CHARLES PONZİ

Charles Ponzi is an Italian businessman and swindler. He moved to the USA in 1903 and became one of the most famous swindlers in the history of the USA with his ponzi scheme.

This ponzi scheme, which is known by many names such as ponzi scheme, ponzi game or ponzi system, is a system that aims to make high profits. It is a fraud system in which the investors are added to the system by pretending that there is production and the payment to the first investor is made with the money of those who join the system later. It is believed that there is any high-profit production, and new investors are tried to be included in this system by claiming that investors are paid for this high-profit production. When the participation is over, since there is no profitable production, new investors cannot be paid and the system collapses.

The Ponzi scheme begins when it attracts investors with complex plans and complex investments that promise extremely high returns with very little risk. These investors give their money thinking that they are investing in any production process. But there is no production in the middle. When the original investors need to be paid, the original investors' money is paid in the money given by the new investors. In other words, there is actually no production. There is only money circulation instead of production. In order for this to gain continuity, that is, to be sustainable, it must constantly find new investors. If new investors are not found, this scheme or order will be disrupted and everyone will understand that there is no production in fact.

According to the Ponzi scheme, those who are profitable are always the first to join the system. The reason why those who enter the system first are profitable is that they can receive the promised amount of money in the promised time. Let's imagine a pyramid and each newcomer is in the bottom layer of this pyramid. The receivables of the investors at the top are paid by the new investors at this lower level. However, as the pyramid grows, the amount that the main investors will receive increases. In other words, even if new investors come, the money of the original investors may not be paid. When this happens, the founders or managers begin to transfer the actual money to other accounts in a planned manner. In the meantime, there is a delay in the payments of the main investors who need to be paid. Investors at the top of the pyramid, on the other hand, do not lose with their capital and profits during the collapse period. Profitable money obtained from the system is obtained as a result of defrauding other people participating in the system. Although the Ponzi system seems to work logically up to a certain point, you need to constantly find new investors. If you cannot find it, the system you have installed will crash. It will turn out that you are a scammer.