Ponzi Schemes Explained in One Minute The Ponzi Scheme, named after its mastermind Charles Ponzi, is one of the most infamous swindles in history. It was a pyramid scheme that operated in the early 1920s and bilked millions of dollars from investors. Ponzi, an Italian immigrant, promised his investors high returns in a short amount of time, often 50% in just 45 days, through his investment scheme. He claimed to be buying and selling international reply coupons, which were used to purchase postage stamps for foreign mail. Ponzi's scheme was incredibly successful and attracted large amounts of investment from both individual and institutional investors. People were enticed by the prospect of high returns in a short amount of time, and the idea of making money with little effort. Ponzi used the money invested by new investors to pay the returns promised to earlier investors. This gave the illusion that his scheme was actually profitable and that returns were being generated through h...