Ponzi schemes are such fraudulent investments that pay back investors from their own money rather than from any earned profits. While these are schemes to lure investors by instant returns, these are actually swindles to trap them for the benefit of the businesspersons launching them. Since humans get attracted to shortcuts, they tend to fall into such traps, making the crooks richer. Check out a few of the most famous Ponzi scammers that have badly trapped the public and even some celebrities.
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In 1920, this person is known to have started Ponzi schemes. He assured investors of up to 100% return on their investments in international postal coupons. Ponzi gained around $15 million from this fraud. He never purchased those coupons. After a year, the fraud was detected and he was finally sentenced to up to 9 years in prison. However, it was already too late for investors who could only recover around $5 million from him. Even after his sentence, Ponzi launched another fraudulent scheme that led him to jail again. He ultimately died penniless.
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WorldCom’s CEO, Bernard Ebbers took his company to heights in a very short time by acquiring several smaller firms. It led the company in debt. However, he kept on exaggerating the assets of the firm. Finally, the shareholders lost a whopping sum of $100 billion when the company shares fell down from $64 each to merely $1. Such false accounting operations caused the conviction of Bernard.
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This fraudster was sentenced for 50 years in 2010 after he was accused of money laundering and other conspiracies. His Ponzi scheme was worth a huge amount of $3.65 billion. As the CEO of Petters Group Worldwide, he collected money from investors for purchasing electronics to sell to retailers. However, he diverted this collection to simply pay other investors and support additional businesses of no concern to investors.
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This former NASDAQ chairperson ran one of the greatest Ponzi schemes worth $50 billion. While he initially paid back his investors with a decent annual return, it was only to gain their trust in his scheme. On the other hand, he was just paying his old investors with the fresh money. The scheme led many individuals, as well as organizations and banks to suffer. He was finally arrested in 2008 for this big fraud.
After communism ended, several pyramid schemes were launched in Albania. The surprising fact was that the government endorsed them. About two-thirds of the population invested in such schemes that collapsed in 1997. While the government was toppled on this issue, it led to the loss of around 2,000 lives.
Ponzi schemes are designed by some unscrupulous businesspersons who turn to wrong means of earning money in quick time. However, such schemes only end up in their loss, as well as the loss of thousands of investors who fall into their trap.