Controversy: The Ponzi Scheme

Have you ever wanted to be able to make millions of dollars while deceiving hundreds or thousands of people? If you answered yes to that question, then it seems like you’re looking to start running a Ponzi scheme. A Ponzi scheme is an unethical and illegal way to get a large amount of money from one or more people through deceit and thievery. Ponzi schemes have been around for over a hundred years, and they continue to cheat people out of their money, even to this day. A Ponzi scheme starts when a schemer gets loans and investments to start his business, usually from friends or family members. (Benson, 2009, p.20) The schemer promises his investors high interest rates within a smaller than usual time frame. The only problem is that the schemer

After his second jail sentence, Ponzi went to Boston, Massachusetts to conduct the scheme that would lead to all the schemes after that to be named after him. He told his clients that he would make a 50% profit in 45 days, and 100% profit in double that time. Ponzi told his clients that he was buying “discounted postal reply coupons in other countries and redeeming them at face value in the United States” (Petsko, 2009, p.1).This method is called arbitrage, and while it is not illegal, it can be seen as unethical and greedy to some

When his operation had become very successful, he was making about $250,000 a day, which is 2.9 million today (Petsko, 2009, p.2). His scheme ended when the Boston Post published a report on his scheme on August 2, 1920, and by August 10 of the same year, federal agents shut down his company, and he was arrested by August 12. 17,000 people lost millions of dollars in under nine months thanks to Ponzi (Petsko, 2009,