what is a ponzi scheme in simple terms
A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.hen a Ponzi scheme is not stopped by the authorities, it sooner or later falls apart for one of the following reasons: 1  The promoter vanishes, taking all the remaining investment money (which excludes payouts to investors already made).