Term of the Day Ponzi scheme Scam in which gullible public is enticed with the promise of very high returns in a very short time, but is based on paying off the early 'investors' from the cashfrom (hopefully ever increasing number of) new 'investors.' The whole structurecollapses when the cash outflow exceeds the cash inflow. The originators of thescheme, however, usually disappear with large sums a few days before thecrash. Named after Charles Ponzi (1882-1949), an Italian immigrant to the US who, during 1919-20 collected more than fifteen million dollars from some 40,000 eager people by promising to double their investment in 90 days. See also pyramid scheme. Learn more about this term Usage Example I should have known the investment opportunity was too good to be true, after investing $30,000 and promised returns that were at least double my investment, the company collapsed and I was a victim of a Ponzi scheme.   Featured Article New Age Marketing with Social Media The World Wide Web has changed the way companies advertise and market their businesses. The days of newspaper and expensive yellow page ads are over... Read this article   Voice Your Opinion If every day was one hour longer, how would you spend the extra time? --> If every day was one hour longer, how would you spend the extra time?   Take us with you! Download the BusinessDictionary app today.