A Ponzi scheme (, ; also a Ponzi game) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.
Introduction
Ponzi scheme
Ponzi scheme | Introduction
Form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. It is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. A form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. It is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
who was adele spitzeder?
user
German actress, folk singer, and con artist.
assistant
what was she accused of?
user
She was convicted instead of bad accounting and mishandling customers' money.
assistant
where was she born?
user
Berlin
assistant
apart from acting did she have other jobs?
user
Yes, she was a banker.
assistant
which bank?
user
Her own bank
assistant
how did she die?
user
Cardiac arrest
assistant
what was her debut film?
user
Deborah and Mary Stuart.
assistant
we talked about her mishandling money, was it sort of a  scheme?
user
Yes, Ponzi scheme
assistant
what exactly is this scheme?
user
Like most Ponzi Schemes, all it requires is a chain of investors with the old members paid hefty returns on their money from the deposits of the new members. The money investors may or may not understand how the scheme works, but quite often they don't care as long as they are getting big profits on their invested money. Everybody wakes up to the facts of the scheme, when the chain is broken by the force of law or due to some other reason. Then the investors, awaiting the big profits, have to pay a big price not only in money but also emotionally.
Double Shah | How the scheme works
His original scheme was based on the legitimate arbitrage of international reply coupons for postage stamps, but he soon began diverting new investors' money to make payments to earlier investors and to himself. Unlike earlier, similar schemes, Ponzi's gained considerable press coverage both within the United States and internationally both while it was being perpetrated and after it collapsed – this notoriety eventually led to the type of scheme being named after him.
Ponzi scheme | Introduction
Other notable (but involving smaller amounts of money) Ponzi schemes include:
List of Ponzi schemes | Other notable schemes
On July 26, the "Post" started a series of articles that asked hard questions about the operation of Ponzi's money machine. The paper contacted Clarence Barron, the financial journalist who headed Dow Jones & Company, to examine Ponzi's scheme. Barron observed that though Ponzi was offering fantastic returns on investments, Ponzi himself was not investing with his own company. Barron then noted that to cover the investments made with the Securities Exchange Company, 160 million postal reply coupons would have to be in circulation. However, only about 27,000 actually were in circulation. The United States Post Office stated that postal reply coupons were not being bought in quantity at home or abroad.
Charles Ponzi | Collapse of the scheme
A Ponzi scheme is an investment fund where withdrawals are financed by subsequent investors, rather than profit obtained through investment activities. The largest instance of securities fraud committed by an individual ever is a Ponzi scheme operated by former NASDAQ chairman Bernard Madoff, which caused up to an estimated $64.8 billion in losses depending on which method is used to calculate the losses prior to its collapse.
Securities fraud | Ponzi schemes
Among the first recorded incidents to meet the modern definition of Ponzi scheme were carried out from 1869 to 1872 by Adele Spitzeder in Germany and by Sarah Howe in the United States in the 1880s through the "Ladies' Deposit". Howe offered a solely female clientele an 8% monthly interest rate, and then stole the money that the women had invested. She was eventually discovered and served three years in prison. The Ponzi scheme was also previously described in novels; Charles Dickens' 1844 novel "Martin Chuzzlewit" and his 1857 novel "Little Dorrit" both feature such a scheme. In the 1920's, Charles Ponzi carried out this scheme and became well known throughout the United States because of the huge amount of money that he took in.
Ponzi scheme | Introduction
Especially with lightly-regulated and monitored investment vehicles like hedge funds, in the absence of a whistleblower or accompanying illegal acts any fraudulent content in reports is often difficult to detect unless and until the investment vehicles ultimately collapses. Typically, however, if a Ponzi scheme is not stopped by authorities it usually falls apart for one or more of the following reasons: Actual losses are extremely difficult to calculate. The amounts that investors thought they had were never attainable in the first place. The wide gap between "money in" and "fictitious gains" make it virtually impossible to know how much was lost in any Ponzi scheme.
Ponzi scheme | Unraveling of a Ponzi scheme
In reality, Ponzi was paying earlier investors using the investments of later investors. While this type of fraudulent investment scheme was not originally invented by Ponzi, it became so identified with him that it now is referred to as a "Ponzi scheme." His scheme ran for over a year before it collapsed, costing his "investors" $20 million. Ponzi may have been inspired by the scheme of William F. Miller (also known as "520% Miller"), a Brooklyn bookkeeper who in 1899 used a similar deception to take in $1 million.
Charles Ponzi | Introduction
This is a list of Ponzi schemes, fraudulent investment operations that pay out returns to investors from money paid in by subsequent investors, rather than from any actual profit earned from the operation of a business.
List of Ponzi schemes | Introduction
List of Ponzi schemes
Donald Anthony Walker Young | See also
“Ms. Johnson was extremely successful in attracting investors and raised approximately $50 million in less than nine months.” It was later discovered that Johnson had been siphoning money from the funds she generated using 12DailyPro (an excess of US$1.9 million) into her personal bank account since mid-2005. When the company was shut down many of these people lost large sums of money, although the earliest “investors” remained in profit.
Charis Johnson | Ponzi scheme
Critics have drawn parallels between Social Security and Ponzi schemes, e.g.: One criticism of the analogy is that while Ponzi schemes and Social Security have similar "structures" (in particular, a sustainability problem when the number of new people paying in is declining), they have different "transparencies". In the case of a Ponzi scheme, the fact that there is no return-generating mechanism other than contributions from new entrants is obscured whereas Social Security payouts have always been openly underwritten by incoming tax revenue and the interest on the Treasury bonds held by or for the Social Security system. The sudden loss of confidence resulting in a collapse of a conventional Ponzi scheme when the scheme's true nature is revealed is unlikely to occur in the case of the Social Security system.
Social Security (United States) | Claim that it is a Ponzi scheme
A Ponzi scheme (, ; also a Ponzi game) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.
Ponzi scheme | Introduction
A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a mistaken belief in a nonexistent financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish these schemes from Ponzi schemes: Cryptocurrencies have been employed by scammers attempting a new generation of Ponzi schemes. For example, misuse of initial coin offerings, or "ICOs", on the Ethereum blockchain platform have been one such method, known as ""smart Ponzis"" per the "Financial Times". The novelty of ICOs means that there is currently a lack of regulatory clarity on the classification of these financial devices, allowing scammers wide leeway to develop Ponzi schemes using these assets.
Ponzi scheme | Similar schemes
In the meantime, government investigators tried to trace Ponzi's convoluted accounts to figure out how much money he had taken and where it had gone. They never managed to untangle it and could conclude only that millions had gone through his hands.
Charles Ponzi | Florida
They managed to establish thousands of accounts with BLMIS, representing individual investors, charities, trusts, pension funds, hedge funds, and corporations.
United States v. O'Hara | The Ponzi scheme
Because Ponzi schemes were not yet illegal, she was convicted instead of bad accounting and mishandling customers' money and sentenced to three years in prison. Her bank was closed and 32,000 people lost 38 million gulden, the equivalent of almost 400 million euros in 2017 money, causing a wave of suicides. Her personal fortune in art and cash was stripped from her. After her release from prison in 1876, Spitzeder lived off benefactors and unsuccessfully tried to act again in Altona and Berlin. She left Germany for Vienna but police there prevented her engagement, so she returned to Munich in 1878 to publish her memoir.
Adele Spitzeder | Introduction
The gross profit margin in percent on buying and selling each IRC was colossal, but the overhead required to handle the purchase and redemption of these items, which were of extremely low cost and were sold individually, would have exceeded the gross profit. Barron noted that if Ponzi really was doing what he claimed to do, he would effectively be profiting at the expense of a government—either the governments where he bought the coupons or the U.S. government. For this reason, Barron argued that even if Ponzi's operation was legitimate, it was immoral to take advantage of a government in this manner.
Charles Ponzi | Collapse of the scheme
Individuals who wanted to take part in the scheme invested their money in the expectation that the money would be lent to borrowers and repaid, with interest, over time. Investors would be matched with borrowers over the Internet. The scheme promised to pay investors around seven times the interest rates that could be obtained by depositing the money with a bank in the normal way, with interest rates of between 9% and 14.6% being promised. The company sponsored the online broadcasts of the National People's Congress and placed advertisements on the state-run China Central Television, both of which gave people confidence in the scheme.
Ezubao | Ponzi scheme
To curb this practice, several Moneylenders Acts were enacted by the State governments of India by the 1950s. However failure to replace the role of moneylenders gave rise to unscrupulous financial operators that operated Ponzi schemes. Some commentators place the blame for these kinds of Ponzi schemes on greed rather than exclusion from formal banking systems. However, this does not address the former issue of being able to save their money easily, keep it in safekeeping and invest it so that it grows. While post offices have tried to address this through postal savings banks, people are often lured by Ponzi schemes that promise much higher returns.
Saradha Group financial scandal | Background
Private sector Ponzi schemes are also vulnerable to collapse because they cannot compel new entrants, whereas participation in the Social Security program is a condition for joining the U.S. labor force. In connection with these and other issues, Robert E. Wright calls Social Security a "quasi" pyramid scheme in his book, "Fubarnomics".
Social Security (United States) | Claim that it is a Ponzi scheme
12DailyPro was a version of what is commonly known as a “paid autosurf” program where “investors” deposited money, ranging from US$6.00 to US$6000.00 per account, and received an extremely high profit (144%) within a short period (12 days). Under the umbrella of her company, LifeClicks, and through the use of her experience in marketing and web development, Johnson created one of the largest modern day versions of the Ponzi scheme. Through the use of her website, she manipulated thousands of people to join and deposit money. In the later stages of the fraudulent scheme, she managed to retain investors' trust by repeatedly bouncing blame and failures on other companies, groups, and individuals, including Brigham Young University students and professors, StormPay, ABC4 News of Salt Lake City, Utah and even the government of the United States.
Charis Johnson | Ponzi scheme
The Ponzi Scheme is the second studio album by the American alternative rock band Firewater, released on March 31, 1998 by Jetset and Universal Records.
The Ponzi Scheme | Introduction
India declared both Goldquest and Questnet to be Ponzi scheme companies.
Qnet | 2003
Theoretically it is not impossible at least for certain entities operating as Ponzi scheme to ultimately "succeed" financially, at least so long as a Ponzi scheme was not what the promoters were initially intending to operate. For example, a failing hedge fund reporting fraudulent returns could conceivably "make good" its reported numbers, for example by making a successful high-risk investment. Moreover if the operators of such a scheme are facing the likelihood of imminent collapse accompanied by criminal charges, they may see little additional "risk" to themselves in attempting cover their tracks by engaging in further illegal acts to try and make good the shortfall (for example, by engaging in insider trading).
Ponzi scheme | Unraveling of a Ponzi scheme
From 2011, Mavrodi started targeting developing countries in Asia and Africa, promising 30% monthly returns and other promotional offers. It claimed that this was not a high-yield investment programme of HIYP. Rather it was mentioned on the website that a community of people were "selflessley helping each other" in a form of "Global Fund of mutual aid." Participants were asked to send financial help to fellows with the promise that they would be helped when in need by returning a sum more than what they had sent. In India, for example, many victims of this scheme reported that once they sent the "help", they received messages saying that the system has restarted and that they couldn't access their investments anymore.
MMM (Ponzi scheme company) | Fraud scheme in developing countries
As long as new investors keep contributing, earlier ones keep getting a return on their investment and the fraud continues. But eventually, new investors stop contributing and the whole pyramid collapses, with the later contributors getting nothing in return for their investment. As is the case with many Ponzi schemes, Lewis relied on trust and word of mouth to help build his scheme. Many of Lewis' victims were members of churches and church-related groups, of which Lewis was reportedly a member.
James Paul Lewis Jr. | Introduction
An estimate of Romanian newspaper "România Liberă" gives the amount of money involved as 1.4 trillion lei or about 20% of the 1993 expenditures of the Romanian government of 6.6 trillion. "The New York Times" estimated the scheme attracted between $1 billion and $5 billion.
Caritas (Ponzi scheme) | Size
The "Post" articles caused a panic run on the Securities Exchange Company. Ponzi paid out $2 million in three days to a wild crowd outside his office. He canvassed the crowd, passed out coffee and doughnuts, and cheerfully told them they had nothing to worry about. Many changed their minds and left their money with him. However, this attracted the attention of Daniel Gallagher, the United States Attorney for the District of Massachusetts. Gallagher commissioned Edwin Pride to audit the Securities Exchange Company's books—an effort made difficult by the fact Ponzi's bookkeeping system consisted merely of index cards with investors' names.
Charles Ponzi | Collapse of the scheme
Despite the allegations they were aware of Madoff's fraud and beneficiaries of it, Sterling asked the US Supreme Court to reverse a court decision and allow them access to a special fund set up for Madoff victims.
Sterling Equities | Madoff Ponzi Scheme
From that perspective we had reason to make sure that this was not structured. Because when you're dealing with structured settlements you need other levels of Court approval. It would have required the manufacturer of literally hundreds of phony orders, which would have led the entire scheme to detection.' The FBI estimates the loss to be up to a billion dollars from lucrative whistle-blower and employment discrimination cases. The investors would make up-front cash payments to individuals owed money from the court cases to buy the right to collect the full amount of the settlements later. The investor was guaranteed a minimum of 20 percent investment returns in as little as three months.
Scott W. Rothstein | $1.2 billion Ponzi scheme
МММ was a Russian company that perpetrated one of the world's largest Ponzi schemes of all time, in the 1990s. By different estimates from 5 to 10 million people lost their savings. According to contemporary Western press reports, most investors were aware of the fraudulent nature of the scheme, but still hoped to profit from it by withdrawing money before it collapsed. In 2011, MMM re-opened as "MMM Global".
MMM (Ponzi scheme company) | Introduction
Scheme $6,000 () is a 2011 Hong Kong Government tax rebate program that gave out HK$6,000 to all adult holders of a Hong Kong permanent identity card, in a bid to "藏富於民" (Leave wealth with the people).
Scheme $6,000 | Introduction
Caritas was a Ponzi scheme in Romania that was active between April 1992 and August 1994. It attracted millions of depositors from all over the country, who invested more than a trillion old lei (between US$1 billion and $5 billion) before it finally went bankrupt on 14 August 1994, having a debt of US$450 million ($ in current terms).
Caritas (Ponzi scheme) | Introduction
Sarah Emily Howe (c. 1826 – January 26, 1892) was an American fraudster who operated several Ponzi schemes in the 1870s and 1880s, most famously the Ladies' Deposit Company of Boston. Howe was arrested in 1880 and imprisoned for three years for fraud, but upon her release she repeated similar frauds until she was arrested again in 1888.
Sarah Howe (fraudster) | Introduction
In 2016, it was revealed that some CBA staff were implicated in an alleged $76m Ponzi scheme fraud. The alleged architects of the scam were professional poker player Bill Jordanou and accountant Robert Zaia.
Commonwealth Bank | 2016 $76m Ponzi scheme
The Ponzi scheme was the largest financial fraud in American history prior to Bernie Madoff's being uncovered. In February 1993, the Securities and Exchange Commission charged that the company, while fraudulently reporting a profit of $13 million ($ in current dollar terms) for the four years ended June 30, 1991, actually lost $137 million ($ in current dollar terms). In March 1993, Towers Financial filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code.
Towers Financial Corporation | History
At the same time, more and more Romanian newspapers published stories on it. In a press conference in September 1993, president Iliescu predicted its demise, noting that anyone with an elementary education could predict that anything which gives eightfold returns in three months cannot last.
Caritas (Ponzi scheme) | Bankruptcy
According to the FBI, from at least as early as the 1980s through to December 11, 2008, Madoff, Frank DiPascali, and others perpetrated a scheme to defraud clients of the BLMIS IA corporation by accepting billions of dollars of clients' funds under false pretenses, promising to invest the funds for the clients. Instead, they failed to invest the funds and created and distributed false documents that purported to show that the funds had been invested, when they hadn't. Allegedly, they also lied to the SEC and an accounting firm to cover up the fraudulent scheme. Madoff solicited, and caused others to solicit, prospective clients to open accounts with BLMIS by, among other things, promising to invest funds in common stock, options, and other securities in a way that would achieve high rates of return with little risk.
United States v. O'Hara | The Ponzi scheme
The Silnas lost the money that they had invested with Bernie Madoff, with the trustee for the victims of the scheme alleging that Silna and his associates had received $24 million in unearned income from Madoff.
Ozzie and Daniel Silna | Bernie Madoff Ponzi scheme
The schemer pays a "return" to initial investors from the investments of new participants, rather than from genuine profits. Often, high returns encourage investors to leave their money in the scheme, so that the operator does not actually have to pay very much to investors. The operator simply sends statements showing how much they have earned, which maintains the deception that the scheme is an investment with high returns. Investors within a Ponzi scheme may even face difficulties when trying to get their money out of the investment.
Ponzi scheme | Characteristics
In 2012, Castelli was charged with defrauding 600 northern Italian investors of some €20 million, earning him the label “The Madoff of Turin.” This was undertaken likewise through Inprogamme.
Antonio Castelli | Ponzi Scheme
Though Ponzi was still paying back investors, mostly from money from subsequent investors, he had not yet figured out a way to actually change the IRCs to cash. He also subsequently realized that changing the coupons to money was a logistical impossibility. For example: for the initial eighteen investors of January 1920, for their $1800 investment, it would have taken 53,000 postal coupons to actually realize the arbitrage profits. For the subsequent 15,000 investors that Ponzi had, he would have had to fill "Titanic"-sized ships with postal coupons just to ship them to the U.S. from Europe. However, Ponzi found that all the interest payments returned to him, as investors kept re-investing.
Charles Ponzi | Infeasibility of Ponzi's scheme
In order to stay afloat Ponzi schemes rely on a continuous supply of greater fools who are willing to buy into the scheme. Although a share in such a scheme has no value whatsoever, so long as more greater fools buy into it, it can remain profitable for the investors involved.
Greater fool theory | Examples
In 1920, Charles Ponzi made use of the idea that profit could be made by taking advantage of the differing postal rates in different countries to buy IRCs cheaply in one country and exchange them for stamps of a higher value in another country. This subsequently became the fraudulent Ponzi scheme. In practice, the overhead on buying and selling large numbers of the very low-value IRCs precluded any profitability. The selling price and exchange value in stamps in each country have been adjusted to some extent to remove some of the potential for profit, but ongoing fluctuations in currency value and exchange rates make it impossible to achieve this completely, as long as stamps represent a specific currency value, instead of acting as vouchers granting specific postal services, devoid of currency nomination.
International reply coupon | The Ponzi scheme
Journalists, economists, investors, and the central bank of Estonia have voiced concerns that bitcoin is a Ponzi scheme. In April 2013, Eric Posner, a law professor at the University of Chicago, stated that "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion." A July 2014 report by the World Bank concluded that bitcoin was not a deliberate Ponzi scheme. In June 2014, the Swiss Federal Council examined the concerns that bitcoin might be a pyramid scheme; it concluded that, "Since in the case of bitcoin the typical promises of profits are lacking, it cannot be assumed that bitcoin is a pyramid scheme."
Bitcoin | Ponzi scheme and pyramid scheme concerns
Pyramid schemes in Albania were Ponzi schemes that precipitated the 1997 unrest in Albania. Former economic advisor of Prime Minister Fatos Nano was arrested and imprisoned for his opposition to these schemes.
Pyramid schemes in Albania | Introduction
Typically, Ponzi schemes require an initial investment and promise above average returns. They use vague verbal guises such as "hedge futures trading", "high-yield investment programs", or "offshore investment" to describe their income strategy. It is common for the operator to take advantage of a lack of investor knowledge or competence, or sometimes claim to use a proprietary, secret investment strategy to avoid giving information about the scheme. The basic premise of a Ponzi scheme is "to rob Peter to pay Paul". Initially, the operator pays high returns to attract investors and entice current investors to invest more money. When other investors begin to participate, a cascade effect begins.
Ponzi scheme | Characteristics
In a Ponzi scheme using bitcoins, the Bitcoin Savings and Trust promised investors up to 7% weekly interest, and raised at least 700,000 bitcoins from 2011 to 2012. In July 2013, the U.S. Securities and Exchange Commission charged the company and its founder in 2013 "with defrauding investors in a Ponzi scheme involving bitcoin". In September 2014 the judge fined Bitcoin Savings & Trust and its owner $40 million.
Bitcoin network | Ponzi scheme
Until her arrest, she fraudulently acquired 342 billion yen from 12 financial institutions, including non-commercial banks.
Nui Onoue | Investment Fraud
Soon afterward, Charles Ponzi set up his Securities Exchange Company a few blocks from the "Post's" headquarters. Grozier was very skeptical of Ponzi's claim to double his investors' money in 45 days. At that time, there were about seven respectable newspapers in Boston, but none of them had written about Ponzi's postal reply coupon scheme in detail. Six weeks earlier, "The Boston Traveller" had written about the Ponzi operation without naming him. Another story three weeks earlier in the Post had described a million-dollar lawsuit against Ponzi by a furniture dealer, but this actually burnished Ponzi's reputation as a wealthy person.
Richard Grozier | Exposing Ponzi
Authorities presently suspect that much like the ponzi-schemes run by Bernie Madoff and R. Allen Stanford, that monies were serially transferred between overseas bank accounts to make the whole fund look bigger and more stable than it actually was. Kiener was subsequently arrested and placed in detention in October 2009, while an Interpol-authorised arrest warrant was issued for Frerichs on February 23, 2010.
K1 fund | Collapse and investigation
The relatively prosperous rural economy of West Bengal had previously relied on small savings schemes run by the Indian Postal Service. However, low rates of interest in the 1980s and 1990s encouraged the rise of several Ponzi schemes in speculative ventures such as Sanchayita Investments, Overland Investment Company, Verona Credit and Commercial Investment Company. Together, these scams eliminated close to in investor wealth. Despite a history of Ponzi schemes, the continuing decline in interest rates, rapid financialisation of household savings, lack of financial literacy and investor awareness, political patronage, absence of adequate legal deterrence, and regulatory arbitrage encouraged the growth of similar companies.
Saradha Group financial scandal | Background
This outcome is inevitable in a Ponzi scheme that is allowed to run full course. Sudipto Sen tried but failed to calm uneasy depositors and agents, and could not increase inflow of funds. On 6 April 2013, Sen wrote an 18-page confessional letter to the CBI, in which he admitted that he had paid large sums of money to several politicians. He also stated that TMC leader Kunal Ghosh had forced him to enter into loss-making media ventures and blackmailed him into selling one of his television channels at below market price. Sen fled after posting this letter on 10 April.
Saradha Group financial scandal | Collapse
While often confused with each other, pyramid schemes and Ponzi schemes are different. Pyramid schemes are based on network marketing, where each person in the pyramid is tasked with bringing in their own subordinates and in turn profiting from their sales or recruitments. This fails because it essentially requires an infinite number of people to join the company. In a Ponzi scheme, however, participants are promised returns on “investments,” supposedly into stocks or goods, but which are actually paid for by new investors, while a central leading figure takes a portion as profit.
Pyramid scheme | Relation to Ponzi schemes
Tamar Frankel (born July 4, 1925 in Tel Aviv) has been a professor of law at Boston University School of Law since 1968. She is the author of "The Ponzi Scheme Puzzle: A History and Analysis of Con Artists and Victims", "Fiduciary Law", "Trust and Honesty: America’s Business Culture at a Crossroad", "Investment Management Regulation", "Securitization", and "The Regulation of Money Managers". Her areas of scholarship include financial system regulation, fiduciary law, corporate governance, the Internet, and Space Law. A native of Israel, she has taught at Oxford University, Tokyo University, and lectured in Geneva and Kuala Lumpur, Malaysia, and has consulted with the People's Bank of China.
Tamar Frankel | Introduction
One of her employees was Rosa Ehinger, whose beauty and charm Spitzeder used to attract young men to the bank. Spitzeder's business practices and accounting were unconventional and chaotic. Money was deposited in large sacks and in various cupboards. Her employees, all or almost all without training in accounting, regularly simply took money, with the accounting being restricted to recording the names of depositors and the amounts they paid in, often only signed with "XXX" by her illiterate customers. Her business relied solely on acquiring new customers quickly enough to pay existing customers with the newly acquired money. According to some sources, hers was the first known Ponzi scheme.
Adele Spitzeder | Growth of business
Economic bubbles are also similar to a Ponzi scheme in that one participant gets paid by contributions from a subsequent participant until inevitable collapse. A bubble involves ever-rising prices in an open market (for example stock, housing, cryptocurrency, or tulip bulbs) where prices rise because buyers bid more, and buyers bid more because prices are rising. Bubbles are often said to be based on the "greater fool" theory. As with the Ponzi scheme, the price exceeds the intrinsic value of the item, but unlike the Ponzi scheme:
Ponzi scheme | Similar schemes
In reality, the fraudster almost always steals investor money for personal use. Both types of schemes depend on an unending supply of new investors; when the supply of investors inevitably dries up, the whole scheme collapses and investors discover that most or all of their money is gone.
Affinity fraud | Introduction
Get-rich-quick schemes are extremely varied; these include fake franchises, real estate "sure things", get-rich-quick books, wealth-building seminars, self-help gurus, sure-fire inventions, useless products, chain letters, fortune tellers, quack doctors, miracle pharmaceuticals, foreign exchange fraud, Nigerian money scams, and charms and talismans. Variations include the pyramid scheme, the Ponzi scheme, and the matrix scheme.
List of confidence tricks | Get-rich-quick schemes
Recently the bar of income is withdrawn by Gov. W.B. now every girl can apply for that scheme.
Kanyashree Prakalpa | Introduction
Dayna also leaves abruptly.
The Scheme | Episode Two
On April 30, 2002, Gangi pleaded guilty to racketeering in the 2001 charges and was sentenced to 78 months in prison.
Rosario Gangi | Criminal schemes
According to the U.S. Securities and Exchange Commission (SEC), many Ponzi schemes share similar characteristics that should be "red flags" for investors. The warning signs include:
Ponzi scheme | Red flags
A scheme that targets members of a particular religious or ethnic community is a type of affinity fraud, and a "Newsweek" article identified Madoff's scheme as "an affinity Ponzi". Madoff's annual returns were "unusually consistent", around 10%, and were a key factor in perpetuating the fraud. Ponzi schemes typically pay returns of 20% or higher, and collapse quickly. One Madoff fund, which described its "strategy" as focusing on shares in the Standard & Poor's 100-stock index, reported a 10.5% annual return during the previous 17 years. Even at the end of November 2008, amid a general market collapse, the same fund reported that it was up 5.6%, while the same year-to-date total return on the S&P 500-stock index had been negative 38%.
Madoff investment scandal | Sales methods
Sanchayita Chit Fund Scam was a major financial scam caused by the collapse of a Ponzi scheme. The scam was unearthed in 1980 and it affected over 1.31 lakh(s) of people in West Bengal, India.
Sanchayita chit fund scam | Introduction
Remarkably, during his various prison terms, Ponzi continued to receive Christmas cards from some of his more gullible investors, as well as requests from others to invest their money—from his prison cell. There were efforts to have him deported as an undesirable alien in 1922.
Charles Ponzi | Massachusetts
Opposition parties questioned the effectiveness of the scheme in dampening inflation (running at 7% at its peak) and also the timing of the maturities, which they claimed would benefit the government at the 2007 general election.
Special Savings Incentive Account | Criticisms
Madoff's fraudulent investment scheme drew on these funds to lure over 13,500 individuals and charities to his Ponzi scheme. She continued to socialize with the Madoffs after Levy's death. In December 2008 a 68-year-old friend, who invested her life savings with Madoff, telephoned Dell'Orefice to inform her that she too had been bankrupted by the scheme. Dell'Orefice said, "For the second time in my life, I've lost all of my life savings."
Carmen Dell'Orefice | Financial losses
In fact, the creditors did not recover any money through bankruptcy proceedings, as Jones had heavily mortgaged three of the properties to keep his Ponzi scheme afloat.
Earl Jones (investment advisor) | Ponzi scheme
In his absence, the Ponzi scheme unravelled. On 17 April, around 600 collection agents claiming to be associated with Saradha Group assembled at the headquarters of TMC and demanded government intervention. Despondency quickly spread across Bengal. A Times of India interviewee said, "'The entire Dakshin Barasat today looks like it was hit by a cyclone. Every home has a bankrupt depositor or a fugitive agent. People who were once friends became enemies. Happy households became miserable. Students stopped going to school. Traders lost interest in opening shutters. There is a sense of treachery that has replaced the warmth of a neighbourhood.
Saradha Group financial scandal | Collapse
The first fraud related to the system occurred when an elderly woman in the Kantō region was defrauded of several million yen.
Individual Number | Fraud
The company has been accused of operating a Ponzi fraud scheme, using the money from new investors to pay the returns on previous investments. Many of the approximately 150,000 investors are pensioners for whom investing their savings in rare stamps appeared a more attractive option than placing them in a lower-return bank savings account. Afinsa was not a financial institution. Contrary to equity investment, tangible investments are not protected by a mandatory warranty fund under Spanish law (available only to registered financial institutions, which allowed the victims of the earlier Banesto and Gescartera scandals to recover a small part of their assets).
Afinsa | Fraud allegations
Wealth Partaking Scheme (; ) is a cash disbursement policy to holders of a Macau Resident Identity Card by the Macau Special Administrative Region since 2008. The main purpose of the scheme is to share the results of the region's economic development with its people and help mitigate the effects of inflation.
Wealth Partaking Scheme | Introduction
In two federal indictments, Ponzi was charged with 86 counts of mail fraud and faced life imprisonment. At the urging of his wife, Ponzi pleaded guilty on November 1, 1920, to a single count before Judge Clarence Hale, who declared before sentencing, "Here was a man with all the duties of seeking large money. He concocted a scheme which, on his counsel's admission, did defraud men and women. It will not do to have the world understand that such a scheme as that can be carried out ... without receiving substantial punishment." Ponzi was sentenced to five years in federal prison.
Charles Ponzi | Prison and later life
With the assistance of people like Speaker of the House Jim Wright and the Keating Five, he was able to convert Lincoln Savings and Loan Association into a Ponzi scheme, making millions for himself, while suppressing the investigative and regulatory functions of the FHLBB. Eventually, the Ponzi collapsed, as all Ponzis must, but with a massive cost to the taxpayers and unsecured investors. Control fraud can also occur in a political situation, for example by the leader of a country who can use their position to embezzle public funds and turn the country into a kleptocracy. For example, the post-Soviet republic of Azerbaijan.
Control fraud | Examples
When taxes exceed benefits, the federal government lends itself the excess in return for an interest-paying bond, an IOU that it issues to itself. The government then spends its new funds on unrelated projects such as bridge repairs, defense, or food stamps. The funds are not invested for the benefit of present or future retirees.
Social Security debate in the United States | Claims of pyramid- or Ponzi-scheme similarities
Under the scheme, the cost of capital works included in the plan was reimbursed and an annual payment was made to the participant.
Tir Gofal | The scheme
"If you let me into my office, I guarantee I could get each of you a check." Walters told prosecutors and federal Judge Emmet Sullivan before he sentenced her to 17-and-a-half years in prison.' The fraud scheme of Harriette Walters has been the subject of academic and professional publications. Jacoby, Loringo, and McCallum describe the mechanics of the fraud scheme together with some informative analytics looking at the amounts over time. The authors then review the importance of internal controls and also review the control activity deficiencies that allowed the proceeds of the fraud scheme to exceed $48 million.
Harriette Walters | Introduction
Victims who decide to sue Madoff or third parties, believing they might have the possibility of some recovery, may still deduct 75 percent of their investment. The deduction will not be subject to the limitations on deduction of itemized deductions. Any loss exceeding current income may result in a net operating loss, which can be carried back, at the taxpayer's election, 3, 4, or 5 years, with any loss still remaining carrying forward 20 years. These rules apply to all Ponzi schemes where there has been a federal or state indictment of the lead promoter. Alternatively, victims may choose to file a refund claim for the full amount of their investment, including fictitious earnings on which they previously were taxed, but such claims will be subject to the standard rules for theft losses.
Recovery of funds from the Madoff investment scandal | Taxes
Note: Any codice_4 URI except codice_6 and codice_17 redirects to codice_18.
About URI scheme | Konqueror
Debbie will be putting her Dingle skills to maximum use as she prepares to set her plan in motion. "Her initial target is Dom, but once it becomes clear Debbie will stop at nothing in order to get her way, Cain and Charity start to wonder whether their daughter might be out of control." Webb commented on her character's new appearance, during the scheme: She becomes very business-minded, almost overnight. She suddenly goes through this massive change, to her looks and her hair. "It's all about earning money for the kids. She's determined that no-one will ever be able to screw her over again." "She's watched her mum and dad do what they want and get what they want for years.
Debbie Dingle | Get-rich-quick scheme
(The depository had never heard of Wilson.) As with all Ponzi schemes, new invested money was instead used to pay earlier investors and keep the scheme alive. Besides time served, his sentence requires restitution of $57,401,009. A web site has been set up to assist victims of the Wilson scheme in making claims, as well as providing news and information. Several investors who received unearned profits were sued to retrieve the money. In 2014 Wilson received an additional six months on his prison sentence due to attempts to hide assets that involved his brother and ex-wife.
Ron Wilson (American politician) | Investment scandal
In his pleading allocution, Madoff admitted to running a Ponzi scheme and expressed regret for his "criminal acts". He stated that he had begun his scheme some time in the early 1990s. He wished to satisfy his clients' expectations of high returns he had promised, even though it was during an economic recession. He admitted that he hadn't invested any of his clients' money since the inception of his scheme. Instead, he merely deposited the money into his business account at Chase Manhattan Bank. He admitted to false trading activities masked by foreign transfers and false SEC returns. When clients requested account withdrawals, he paid them from the Chase account, claiming the profits were the result of his own unique "split-strike conversion strategy".
Madoff investment scandal | Plea proceeding
The Rose Valley financial scandal or simply Rose Valley Chit Fund Scam was a major financial scam and alleged political scandal in India caused by the collapse of a Ponzi scheme run by Rose Valley Group.
Rose Valley financial scandal | Introduction
Ara Keshishyan and accomplices opened CitiBank checking accounts, funding them with an initial balance. The group then traveled to various casinos and all made large withdrawals from bank kiosks simultaneously, exploiting a glitch that allowed them access to multiple times the funds of their initial balance. After garnering a sizable sum of money, allegedly illegally, from cash-advance kiosks, the suspects went on gambling sprees at casinos. Some casinos gave them free rooms after mistaking them for people who spent a lot of money legitimately. The gang reportedly also kept each individual withdrawal below $10,000, which is the threshold at which casinos must report the transaction to federal authorities.
Gone in 60 Seconds (bank fraud) | Working scheme
This scheme however is unsuitable for business owners who maintain free internet connections as incentive for customers. It would then be the responsibility of the business owner to monitor his or her customer's internet use.
Copyright alternatives | Where does the money come from
She claimed that she was merely doing the same thing she had been doing for over 40 years–bolstering evidence that Madoff began his Ponzi scheme far earlier than 1991.
Participants in the Madoff investment scandal | Annette Bongiorno
U-Vistract is considered by many to be a Ponzi scheme. The founders have stated that the plan has always been to back the assets of the plan with the in-ground natural resources, including copper, silver, gold, zinc and other products.
U-Vistract | Description
He would have had to nurture the Ponzi scheme daily. What happened when he was gone? Who handled it when somebody called in while he was on vacation and said, 'I need access to my money'?" "Simply from an administrative perspective, the act of putting together the various account statements, which did show trading activity, has to involve a number of people. You would need office and support personnel, people who actually knew what the market prices were for the securities that were being traded. You would need accountants so that the internal documents reconcile with the documents being sent to customers at least on a superficial basis," said Tom Dewey, a securities lawyer.
Madoff investment scandal | Investigation into co-conspirators
By way of example:
Single Payment Scheme | Scheme details
An exception is codice_6, which is not translated.
About URI scheme | Introduction
Contemporaneous English-language publications such as "Harper's Weekly" referred to it as the "Spitzeder swindle". In her doctoral thesis, Hannah Davies recounts the case of Johann Baptist Placht, who in 1874 was indicted for running a Ponzi scheme in Vienna and notes that contemporaries compared his business model to Spitzeder's. Unlike Placht and other fraudsters, Spitzeder never made claims of investing the money and explicitly gave no securities, which paradoxically led customers to trust her more. By October 1871, the proprietor of the hotel in which she was living and working was no longer willing to tolerate the customer traffic. Spitzeder moved into the house at No.
Adele Spitzeder | Growth of business
On July 19, 2011, Vennes was charged with eight counts of securities fraud, six counts of wire fraud, three counts of money laundering, two counts of mail fraud, three counts of bank fraud, and two counts of making false statements on credit applications.
Frank Vennes | Tom Petters Ponzi scheme
Critics have asserted that the funding mechanism of Social Security's pay-as-you-go funding mechanism has similarities with an illegal Ponzi scheme, where early investors are paid off out of the funds collected from later investors instead of from profits from business activity. In particular, they describe a sustainability problem that they say happens when the number of new contributors declines. William G. Shipman of the Cato Institute argues: In common usage a trust fund is an estate of money and securities held in trust for its beneficiaries. The Social Security Trust Fund is quite different. It is an accounting of the difference between tax and benefit flows.
Social Security debate in the United States | Claims of pyramid- or Ponzi-scheme similarities
Despite the warnings of the International Monetary Fund, Sali Berisha defended the schemes as large investment firms, leading more people to redirect their remittances and sell their homes and cattle for cash to deposit in the schemes. The schemes began to collapse in late 1996, leading many of the investors to join initially peaceful protests against the government, requesting their money back. The protests turned violent in February 1997 as government forces responded with fire. In March, the Police and Republican Guard deserted, leaving their armouries open. These were promptly emptied by militias and criminal gangs. The resulting civil war caused a wave of evacuations of foreign nationals and refugees.
Albania | Fourth Republic
Marsha is placed under arrest.
Marsha's Scheme of Diamonds | Plot synopsis
Some journalists, economists, and the central bank of Estonia have voiced concerns that bitcoin is a Ponzi scheme. In 2013, Eric Posner, a law professor at the University of Chicago, stated that "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion." In 2014 reports by both the World Bank and the Swiss Federal Council examined the concerns and came to the conclusion that bitcoin is not a Ponzi scheme. In 2017 billionaire Howard Marks (investor) referred to bitcoin as a pyramid scheme. On 12 September 2017, Jamie Dimon, CEO of JP Morgan Chase, called bitcoin a "fraud" and said he would fire anyone in his firm caught trading it.
Economics of bitcoin | Fraud concerns
Such training material is typically in the form of e-books or training CDs. These schemes rarely work since the material sent to victims is frequently just basic or intermediate marketing material that is neither secret nor a guarantee to making a lot of money online. Often, the initial materials include heavy promotion of expensive seminars or classes, with the implication that not purchasing these items means the reader is not "serious" or "ready to make money". Sometimes buying the materials subscribes the purchaser to a newsletter (or other communication) whose cost is automatically deducted from the bank account used to make the purchase each month; typically this condition is buried in the fine print, and cancelling the subscription is extremely difficult.
Get-rich-quick scheme | Online schemes
Early in his career, con man Charles Ponzi rented a room rented an office on Court Street, above the Puritan Trust Company. From that office, he hatched his first scheme, which involved stealing 5,387 pounds of cheese, valued at nearly three thousand dollars. Ponzi avoided jail due to a court clerk misspelling his name as "Charles Pouzi," but his good luck ended shortly afterwards; Tremont Trust bought the Court Street building, and Swig wanted the swindler out of his new building. Ponzi and Swig's interactions did not end there. Once Ponzi's infamous scheme got started, he began keeping a large portion of his assets in Tremont Trust.
Simon Swig | Charles Ponzi