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

Now, amid suits and countersuits among the lender bank, investors, a bankruptcy trustee and McClain’s family, details of the alleged Ponzi scheme are coming out.

From The Wall Street Journal • Jun. 7, 2026

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 • Mar. 30, 2026

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

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