One of the mysteries of the English language finally explained.
A form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
- ‘Named after Charles Ponzi, who ran such a plot from 1919-1920, the Ponzi scheme is a fraudulent investment plan.’
- ‘When such ventures are attempted in the private sector, they go by the name of pyramid or Ponzi schemes and constitute criminal fraud.’
- ‘These returns were actually generated from the principal of members who joined later - a classic Ponzi scheme which uses new money to pay off old ‘profits’.’
- ‘Instead of bilking people in Ponzi schemes, some CEOs fleece investors by claiming to have achieved enormous profits in the previous year, when the company actually made much less or even suffered a loss.’
- ‘It's a bit like a Ponzi scheme, where initial investors are paid off with money from subsequent investors to make it appear that the investment is a success and drum up more investors by word of mouth.’
Named after Charles Ponzi (died 1949), who carried out such a fraud (1919–20).
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