Ponzi Scheme is false returns on an investment in order to get the confidence of an investor. A scam artist may pay money out of their own pockets in order to convince an investor to give them more access to their portfolio. This particular scam relies on your natural desire to make easy money. This particular scam is named after Charles Ponzi who all though was not the first, was possibly the worst. At the beginning of the century he swindled around $500,000 from investors, and was eventually caught and spent three and a half years in prison. The scam has many variations and may look very different, here is some things to look for:
- Any promise of a return higher than 0.1% return per day.
- A request for a much higher investment after an initial successful campaign.
- You have never heard of the investment company
The bottom line with investing and letting anyone have access to your portfolio is do your research. Scam artists are very clever and charming and can fool even savvy investors.