Charles Ponzi (Ponzi scheme)

A Ponzi scheme is a fraudulent investment scam where returns to early investors are paid using the capital from new investors, rather than from legitimate profit. The scheme relies on a continuous influx of new money to sustain payouts, giving the illusion of a profitable business. Eventually, when new investments slow down or the organizer is unable to attract enough funds, the scheme collapses, leaving most investors with significant losses. Named after Charles Ponzi, who became infamous for using this method in the early 20th century, it is fundamentally unsustainable and relies on deception.