Ponzi Schemes : The Greatest Crimes That People Commit Essay

Ponzi Schemes : The Greatest Crimes That People Commit Essay

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There are many crimes in America that people would consider to be major crimes. Some may say murder rape or child abuse but I think Ponzi schemes are the greatest crimes that people commit. A Ponzi scheme uses "investor money to find a productive business venture the con orders channels the proceeds from new investors to pay interest to only earlier ones"( Basu, 2014 pg.1). Ponzi schemes can come in many different shapes and sizes. Those types of disguises makes scheme hard to detect and make it hard for people to take legal actions against a company.
The Ponzi scheme was first done by Carlo "Charles" Ponzi in New England in 1920. Carlo Charles Ponzi was born on March 3, 1882 in Lugo Italy. He came to Boston in the late 1903. Charles Ponzi started his schemes in New York in December 1919. He told investors to invest and foreign postage coupons and that they can make a 50% profit in 45 days. He told them he would buy coupons overseas because they are cheaper but cost more in the United States. Ponzi was a college dropout and he targeted people who were recovering from war world 1 and wanted the wealth that was being generated around them. While in the United States he was arrested in Canada and put into prison for forging a signature. It was also the special assistant to the warden. When he was released from prison he lured the middle class into giving him money with and with his scheme he ruined families and brought them 6 Boston banks. Finally he was deployed Italy after serving time in federal and state prisons and his run in with the law too many times. On January 18, 1949 he died in poverty in Rio de Janeiro.
Ponzi schemes come in different way some are basic and some are more elaborate where it is hard to take legal action...


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...se new recruits pay to join the company and not on the sales of products to consumer, is a person required to buy lots of inventory and are they forced to buy other things they don’t want or need just to stay in good standing with the company (Jhaveri, 2014).
When looking at an investment there are questions a person can ask himself or herself. Some of the questions that they can ask “is the seller licensed? Is the investment registered? How do the risks compare with the potential rewards? Do I understand the investment? Where can I turn for help?” (U.S Securities and Exchange Commission, n.d).The Securities and Exchange Commissions are an organization that is in charged with “shutting down fraudulent Ponzi’s”. In 2010 on a law was passed called Dodd-Frank. The Dodd-Frank act deals with “tracking the myriad forms that these pyramid schemes take” (Basu, 2014 p.5).


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