World's Greatest Con Why Do We Call It A Ponzi Scheme?
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Nov 27, 2025 Explore the audacious rise of Charles Ponzi, a boy from Italy who turned a financial scam into a lasting legacy. Learn how the term 'Ponzi scheme' became synonymous with fraud, shaping our understanding of scams. Discover the mechanics behind this infamous scheme, where the promise of huge returns attracted desperate investors in postwar Boston. From his early brushes with crime to his dramatic collapse and public trial, Ponzi's story unveils the fine line between ambition and deception.
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From Immigrant Hustle To Small-Time Scams
- Charles Ponzi arrived in North America with almost nothing and drifted through low-wage jobs before finding work in banks and factories.
- His early failures, arrests, and time in Canada set the stage for later schemes and risk-taking.
Momentum Masquerading As Profit
- A Ponzi scheme is essentially robbing Peter to pay Paul using new investors' money to pay earlier investors.
- Its apparent legitimacy depends entirely on continuous new investor inflows and visible payouts.
The Coupon Story That Fueled The Fraud
- Ponzi told investors he doubled money in 90 days by arbitraging international reply coupons, despite logistical impossibilities.
- He opened the Securities Exchange Company, paid early investors with later funds, and used publicity to scale rapidly.
