff deposited client funds into a single bank account that he used to pay existing clients who wanted to cash out.

He funded redemptions by attracting new investors and their capital but was unable to maintain the fraud when the market turned sharply lower in late 2008.

On Dec. 10, 2008, he confessed his wrongdoing to his sons—who worked at his firm. The following day, they turned him over to the authorities. Bernie remained adamant that his sons were not aware of his scheme.

The fund's last statements indicated it had $64.8 billion in client assets.

The Players

It is not certain when Madoff's Ponzi scheme began. He testified in court that it started in the early 1990s, but his account manager, Frank DiPascali, who had been working at the firm since 1975, said the fraud had been occurring "for as long as I remember."

Even less clear is why Madoff carried out the scheme at all. "I had more than enough money to support any of my lifestyle and my family's lifestyle. I didn't need to do this for that," he told Fishman, adding, "I don't know why." The legitimate wings of the business were extremely lucrative, and Madoff could have earned the Wall Street elites' respect solely as a market maker and electronic trading pioneer.

Madoff repeatedly suggested to Fishman that he was not entirely to blame for the fraud. "I just allowed myself to be talked into something and that's my fault," he said, without making it clear who talked him into it. "I thought I could extricate myself after a period of time. I thought it would be a very short period of time, but I just couldn't."

The so-called Big Four—Carl Shapiro, Jeffry Picower, Stanley Chais, and Norm Levy—have attracted attention for their long and profitable involvement with Bernard L. Madoff Investment Securities LLC. Madoff's relationships with these men go back to the 1960s and 1970s, and his scheme netted them hundreds of millions of dollars each.

"Everybody was greedy, everybody wanted to go on and I just went along with it," Madoff told Fishman. He indicated that the Big Four and others (several feeder funds pumped client funds to him, some all but outsourcing their management of clients' assets) must have suspected the returns he produced or at least should have. "How can you be making 15 or 18% when everyone is making less money?" Madoff said.

The Scheme

Madoff's apparently ultra-high returns persuaded clients to look the other way. In fact, he simply deposited their funds in an account at Chase Manhattan Bank—which merged to become JPMorgan Chase & Co. in 2000—and let them sit. The bank, according to one estimate, may have made as much as $435 million in after-tax profit from those deposits.

When clients wished to redeem their investments, Madoff funded the payouts with new capital, which he attracted through a reputation for unbelievable returns and grooming his victims by earning their trust. Madoff also cultivated an image of exclusivity, often initially turning clients away. This model allowed roughly half of Madoff's investors to cash out at a profit. These investors have been required to pay into a victims' fund to compensate defrauded investors who lost money.

Madoff created a front of respectability and generosity, wooing investors through his charitable work. He also defrauded a number of nonprofits, and some had their funds nearly wiped out, including the Elie Wiesel Foundation for Peace and the global women's charity Hadassah. He used his friendship with J. Ezra Merkin, an officer at Manhattan's Fifth Avenue Synagogue, to approach congregants. By various accounts, Madoff swindled $2.4 billion from its members.

Madoff's plausibility to investors was based on several factors:

His principal, public portfolio appeared to stick to safe investments in blue-chip stocks.

He claimed to be using a collar strategy, also known as a split-strike conversion. A collar is a way of minimizing risk, whereby the underlying shares are protected by the purchase of an out-of-the-money put option.

His returns were high (10 to 20% per annum), consistent, and not outlandish. As the Wall Street Journal reported in a now-famous interview with Madoff, from 1992:

"[Madoff] insists the returns were really nothing special, given that the Standard & Poor's 500-stock index generated an average annual return of 16.3% between November 1982 and November 1992. 'I would be surprised if anybody thought that matching the S&P over 10 years was anything outstanding,' he says."

The Investigation

The SEC had been investigating Madoff and his securities firm off and on since 1992—a fact that frustrated many after he was finally prosecuted since it was felt that the biggest damage could have been prevented if the initial investigations had been rigorous enough.

Financial analyst Harry Markopolos was one of the earliest whistleblowers. In 1999, he calculated in the space of an afternoon that Madoff had to be lying. He filed his first SEC complaint against Madoff in May 2000, but the regulator ignored him.

In a scathing 2005 letter to the Securities and Exchange Commission (SEC), Markopolos wrote, "Madoff Securities is the world's largest Ponzi Scheme. In this case, there is no SEC reward payment due to the whistle-blower so basically I'm turning this case in because it's the right thing to do."

Many felt that Madoff's worst damage could have been prevented if the SEC had been more rigorous in its initial investigations.

Using what he called "Mosaic Theory," Markopolos noted several irregularities. Madoff's firm claimed to be making money even when the S&P was falling, which made no mathematical sense, based on what Madoff claimed he was investing in. The biggest red flag of all, in Markopolos's words, was that Madoff Securities was earning "undisclosed commissions" instead of the standard hedge fund fee (1% of the total plus 20% of the profits).

The bottom line, concluded by Markopolos, was that "the investors that pony up the money don't know that BM [Bernie Madoff] is managing their money." Markopolos also learned Madoff was applying for huge loans from European banks (seemingly unnecessary if Madoff's returns were as high as he said).

It was not until 2005—shortly after Madoff nearly went belly-up due to a wave of redemptions—that the regulator asked Madoff for documentation on his trading accounts. He made up a six-page list, the SEC drafted letters to two of the firms listed but didn't send them, and that was that. "The lie was simply too large to fit into the agency's limited imagination," writes Diana Henriques, author of the book "The Wizard of Lies: Bernie Madoff and the Death of Trust," which documents the episode.

The SEC was excoriated in 2008 following the revelation of Madoff's fraud and their slow response to act on it.

The Punishment

In November 2008, Bernard L. Madoff Investment Securities LLC reported year-to-date returns of 5.6% during the same period when the S&P 500 dropped 39%. As the selling continued, Madoff became unable to keep up with a cascade of client redemption requests.

So, on Dec. 10, according to the account he gave Fishman, Madoff confessed to his sons Mark and Andy, who worked at their father's firm. "The afternoon I told them all, they immediately left, they went to a lawyer, the lawyer said, 'You gotta turn your father in,' they went, did that, and then I never saw them again." Bernie Madoff was arrested on Dec. 11, 2008.

Madoff insisted he acted alone, though several of his colleagues were sent to prison. His elder son Mark Madoff committed suicide exactly two years after his father's fraud was exposed. Several of Madoff's investors also killed themselves. Andy Madoff died of cancer at age 48 in 2014.

Madoff was sentenced to 150 years in prison and forced to forfeit $170 billion in 2009. His three homes and four boats were auctioned off by the U.S. Marshals. On Feb. 5, 2020, Madoff's lawyers requested that Madoff be released early from prison claiming that he was suffering from a terminal kidney disease that may kill him within 18 months.

However, Madoff, prisoner No. 61727-054, remained at the Butner Federal Correctional Institution in North Carolina until he died on April 14, 2021.

The Aftermath

The paper trail of victims' claims displays the complexity and sheer size of Madoff's betrayal of investors. According to documents, Madoff's scam ran for more than five decades, beginning in the 1960s. His final account statements, which include millions of pages of fake trades and shady accounting, show that the firm had $47 billion in "profit."

While Madoff pleaded guilty in 2009 and was sentenced to spend the rest of his life in prison, thousands of investors lost their life savings, and multiple tales detail the harrowing sense of loss victims endured.

Investors victimized by Madoff have been helped by Irving Picard, a New York lawyer overseeing the liquidation of Madoff's firm in bankruptcy court. Picard has sued those who profited from the Ponzi scheme; by April 2021, he had recovered nearly $14 billion.

In addition, a Madoff Victim Fund (MVF) was created in 2013 to help compensate those Madoff defrauded, but the Department of Justice didn't start paying out any of the roughly $4 billion in the fund until late 2017. Richard Breeden, a former SEC chair who is overseeing the fund, noted that thousands of the claims were from "indirect investors"—meaning people who put money into funds that Madoff had invested in during his scheme.

Since they were not direct victims, Breeden and his team had to sift through thousands and thousands of claims, only to reject many of them. Breeden said he based most of his decisions on one simple rule: Did the person in question put more money into Madoff's funds than they took out? Breeden estimated that the number of "feeder" investors was north of 11,000 individuals.

In a September 2021 update for the Madoff Victim Fund, Breeden wrote, "MVF is thrilled to announce a new distribution totaling $568,648,065 to 30,539 victims of the crimes committed at Madoff Securities. Measured by the number of victims paid, this is our largest distribution yet." With the completion of the seventh distribution of funds in September 2021, approximately $3.762 billion has been distributed to 39,494 Madoff victims in the U.S. and around the world. Breeden also noted that they have recovered 81.35% for victims.

Depictions of Bernie Madoff in Popular Culture

As a financial antagonist, Bernie Madoff has been depicted as a villain in the media and pop culture. For instance, in a 2009 episode of HBO's Curb Your Enthusiasm, Jason Alexander (who played George on Seinfeld) is swindled by Madoff and loses all of his money made off of a fictional app that he invented. Other fictional characters have also been had by Madoff (or similar knock-offs) such as a couple in Woody Allen's film Blue Jasmine, and the protagonist of Elinor Lipman's novel, The View from Penthouse B.

Madoff himself has also been depicted in several incarnations, from a 2010 theatrical production called Investing with Madoff to and ABC miniseries starting Richard Dreyfuss. In 2017, Madoff was played by Robert DeNiro in the HBO film The Wizard of Lies. Several documentaries, books, and journalistic accounts have also featured Bernie Madoff in describing his fraud and subsequent demise.

Who Was Bernie Madoff?

Bernie Madoff was an American financier and former Nasdaq chair who orchestrated the largest Ponzi scheme in history. Bernie promised investors high returns in exchange for their investments. However, rather than investing, he deposited their money into a bank account and paid, upon request, from existing and new investors' funds. During the 2008 recession, he could no longer accommodate redemption requests. His scheme came to an end after his sons turned him over to authorities. Bernie was convicted of fraud, money laundering, and other related crimes, for which he was sentenced to 150 years in federal prison. Bernie Madoff died in prison on April 14, 2021, at the age of 82.

How Much Money Did Bernie Madoff Return?

In addition to being sentenced to prison, Bernie Madoff was ordered to pay back $170 billion of investors' money. Madoff's assets, including real estate, yachts, and jewelry, were seized and sold by the Feds. Separately, The Bernie Madoff Victims Fund, led by Richard Breeden, has recovered and paid more than $3.7 billion to close to 40,000 victims as of September 2021.

How Did Madoff Get Caught?

Although several people alerted the SEC and other authorities of Bernie Madoff's scheme, it wasn't until he confessed to his sons that he was caught. In 2008, when Bernie could no longer accommodate investors' redemption requests, he admitted his wrongdoings to his sons, Mark and Andrew, who then turned their father over to authorities.

The Bottom Line

In 2009, at age 71, Madoff pleaded guilty to 11 federal felony counts, including securities fraud, wire fraud, mail fraud, perjury, and money laundering. The Ponzi scheme became a potent symbol of the culture of greed and dishonesty that, to critics, pervaded Wall Street in the run-up to the financial crisis. Madoff, the subject of numerous articles, books, movies, and biopic miniseries, was sentenced to 150 years in prison and ordered to forfeit $170 billion in assets, but no other prominent Wall Street figures faced legal ramifications in the wake of the crisis. In April 2021, Madoff died in a federal correctional facility at age 82.

Article Sources

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Part Of

Guide to Financial Crime and Fraud

What Is Fraud? Definition, Types, and Consequences

1 of 31

What Is White-Collar Crime? Meaning, Types, and Examples

2 of 31

What Is Corporate Fraud? Definition, Types, and Example

3 of 31

What Is Accounting Fraud? Definition and Examples

4 of 31

Financial Statement Manipulation

5 of 31

Detecting Financial Statement Fraud

6 of 31

What Is Securities Fraud? Definition, Main Elements, and Examples

7 of 31

What Is Insider Trading and When Is It Legal?

8 of 31

What Is a Pyramid Scheme? How Does It Work?

9 of 31

Ponzi Schemes: Definition, Examples, and Origins

10 of 31

Ponzi Scheme vs. Pyramid Scheme: What's the Difference?

11 of 31

What Is Money Laundering?

12 of 31

How Does a Pump-and-Dump Scam Work?

13 of 31

Racketeering Definition, State vs. Federal Offenses, and Examples

14 of 31

Mortgage Fraud: Understanding and Avoiding It

15 of 31

Wire Fraud Laws: Overview, Definition and Examples

16 of 31

The Most Common Types of Consumer Fraud

17 of 31

Who Is Liable for Credit Card Fraud?

18 of 31

How to Avoid Debit Card Fraud

19 of 31

The Biggest Stock Scams of Recent Time

20 of 31

Enron Scandal: The Fall of a Wall Street Darling

21 of 31

Bernie Madoff: Who He Was, How His Ponzi Scheme Worked

22 of 31

5 Most Publicized Ethics Violations by CEOs

23 of 31

The Rise and Fall of WorldCom: Story of a Scandal

24 of 31

Four Scandalous Insider Trading Incidents

25 of 31

What Is the Securities Exchange Act of 1934? Reach and History

26 of 31

Securities and Exchange Commission (SEC) Defined, How It Works

27 of 31

Financial Crimes Enforcement Network (FinCEN) Overview

28 of 31

Anti Money Laundering (AML) Definition: Its History and How It Works

29 of 31

Compliance Department: Definition, Role, and Duties

30 of 31

Compliance Officer: Definition, Job Duties, and How to Become One

31 of 31

Related Terms

What Is White-Collar Crime? Meaning, Types, and Examples

White-collar crime is a nonviolent crime characterized by deceit to obtain or avoid losing money, or to gain a personal or business advantage.

Ponzi Schemes: Definition, Examples, and Origins

A Ponzi scheme is an investment scam that pays early investors with money taken from later investors to create an illusion of big profits.

Wire Fraud Laws: Overview, Definition and Examples

Wire fraud is a type of fraud that involves the use of some form of telecommunications or the internet, and it is punishable by fines and jail time. See examples.

Allen Stanford: Who he is, Backstory, Financial Impact

Allen Stanford is a former banker that was convicted of securities fraud in excess of $8 billion.

Affinity Fraud: What It is, How It Works, Example

An affinity fraud is an investment scam in which a con artist targets members of an identifiable group based on things such as race, age and religion.

Michael Milken: Philanthropist, Chair of Miliken Institute

Michael Milken is a philanthropist and financier known for his investment in junk bonds as an executive at the investment bank Drexel Burnham Lambert.

What Is White-Collar Crime? Meaning, Types, and Examples

6 Ways to Avoid an Investment Ponzi scheme

Ponzi Schemes: Definition, Examples, and Origins

The 9 Biggest Hedge Fund Failures

Financial Villains: Where Are They Now?

The Biggest Stock Scams of Recent Time

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Home › Resources › Wealth Management › Ponzi Scheme

Ponzi Scheme

A fraudulent investment program that involves using payment collected from new investors to pay off the earlier investors

Written by

CFI Team

What is a Ponzi Scheme?

A Ponzi scheme is considered a fraudulent investment program. It involves using payments collected from new investors to pay off the earlier investors. The organizers of Ponzi schemes usually promise to invest the money they collect to generate supernormal profits with little to no risk.

However, in the real sense, the fraudsters don’t really plan to invest the money. Their intention is to pay off the earliest investors to make the scheme look believable. As such, a Ponzi scheme requires a constant flow of funds to sustain itself. When the organizers can no longer recruit more members or when a vast proportion of the existing investors decide to cash out, the scheme tumbles.

Breaking Down Ponzi Schemes

A Ponzi scheme is simply a type of investment scam where investors are promised substantial returns. Companies that participate in Ponzi schemes focus all of their attention on luring new clients. Once the new entrants invest, the money is collected and used to pay the original investors as “returns.”

However, a Ponzi scheme is not the same as a pyramid scheme. With a Ponzi scheme, investors are made to believe that they are earning returns from their investments. In contrast, participants in a pyramid scheme are aware that the only way they can make profits is by recruiting more people to the scheme. To a great extent, Ponzi schemes are investment tricks.

Red Flags of Ponzi Schemes

Most Ponzi schemes come with some common attributes such as:

1. Promise of high returns with minimal risk

In the real world, every investment one makes carries with it some degree of risk. In fact, investments that offer high returns typically carry more risk. So, if someone offers an investment with high returns and few risks, it is likely to be a too-good-to-be-true deal. Chances are the investor won’t see any returns.

2. Overly consistent returns

Investments experience fluctuations all the time. For example, if one invests in the shares of a given company, there are times when the share price will increase, and other times it will decrease. That said, investors should always be skeptical of investments that generate high returns consistently regardless of the fluctuating market conditions.

3. Unregistered investments

Before rushing to invest in a scheme, it’s important to confirm whether the investment company is registered with U.S. Securities and Exchange Commission (SEC) or state regulators. If it’s registered, then an investor can access information regarding the company to determine whether it’s legitimate.

4. Unlicensed sellers

According to federal and state law, one should possess a specific license or be registered with a regulating body. Most Ponzi schemes deal with unlicensed individuals and companies.

5. Secretive, sophisticated strategies

One should avoid investments that consist of procedures that are too complex to understand.

History of the Ponzi Scheme

The scheme got its name from one Charles Ponzi, a fraudster who duped thousands of investors in 1919.

Ponzi promised a 50% return within three months on profits earned from international reply coupons. Back in the day, the postal service offered international reply coupons, which enabled a sender to pre-purchase postage and incorporate it in their correspondence. The recipient would then exchange the coupon for a priority airmail postage stamp at their home post office.

Due to the fluctuations in postage prices, it wasn’t unusual to find that stamps were pricier in one country than another. Ponzi saw an opportunity in the practice and decided to hire agents to buy cheap international reply coupons on his behalf then send them to him. He exchanged the coupons for stamps, which were more expensive than what the coupon was originally bought for. The stamps were then sold at a higher price to make a profit. This type of trade is known as arbitrage, and it’s not illegal.

However, at some point, Ponzi became greedy. Under the Securities Exchange Company, he invited people to invest in the company, promising 50% returns within 45 days and 100% within 90 days. Given his success in the postage stamp scheme, no one doubted his intentions. Unfortunately, Ponzi never really invested the money, he just plowed it back into the scheme by paying off some of the investors. The scheme went on until 1920 when the Securities Exchange Company was investigated.

How to Protect Yourself from Ponzi Schemes

In the same way that an investor researches a company whose stock he’s about to purchase, an individual should investigate anyone who helps him manage his finances. The easiest way to go about it is to contact the SEC and ask if their accountants are currently conducting open investigations (or investigated prior cases of fraud).

Also, before investing in any scheme, one should ask for the company’s financial records to verify whether they are legit.

Key Takeaways

A Ponzi scheme is simply an illegal investment. Named after Charles Ponzi, who was a fraudster in the 1920s, the scheme promises consistent and high returns, yet supposedly with very little risk. Although such a scheme can work in the short term, it runs out of money eventually. Therefore, investors should always be skeptical of investments that sound too good to be true.

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CFI is the official provider of the Financial Modeling and Valuation Analyst (FMVA)™ certification program, designed to transform anyone into a world-class financial analyst.

To keep learning and developing your knowledge of financial analysis, we highly recommend the additional CFI resources below:

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Ponzi Scheme | Investor.gov

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Ponzi Scheme

A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.

With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.

Ponzi schemes are named after Charles Ponzi, who duped investors in the 1920s with a postage stamp speculation scheme.

Ponzi scheme “red flags”

Many Ponzi schemes share common characteristics. Look for these warning signs:

High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.

Overly consistent returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.

Unregistered investments. Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company’s management, products, services, and finances.

Unlicensed sellers. Federal and state securities laws require investment professionals and firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.

Secretive, complex strategies. Avoid investments if you don’t understand them or can’t get complete information about them.

Issues with paperwork. Account statement errors may be a sign that funds are not being invested as promised.

Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.

Additional Information

Investor Alert: Ponzi Schemes Targeting SeniorsInvestor Alert: Ponzi Schemes Using Virtual Currencies

Ponzi scheme | Fraudulent Investment Schemes | Britannica Money

i scheme | Fraudulent Investment Schemes | Britannica MoneyHistory & SocietyScience & TechBiographiesAnimals & NatureGeography & TravelArts & CultureGames & QuizzesVideosOn This DayOne Good FactDictionaryLifestyles & Social IssuesPhilosophy & ReligionPolitics, Law & GovernmentWorld HistoryHealth & MedicineScienceTechnologyBrowse BiographiesBirds, Reptiles & Other VertebratesBugs, Mollusks & Other InvertebratesEnvironmentFossils & Geologic TimeMammalsPlantsGeography & TravelEntertainment & Pop CultureLiteratureSports & RecreationVisual ArtsCompanionsDemystifiedImage GalleriesInfographicsListsPodcastsSpotlightSummariesThe ForumTop Questions#WTFact100 WomenBritannica KidsSaving EarthSpace Next 50Student CenterSubscribe NowMoney HomeHousehold FinanceInvestingRetirementHistory & TheoryTable of ContentsExternal WebsitesTable Of ContentsHistory & TheoryPonzi schemecrimeWritten byJeannette L. NolenJeannette L. NolenJeannette L. Nolen was an editor in social science at Encyclopaedia Britannica. Fact-checked byThe Editors of Encyclopaedia BritannicaThe Editors of Encyclopaedia BritannicaEncyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.Updated: Feb. 15, 2024Table of ContentsExternal WebsitesTable Of Contents Key People:Bernie MadoffPonzi scheme, fraudulent and illegal investment operation that promises quick, easy, and significant returns on investments with little or no risk. A Ponzi scheme is a type of pyramid scheme in which the operator, at the pyramid’s top, acquires a small group of investors that is initially provided with tremendous investment returns via funds secured from a second group of investors. The second group, in turn, is paid with funds obtained from a third group of investors, and so on until the number of potential investors is exhausted and the scheme collapses. The operator may either appropriate a portion of incoming investments as the scheme progresses or wait until the operation is about to collapse before absconding with the funds.Although historians believe variations of the Ponzi scheme existed as early as the 17th century, the scheme was named for Carlo Ponzi, an Italian immigrant to the United States who scammed thousands of New England residents out of millions of dollars in 1919–20 with his plan to sell European postage stamps. Ponzi initially acquired a small group of investors with the promise of doubling their investments within 90 days. As word of the supposed get-rich-quick investment opportunity spread, Ponzi’s pool of investors expanded, allowing him to raise significant amounts of money in very short periods of time—in one instance, he raised $1 million in only three hours—and thus maintain the trust of his investors. Within nine months, however, Ponzi’s scheme had collapsed. Although his entire investment had amounted to only $30 worth of stamps, he ultimately defrauded thousands of investors out of approximately $15 million with his scheme. Ponzi was arrested in 1920 and charged with multiple counts of fraud and larceny and sentenced to prison.Ponzi was by no means the last to effect the scheme. More recently, in 2007 Chinese businessman Wang Fengyou, founder of Yilishen Tianxi Group, was arrested on charges of “instigating social unrest” after angry victims of his ant-farming scheme, which allegedly conned an estimated one million people out of more than $1 billion, mobbed government offices in protest. In 2008 David Murcia Guzmán, founder of the now-defunct Colombian financial group D.M.G. Grupo Holding SA (DMG), was arrested and charged with money laundering for operating a prepaid-debit-card scheme that purportedly robbed investors of more than $1 billion; several others were later arrested and charged in connection with the scheme. In the same year, Bernie Madoff, a former chairman of the NASDAQ stock exchange and founder and chairman of Bernard L. Madoff Investment Securities LLC, was charged with fraud for operating a Ponzi scheme that allegedly defrauded investors out of some $50 billion. In March 2009 he pleaded guilty to 11 charges of fraud and money laundering, and in June he was sentenced to 150 years in prison.Jeannette L. NolenBritannica MoneyHousehold FinanceInvestingRetirementHistory & TheoryAbout UsPrivacy PolicyTerms & Conditions© 2024 Encyclopædia Britannica, Inc.

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Ponzi Schemes | Investor.gov

An official website of the United States government

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Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure.

The

https://

ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Investor.gov

U.S. Securities and Exchange Commission

Auxiliary Header

About Us

Información en Español

Search Investor.gov

Please enter some keywords to search

Main navigation

Introduction to Investing

Getting Started

Five Questions to Ask Before You Invest

Understanding Fees

Asset Allocation

Assessing Your Risk Tolerance

Investing on Your Own

Working with an Investment Professional

Researching Investments

Investing Basics

Save and Invest

Invest For Your Goals

How Stock Markets Work

Investment Products

What is Risk?

Role of the SEC

Glossary

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Ponzi Schemes

A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi schemes are named after Charles Ponzi. In the 1920s, Ponzi promised investors a 50% return within a few months for what he claimed was an investment in international mail coupons. Ponzi used funds from new investors to pay fake “returns” to earlier investors.

Ponzi scheme organizers often promise high returns with little or no risk. Instead, they use money from new investors to pay earlier investors and may steal some of the money for themselves.

Learn more

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