Texas Ponzi Scheme Attorney
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A Ponzi scheme is an illegal investment campaign in which fraudsters recruit investors under the premise that they will receive massive returns quickly. The schemers fabricate marketing plans, generally with technical jargon unfamiliar to potential investors and, as more investors participate in the seemingly legitimate plan, their money goes to pay early investors rather than being invested. In a Ponzi scheme, the fraudster interacts with all participants and uses one participant's investment to pay returns to others.
Ponzi schemes are named after Charles Ponzi, a 1920s fraudster. The Italian moved to the United States and tricked New Englanders into investing in a stamp scheme, telling them he would buy stamps in Italy and sell them in the U.S. for a higher value.
After about $15 million was invested, Ponzi had only purchased about $30 worth of stamps. He merely used new investors' money to pay out early investors. He had a mansion and lived luxuriously, drawing attention to himself, which resulted in the public's interest. Ultimately, he was investigated, his public relations agent denounced him in The Post, and he was arrested. Ponzi, however, did not invent the scheme; it is named after him because his case was the first well-known case in the U.S.