Charles Ponzi Case- Don’t fall for it!

Charles Ponzi schemes

As the internet world is growing daily, so are the ways how fraud schemes work. Much probably some of you have already fallen prey of Charles Ponzi scheme, some others are probably dealing with one and many others are endangered to fall prey of one in the future.

Today I decided to bring to attention one of the oldest fraud schemes. It dates back in the 1900s. Very old.

It all started with Charles Ponzi from Boston, Massachusetts, offering people enormous amount of return for their investments – up to 50%. The same fraud is being used to this day and one nobody is safe from. Let’s have a look on how this scheme works and how to protect yourself from this scam activity.


Ponzi Scheme – How Does It Work

The way how infamous Ponzi Scheme works is well-known to most of us. It all starts with a fake “group” inviting investors with the promise to get high return. The stakes they promise are astonishing high. Amounts those not able to be offered by normal or traditional business negotiations.

That is their best bait.

They keep the so-called company alive simply by getting money from the first investors, then paying the promised amount by the investing of the new ones. The circle goes on as the older investors have no real reason to doubt as they are provided proper checks in their requests.

Ponzi Scheme example.
Example on the “Pyramid of Ponzi”

Upon getting the first checks and happy with the return, most of the older investors keep on investing, even at higher amounts. This allows the “company” to keep the circle alive even though by NOT A SINGLE real business profits from outside.
This goes on till they decide they had enough and decide to leave or by the absence of new investors. The latter causes the circle to get deformed and the pyramid ruined.

” Rob Peter to pay Paul” – is what this scheme is all about. Simple as that.

Learn How To Avoid Scams Online

Ways To Prevent Ponzi Schemes

As any other scam, Ponzi is something you don’t want to happen in your life. Below I have listed some of the most effective ways this scheme functions so you can recognize it.

  • Overstated return promise – pay close attention to any company that promises you exaggerated promises on return when investing your money, and that pretty fast.
  • Choose carefully people with whom you invest – before making an investment it is very recommended for you to be diligent and know the people you are in contact with. No relationship can be started without trust. No trust can be developed with a fraudulent.
  • Consult an adviser – have a talk with a professional financial expert asking for his opinion over the company and your investment plan overall. It is true that sometimes we can save ourselves tons of money and time simply by being more careful.


    Whether unemployed or you want to start investing on your own career, it is wise indeed to be careful and embrace the ways that can protect you from falling prey of a scheme.

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