What is a Ponzi scheme.?

A Ponzi scheme is when you solicit investors in a "scheme", and use their investment to pay dividents to previous investors. There is no other source of income, except new investors. The first few people in on the scheme make money, but the people at the bottom of the period, when the scam artist runs out of investors, lose everything.

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A Ponzi scheme is an illegal pyramid scheme that relies in new investors to payoff investors near the base of the pyramid, Those that invest late and are nearer the top will never see promised payment or their money again.

A Ponzi scheme is basically a scam. It is an operation designed to entice new investors with high returns but there is actually no return. The money that is invested goes to "pay" the earlier, first investors. The scam artist generally then disappears. These are also known as pyramid schemes. There are several "companies" out there that are Ponzi schemes but have been able to accurately disguise themselves as legitimate businesses. Unfortunately because of loopholes people are still being suckered into these so called businesses.