Ponzi Scheme

A Ponzi scheme is a fraudulent investment scheme that pays high rates of return to the investors. The Ponzi scheme generates returns for current investors by acquiring new investors. This scam actually yields the promised returns to investors as long as there are more new investors. The scam can run for some time because investors appear to be making the promised return. The fact that investors appear to be getting the returns they were promised will encourage more people to put their money in the scheme.

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