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

How do I know that my money is safe with my financial adviser and feel sure they are not running a Madoff-type Ponzi scheme?

From MarketWatch

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

From MarketWatch

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

In an indictment unsealed last September, prosecutors alleged that Regan and his associates ran two investment firms “like a Ponzi scheme, using money obtained from earlier investors to pay later investors and to pay commissions to salespeople.”

From The Wall Street Journal

The Attorney General’s office in Florida, where RAD is based, have said the firm was perpetrating an apparent “Ponzi scheme,” citing complaints from investors.

From Barron's