Ponzi scheme

noun

Pon·​zi scheme ˈpän-zē- 

: an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks

Examples of Ponzi scheme in a Sentence

Recent Examples on the Web

Similarly to how no one advised investors to avoid stocks after Bernie Madoff’s Ponzi scheme, the usage of crypto to perpetrate scams and frauds doesn’t mean everyone should shun crypto. —Laura Shin, TIME, 29 Oct. 2024

One is the Ponzo illusion (not to be confused with a Ponzi scheme, which is a financial illusion). —Phil Plait, Scientific American, 18 Oct. 2024

Al Pacino has opened up about having to make drastic career changes at one point in his life after losing all his money in a Ponzi scheme. —Carly Thomas, The Hollywood Reporter, 17 Oct. 2024

What clients, online sleuths and ultimately law enforcement found was essentially a Ponzi scheme, prosecutors said. —Terry Castleman, Los Angeles Times, 11 Oct. 2024

Word History

Etymology

Charles Ponzi †1949 American (Italian-born) swindler

First Known Use

1920, in the meaning defined above

Legal Definition

Ponzi scheme

noun

Pon·​zi scheme ˈpän-zē-ˌskēm 

: an investment swindle in which early investors are paid with sums obtained from later ones in order to create the illusion of profitability

Etymology

Charles A. Ponzi (ca. 1882–1949), Italian-born American swindler