Aptos Lawyer: What is a Ponzi scheme


ponzi-scheme-for-rest-of-usA Ponzi scheme is named after Charles Ponzi, an Italian businessman in the US and Canada who became known as a swindler.

He was the first to introduce the fraudulent investment scheme where the operator, an individual or organization, pays returns to its investors from new capital paid by new investors, rather than from profit earned through legitimate sources.

In Ponzi schemes, investors are enticed with unusually higher returns than other investments.

At the start, these schemes begin as a legitimate business, until the business fails to achieve the returns expected.

This is because the promise of high returns requires an ever-increasing flow of money from new investor.

written by James Jackson,  attorney

Monerey Bay Forum

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Santa Cruz, CA 95060
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