Ponzi scheme
Robbing Peter, Paul
A Ponzi scheme is a fraudulent investment operation that pays returns to earlier investors using money from newer investors rather than from legitimate profits.
The scheme requires constant recruitment to sustain payouts; when new money dries up, it collapses.
Named after Charles Ponzi, who ran a notorious 1920s postal-reply coupon scam.
Bernie Madoff operated the largest Ponzi scheme in history.
Deception for financial gain
- embezzlementFraudulent taking of entrusted assets
- scamDishonest money-making scheme
- conArgument against
- griftSwindle or petty fraud
bilk · defraud · fleece · hustle · racket · securities fraud · wire fraud · mail fraud
Process of coming undone
- implosionViolent collapse inward
- meltdownCatastrophic loss of control
- bustFailure or sculpture
- crashSudden violent impact
bankruptcy · insolvency · liquidation · receivership · default · withdrawal · exposure · revelation
- mastermindScheme's chief planner
- fraudsterCriminal deceiver for gain
- con artistProfessional fraud perpetrator
- swindlerPerson who deceives for money
operator · promoter · architect · ringleader · accomplice · Stanford
Profits from investments
- high-yieldProducing substantial returns
- dividendsProfits paid to shareholders
- principalChief school administrator
- capitalWealth used for investment
investors · portfolio · securities · funds · deposits · promises · guaranteed · interest
Deliberate deception for effect
- shamFraudulent imitation
- ruseDeliberate act of deception
- deceitDeliberate misleading of others
- trickeryDeliberate deception or fraud
fabrication · falsification · fictitious · misleading · misrepresentation · cover-up · smoke and mirrors · illusion
swindle
Deception for financial gain
- embezzlementFraudulent taking of entrusted assets
- scamDishonest money-making scheme
- conArgument against
grift · bilk · defraud · fleece · hustle · racket · securities fraud · wire fraud · mail fraud · misappropriation
unraveling
Process of coming undone
crash · bankruptcy · insolvency · liquidation · receivership · default · withdrawal · exposure · revelation · downfall
Bernie Madoff
- mastermindScheme's chief planner
- fraudsterCriminal deceiver for gain
- con artistProfessional fraud perpetrator
swindler · operator · promoter · architect · ringleader · accomplice · Stanford
returns
Profits from investments
- high-yieldProducing substantial returns
- dividendsProfits paid to shareholders
- principalChief school administrator
capital · investors · portfolio · securities · funds · deposits · promises · guaranteed · interest · payouts
hoax
Deliberate deception for effect
trickery · fabrication · falsification · fictitious · misleading · misrepresentation · cover-up · smoke and mirrors · illusion · pretense
- Financial ScandalsEnron, Bernie Madoff, insider trading, securities fraud, accounting fraud
- crimesarson, burglary, robbery, kidnapping, vandalism
- fraudscam, fraud, swindle, con, deceive
- business ethicscode of conduct, ethics code, codes of conduct, ethics training, ethics committee
- economic ethicsfair wages, fair pricing, economic justice, economic fairness, wealth redistribution
- financial crimesbank fraud, wire fraud, securities fraud, tax fraud, insurance fraud
Ponzi schemeindex fund
Investment matching market benchmark
blue-chip stock · pension fund · mutual fund · treasury bond · certificate of deposit
Ponzi schemewealth creation
Generating lasting financial gains
venture capital · equity investment · real estate investment
Ponzi schemeethical investing
Aligning portfolios with values
fair dealing · full disclosure · fiduciary duty · philanthropy · charitable giving