Ponzi

[pon-zee]
noun
a swindle in which a quick return, made up of money from new investors, on an initial investment lures the victim into much bigger risks.
Also called Ponzi game, Ponzi scheme.


Origin:
after Charles Ponzi (died 1949), the organizer of such a scheme in the U.S., 1919–20

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World English Dictionary
Ponzi scheme (ˈpɒnzɪ)
 
n
a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit
 
[After Charles Ponzi, who famously perpetrated such a scheme in the United States of America in the early 20th century]

Collins English Dictionary - Complete & Unabridged 10th Edition
2009 © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins
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Etymonline
Word Origin & History

Ponzi scheme
investment scam by which early investors are paid off from the contributions of later ones, 1957, in ref. to Charles Ponzi, who perpetrated such a scam in U.S., 1919-20.
Online Etymology Dictionary, © 2010 Douglas Harper
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Example sentences
The simple fact is that the global credit bubble and its myriad of facets is a ponzi scheme of unprecedented proportions.
If its based on population increases its a ponzi scheme that will inevitably collapse.
The ponzi scheme organizers often solicit new investors by promising and promising huge returns.
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