Definition for : Ponzi scheme

A "Ponzi scheme" or "Pyramid scheme" is a fraudulent mechanism whereby a person (or group of persons) wilfully promise(-s) exceptionally high returns, and simply use(-s) the amount invested by new entrants to fund the "exceptional" returns paid to the first entrants. The scheme collapses when Investors stop bringing new money in the structure, and therefore the exceptional returns suddenly vanish.

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