Ponzi Scheme Research Paper

The foundation of the Ponzi scheme can not be singularly tracked, but the man who made it famous and forced it towards the national discussion was Charles Ponzi. The purpose of the Ponzi scheme is to defraud investors in order to get rich quick. The idea of the scheme is for a singular owner to receive investments from the general population. The owner will receive an initial investment of a sum of money from different investors. The owner will then have a great supply of money, and they will start paying the beginning investors a high return amount. The owner of the scheme is juggling the money between investors while no real money is being made. It looks like the investors are getting a solid monthly return when it actuality they are just
The scheme becomes unraveled when people stop investing in the fraudulent company. After the scheme is found out, the investors have lost all their money and the offender has devastated the victim’s lives. Ponzi schemes affect people of every race, gender, and wealth status through destroying the financial lives of the people who invest in the company, and dismantling the personal lives of the victims.

Ponzi schemes are intentionally created to fraud investors in order for the perpetrator to receive as much “dirty money” as possible. Those who invest unknowingly in these schemes can lose hundreds of thousands of dollars, or even millions. People invest their entire life savings in these accounts because of the high returns and faith in the leader of the business. Robert Chew, an investor in the Bernard Madoff scheme, lost 1.2 million dollars in the scheme and said that “in the topsy-turvy world of investment, we were quietly, richly safe. Until the call”(Robert Chew). One phone call financially decimated this one investors life, and he was one of many who were duped by a Ponzi scheme. He was forced to start his life over and he had no
In Bernard Madoff's scheme in 2008, the people who fell victim were “Small investors, institutions, hedge funds, global banks, pension funds — all fell victim to usual suspects: a smooth huckster and greed”(Robert Chew). Most global banks and institutions were hurt, but not destroyed by the actions of Bernard Madoff, but the small investors and pension funds were. People who had retired or were saving money for their kids' colleges had invested this money. This did not only affect those who invested, but also the families and children were victims of this one man’s terrible scheme. The perpetrators of these schemes are smooth talking liars who many people learn to trust with their money. A victim of a Ponzi scheme in 2007 said that the perpetrator “ looked us in the eye and said to my wife and I, ‘No one’s ever lost a penny with me, and no one ever will,’” Mr. Gleaves said. “He just blatantly lied.”(Theo Emery). This confidence alludes to those who are investing. The victims believe that the person has their best interests in mind, but in a Ponzi scheme, the perpetrator only has his own goals in mind. Almost every victim of a Ponzi scheme describes the owner as confident and smooth talking. This is a common trait used in order to dupe the victims into investing in their fake companies. There is no singular type of person who can fall victim to a Ponzi