Ponzi scheme

Definition

A fraudulent scheme where earlier investors are paid with the money taken from new investors, giving the impression that the scheme is a viable investment.

Etymology

Named after con artist Charles Ponzi (1882–1949), who famously conducted a pyramid scheme in North America in the 1920s.

Example Sentences

• "Bernard L. Madoff, the one-time senior statesman of Wall Street who in 2008 became the human face of an era of financial misdeeds and missteps for running the largest and possibly most devastating Ponzi scheme in financial history, died on Wednesday at the Federal Medical Center in Butner, N.C. He was 82."
• "Now, a long-running Ponzi scheme requires a narrative — and the narrative is where crypto really excels."