NAME: Ponzi scheme
NATURE: illegal
SOLE PURPOSE: investment
PROFIT GENERATION: new investors and increase in investment fund
ENTRY: payment of investments
PRODUCTS/SERVICES: None
OPERATIONS:
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The promoter(fraudster) promises high investment returns with little or no risks involved
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all investments are directed to the promoter
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Dividends are paid to initial investors using the funds of subsequent investors
INTERACTION WITH PROMOTER: Direct
COLLAPSE: Depends on the gullibility of the investors
BENEFICIARIES: The promoter
LOSERS: investors
REFUND: None
Related Posts: How to spot a Multi level marketing (MLM) plan ; How to spot a pyramid scheme
Categories: Scams
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