Ponzi scheme

British  

/ ˈpɒnzɪ /

noun

1. a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit

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Etymology

Origin of Ponzi scheme

After Charles Ponzi , who famously perpetrated such a scheme in the United States of America in the early 20th century

Example Sentences

However, Bernie Madoff was a fiduciary, and he violated the trust of his clients in a multibillion-dollar Ponzi scheme.

From MarketWatch • Mar. 30, 2026

And Weizhen Tang, who calls himself a “Chinese Warren Buffett” in a LinkedIn profile, was convicted in 2013 of defrauding customers in a $50 million Ponzi scheme.

From The Wall Street Journal • Mar. 19, 2026

And Bernie Madoff ran his own Ponzi scheme for decades before his 2008 arrest.

From Barron's • Mar. 1, 2026

“I mean, you take a 10%, 20%, 15% of a guy’s NIL money, that’s Bernie Madoff level,” Cronin said Friday, referencing the crooked financier who was convicted in a massive Ponzi scheme.

From Los Angeles Times • Dec. 5, 2025

They had the essential feature of a Ponzi scheme: To maintain the fiction that they were profitable enterprises, they needed more and more capital to create more and more subprime loans.

From "The Big Short" by Michael Lewis