![Ponzi Scheme](https://img-cdn.financeunlocked.com/headers-images/financeunlocked/3.jpg?ik-sdk-version=javascript-1.0.3)
Ponzi Scheme
A Ponzi scheme is a fraudulent investment scheme named after Charles Ponzi who created such a scheme in 1920. They promise strong returns but these are generated from money attracted from subsequent investors. The supposedly strong returns help attract this new money but the schemes run into difficulty when they can no longer attract new money and the fraud is revealed.