Ponzi Scheme is a fraudulent investment operation
where the operator, an individual or
organization, pays returns to its investors
from new capital paid to the operators by
new investors, rather than from profit earned
through legitimate sources. Operators of
Ponzi schemes usually entice new investors
by offering higher returns than other
investments, in the form of short-term returns
that are either abnormally high or unusually
consistent.
Ponzi schemes occasionally begin as
legitimate businesses, until the business fails
to achieve the returns expected. The business
becomes a Ponzi scheme if it then continues
under fraudulent terms. Whatever the initial
situation, the perpetuation of the high returns
requires an ever-increasing flow of money
from new investors to sustain the scheme.
The scheme is named after Charles Ponzi ,
who became notorious for using the technique
in 1920.
The alleged crash of MMM in Nigeria
affected every other Ponzi scheme in
Nigeria as people became skeptical
about investing in the other schemes.
Those who were about investing
reclined into their shells and held on to
their money as they were unsure if the
invested amounts will ever be recorded.
The recent news we have for your digest is of a Ponzi scheme owner (name withheld),an engineering student of a renowned higher institution in Nigeria being convicted of defrauding a large number of people a huge sum amounting to thirty million naira. The said fraudster is believed to be at large at the moment, and his bank account frozen. The site used for this fraudulent act is believed known as www.doublepay.com
Keep up with us for more updates on the matter.
