A fraud disguised as an investment opportunity, in which initial investors and the perpetrators of the fraud are paid out of funds raised from later investors, and the later investors lose all funds invested.
Origin of Ponzi schemeAfter Charles Ponzi, (1882?–1949), Italian-born speculator who organized such a scheme (1919–1920).
(plural Ponzi schemes)
- A Ponzi scam.
From Charles Ponzi, who famously conducted a pyramid scheme in North America in the early twentieth century.