Ponzimonium How Scam Artists Are Ripping Off America Color

In December of 2008, the world learned that legendary investment guru Bernard Madoff made-off with an estimated $50 billion in what was called the "Mother of all Ponzi Schemes." Ponzi schemes, named after Charles Ponzi, are scams in which early "investors" are given supposed returns paid through funds provided by later investors. Typically, an investment is made and then some "profits" are paid out, prompting the investor to assume that his or her money has increased in value. In actuality, the perpetrators of these schemes-Ponzi, Madoff, or the others described in this book-take the money for themselves. The legal term for this kind of taking is "misappropriation." As new investors enter the fraud, supposed returns are offered continually to initial investors, and many times are accompanied by fake account statements. This continues until new money stops flowing in and the investors want their money back. During the 2008 economic downturn, people needed their money back at the same time that there were no new investors. Many "house of cards" scams have fallen and the perpetrators of the swindles have been caught. Charles Ponzi ran these types of scams in the U.S. until he was deported to Italy, his birth-place, in 1934 as an "undesirable alien."