page_title: Ponzi scheme
hierarchical_section_title: Ponzi scheme
caption_attribution_description: English: Charles Ponzi (March 3, 1882 – January 18, 1949). Charles Ponzi was a businessman born in Italy who became known as a swindler for his money scheme. His aliases include Charles Ponei, Charles P. Bianchi, Carl and Carlo. Italiano: Foto di Charles Ponzi. Charles Ponzi (Lugo, 3 marzo 1882 – Rio de Janeiro, 18 gennaio 1949) è stato un affarista e truffatore italiano. Immigrò negli Stati Uniti, dove divenne uno dei più grandi truffatori della storia americana.
context_page_description: A Ponzi scheme is a special kind of fraud. It is based on a fake investment that one schemer gets other people to give money to.
  In Ponzi schemes, the schemer basically says, "I found a great way to make money fast. The more you give me, the more I can invest in that cause, and the more I can earn for us all". But a Ponzi scheme doesn't actually "earn money". Instead, all of the scheme's money comes from the investors.
  Once a Ponzi scheme gets too many investors, the system will always crash. This is because the investors all expect more money than they invested, and they will get impatient.
  These schemes always stop one of three ways:
  The schemer runs away with the money they got. This is what schemers try to do.
  The schemer runs out of money; They will be unable to promise money back right away. This is called liquidity, and makes investors panic and demand their money back, often all at once.
  Authorities find out about the scheme and stop it.
  The scheme was named after a man named Charles Ponzi. He used the scheme after moving from Italy to the United States in 1903. However, Ponzi's scheme was so big that it became the most popular.
context_section_description: A Ponzi scheme is a special kind of fraud. It is based on a fake investment that one schemer (or group of schemers) gets other people to give money to.
  In Ponzi schemes, the schemer basically says, "I found a great way to make money fast. The more you give me, the more I can invest in that cause, and the more I can earn for us all". But a Ponzi scheme doesn't actually "earn money". Instead, all of the scheme's money comes from the investors.
  Once a Ponzi scheme gets too many investors, the system will always crash. This is because the investors all expect more money than they invested, and they will get impatient.
  These schemes always stop one of three ways:
  The schemer runs away with the money they got. This is what schemers try to do.
  The schemer runs out of money; They will be unable to promise money back right away. This is called liquidity, and makes investors panic and demand their money back, often all at once.
  Authorities (or sometimes whistleblowers on the inside) find out about the scheme and stop it.
  The scheme was named after a man named Charles Ponzi. He used the scheme after moving from Italy to the United States in 1903. (Ponzi didn't invent the scheme, though. In 1857, Charles Dickens wrote a book called Little Dorrit about a scheme like this. The scheme is a simple idea, and probably very old.) However, Ponzi's scheme was so big that it became the most popular. His original scheme was based on using countries' money-exchange rates to make money, based on international postage stamps. But money soon stopped being invested in coupons, and went to early investors, and a lot to Ponzi himself. 
  Ponzi schemes can be run anywhere, even online, and are being run even now.
caption: Charles Ponzi in 1920 while still working as a businessman in Boston
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