Ponzi schemes, the most famous of the scams

Famous all over the world
Famous all over the world

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or an organization, pays returns to its investors by the paid-up capital of the new investors rather than by of profits made by the operation. Operators of Ponzi schemes attract usually new investors by offering higher yields than other investments, in the form of short-term returns that are either abnormally high or unusually stable.

Handsets Ponzi scheme sometimes begin with legitimate businesses, particularly when the company is unable to reach the expected returns. The company becomes a chain of Ponzi if she continued these fraudulent activities. Regardless of the initial situation, the perpetuation of high yields requires a stream steadily increasing money from new investors to support the pace of payments.

Ponzi L´Histoire

The scheme is named after Charles Ponzi, who became notorious for using the technique in 1920. The idea, presented in the novels (for example, 1844 novel Martin Chuzzlewit and 1857 novel little Dorrit by Charles Dickens), was actually made in real life by Ponzi scheme which, with its operation had so much money that he was the first to be known across the United States.

Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi was born in 1882 in Lugo in the province of Ravenna in Italy.

Ponzi comes to Boston the aboard the S.S. Vancouver. His remarks to a journalist from The New York Times, he had only $2.50 in his pocket, having lost all his savings in the game during the crossing. Note that many details of the life of Ponzi schemes come from his statements, which makes them subject to caution, given his sense of the fabrication. In Boston, he held several jobs, including one boy in a restaurant where he will be dismissed on the grounds of theft.

In 1907 to Montréal Ponzi learned d´un certain Luigi Zarossi how promise extraordinary d´interet rates. He learns that one of his compatriots, Luigi Zarossi, settled in Montreal and there has prospered through trade in cigars. Charles Ponzi left Boston for Montreal in July 1907 with a dollar in his pocket. Zarossi still has his cigar shop, rue Saint-Jacques; It has also set up a financial institution, the Banca Zarossi aimed at cash savings of Italian immigrants. To attract applicants, Zarossi offers 6% interest, while other banks offer only 2%. Ponzi is Gets a job in impersonating Charles Bianchi, a relative of the wealthy family Bianchi (completely fictitious family) in Italy. He entered as a cashier before assume more important functions. It quickly finds that Zarossi cannot offer a rate so high that drawing on even money new applicants, and that if all depositors demanding their money, it would be the bankruptcy. When in 1908, depositors begin to have doubts, Zarossi fled to Mexico with the crate, leaving his wife and children in Montreal.

Although it is possible that Ponzi could have played a role in fraud at Zarossi, no charges will be brought against him and this is the simple sum of $423,58, which earned him the prison: it comes one day at a former Zarossi customer Canadian Warehousing, steals a checkbook and is himself a cheque for $423,58 forging the signature of the Director of the Agency Damien Fournier. Unmasked, he was sentenced to three years in prison at St-Vincent-de-Paul prison. Twenty months after it is released, but in the ensuing months, he was again arrested for attempting to illegally enter Italian workers in the United States. He will serve a sentence of two years in a prison in Atlanta.

In 1919, in Boston he went then a d´oeuvre leader promising 30% in 40 days to investors and 240% annual. A pyramid scheme whose wingspan widely exceed the Banca Zarossi. He promised investors an interest of 50% in 45 days and 100% in 90 days. 40,000 investment and the bubble broke out in 1920. The amounts promised are different according to the sources.

Initial l´IDEE of Ponzi or its d´investissement support was a flaw of the system. This flaw was based on arbitration of international reply coupons for postage stamps that was viable in small amounts. However, he soon diverted investors ' money to make payments to investors earlier and itself.

The Universal Postal Union (UPU), which includes the postal administrations of the world since 1878, responded to the request of a universal postage stamp by the creation of international reply coupons October 1, 1907. An individual brings his country an international coupon at the price of 0.28 Franc (or its equivalent) and sent it to his correspondent, anywhere in the world. This recipient went in any post office where, against delivery of coupon, it received one or more stamps of his country, a value corresponding to the postage of a letter in international service (0.25 Franc or its equivalent). The difference of 0.03 Franc was used to cover the costs of compensation between the postal administrations, one having received all the money of the coupon, the other having sold a stamp without perception of money. As there was at that time a good stability of the parity of currency exchange, the system could operate without problem.

The output of the first world war and its financial consequences in the global economy totally shaken the system by observed frequent devaluations and the increase in postal rates which ensued. Postal administrations became deficient in these exchanges and had to take restrictive measures to the use of this service. Charles saw an opportunity and bought massively coupons, the deception was discovered when a person s´apercut qu´il expected to cover the system purchase coupon codes qu´il n ´en exists. Indeed the yield was feasible on a small scale.

But what makes it so exciting life of Ponzi c´est that Ponzi was sentenced to 5 years in prison in Boston. Of 3.5 years, he was released and tried again for flight under Act l´etat of Massachusetts. During the trial on appeal, Ponzi s´enfuit in Florida, where he tried to sell swamp land. A Florida Court recognized him guilty, but Ponzi then leave for Texas. Caught up, he was back to Massachusetts for his sentence.

When qu´il was released in 1934, the U.S. Government gave l´ordre of l´extrader in Italy where he lived for a time of petty theft, until Benito Mussolini, the leader of the country appointed to the finance section of the country which is an ideal location for a crook. Suspected fraud, he managed to escape a team of grosa arm and to flee to Brazil having took care to take a can in the cashier at the crossing.

He lived then normally, by making such translations. During the 1930s, he published his autobiography: The rize of Mr Ponzi. After health concerns which left him nearly blind, he died, ruined January 18, 1949 in a public hospital in rio.



The characteristics d´un Ponzi or pyramid selling

Typically, extraordinary returns are promised on the initial investment. The sponsor sells shares to investors taking advantage of a lack of knowledge of the investor or jurisdiction, or the use of claims as qu´une strategy of exclusive investment that must be kept secret to ensure a competitive advantage. The Ponzis pay yields first members using l´argent of future members without creating anything.

"Other names: other names:"Silver chain","Pyramid schemes","snowball","Ponzi pyramid», Spam C MMF», Spam "Make Money Fast", "Madoff", cavalry etc. ..

The Ponzi sometimes begin with operations with legitimate investment vehicles, such as hedge funds or in the case of ponzi stamp posts. For example, a hedge fund can degenerate into a chain of Ponzi if she unexpectedly loses money and developers, rather than admit their inability to meet the expectations, make false statements and (if necessary) generate fraudulent audit reports.

A wide variety of vehicles or strategies investment, generally legitimate, became the basis of Ponzi schemes. For example, Allen Stanford used Bank certificates of deposit to defraud tens of thousands of people. Certificates of deposit are usually low-risk and insured instruments, but the Stanford CD were fraudulent.

Initially, the promoter will pay high yields to attract more investors and retain existing investors by putting extra money. Other investors are beginning to participate, leading to a cascade effect. The 'return' to the initial investors is paid with the investment of new entrants, and not on profits.

Often, higher yields encourage investors to leave their money in the system, so that the promoter does not have to pay a lot for investors; It simply has to send statements showing how much they won. This maintains the l´illusion that the handset is an investment with high yields.

Proponents are also attempting to minimize withdrawals by offering new plans for investors, often there where money is frozen for a longer time, in Exchange for higher yields. The sponsor thus sees new streams of cash, investors are informed that they cannot transfer the money from the first plan for the second. If some investors want to withdraw their money in accordance with the terms of the contract, their requests are generally processed quickly, which gives the illusion to other investors that the Fund is solvent.

A pyramid scheme is a non-viable and often illegal business model that attracts members through a promise of payments or services to others in the system, instead of providing a real investment or sale of products or services to the public. These schemes exist for at least a century, variations exist in order to hide their true nature. Some plans of marketing such as multilevel marketing or governed advertising to shared revenues have also been classified as pyramid schemes.


In a pyramid scheme an organization requires individuals to join and make a payment. In Exchange, the Organization promises its new members a share of the money from each additional member they hire. The administrators of the Organization (those who are at the top of the pyramid) also receive a share of these payments. For administrators, the regime is potentially lucrative because they take advantage of people below l´argent.

These organizations rarely provide sales of products or services with real value. Without creating goods or services, the only way for a pyramid scheme to generate revenue is to recruit more members or to seek more money from current members. Finally, recruitment is more possible and the s´ecroule system.

System s´ecroule always, without new members who bring l´argent to pay withdrawals of alumni, indeed it must quickly more people than d´habitants in the world.

Quickly must be more d´investisseurs than people on Earth
Quickly must be more d´investisseurs than people on Earth, example with 6 people

A few scams that revolve:

The advertising networks have in common an insane performance + sponsorship = ponzi

The mail paypal classic

Hi all

Take 5 minutes to read this email, ca really worth it!

I wanted you to share a trick that I found via the Internet.

This is really not my custom to write this kind of mail but this is something that really seems to work and which allows to make easy money with only 5 euro's initial bet. (Instructions and detailed operation are in a zip file as an attachment, but read this first :))

All you need is an account with Paypal (www.paypal.com), the system which allows making its online purchase by paying with ease with his credit card. (For my part, I had a so…) and 30-40 min of your time to read the attached document. And after, you can see if it tempts you!

Free you to do what you want, but for my part I is involved because, at worst, if really ca not working as expected, I have lost 5 euros at most! But by reading the concept, you will see that logically and mathematically it works.

I contacted one or two people who are in the list (you will see this list in the concept which is attached) and they replied that ca actually walked and ca had the air of people like you and me :-).

It is possible to go from 5 euro to 5000 euros in a few weeks…

It is weighed this thing but it works! And 5 euros is that slab 🙂

This is…

You play (or not to play)

Summary of what to do: this is explained in the attached Word document but there is a lot of blabla then in a few words so that you understand:

  1. Have a PayPal account. If you do not have one, create it. It's free!
  2. Send 5 euros via PayPal on the email N ° 1 which is located in the attached Word document.
  3. Then delete this address N ° 1 and shift the other 4 addresses upwards, the N ° 2 becomes N ° 1, N ° 3 becomes no. 2, etc. to N ° 5, which becomes no. 4 and then you put your email address that you used for your PayPal account! You will be so positioned n ° 5, this is very important! If you want, you can copy paste the Word document and then update your address n ° 5.
  4. Then simply spread this Word document to a maximum of people (minimum 40). It is for this that if you know of other means of rapid broadcasts you can use. For example Peer to peer (bittorents links). You attach the enclosed files to a good video or tv series (not fake is it you please) or other music, what you think could be downloaded by many people, and you run a max. It is clear that less you publish more the probability of having lots of money decreases!

PS: If you want to contact someone to know if it works or get help to learn how to distribute your documents do not hesitate to contact one of the people located in the list of 5 emails from the Word document, like this you choose who you want to ask once again.

Do not hesitate, a mail it does not bite!

In fact the scammer has the 5 emails above you!

How to protect themselves?

Simply much common sense and a few reflexes.
Common sense, it is to say that by 2016, 10% yields are already huge and based on risk. When you are promised 20% or 50% guaranteed, you can forget.

Of more made the calculation over 5 years, you are promised nothing less than to become multimillionaire and even billionaire.

Scammers not conceal their packages the nickname obscure scientific explanations or business related wholesale (trading, voage etc)

A rampant pyramid Variant

In my opinion this resembles a creeping pyramid, c´est to say the members recruited relatives but n´arrivent faster, they give up and a place for a new vendor is available.


C´EST almost similar, just a system impossible to sustain, because once you have made the round of contacts and that only 2 people responded, you have more alternative and you find yourself forced to abandon then you have half of your subscription to repay and is replaced by a new Member d´ou the creeping pyramid because it moves but does not fundamentally change its structure.

The principle is the same except that the rampant pyramid is much slower and takes better in time (understand qu´elle s´ecroule slower)


What you may actually

In addition to losing your money there are much larger risks.

The attempt to gain money from abnormal and easy way, in particular leaving manipulate (social engineering), eventually lead to getting you ripped off (419 fraud…), does not make you a victim but an accomplice.

No person shall avail itself of his own depravity.

In a very good video documentary of the 05.02.2013 – facing the Internet mafia, there is, among other things, an interview of a woman sentenced for aiding and abetting active money laundering after being trapped in an engineering social operation.

But in addition, the pyramid (process says the "snowball" or the "silver chain") is prohibited in France since 1953 (Article L 122-6 of the Code of consumption 1 ° and 2 ° paragraphs). This text was supplemented by an act of 1 February 1995 (3 ° and 4 ° paragraphs) which specifies the prohibitions on sales channels. Since that date, a company which fails to comply with this regulation and allegedly illegal practices would be condemned.

Under French law, «it is forbidden to propose a person to collect memberships or to register on a list requiring her the payment of any consideration and in him doing hope financial gains resulting from a geometric progression in the number of persons registered or recruited» (art. L. 122-6 and art. L. 122-7 of the code of consumption) and "this prohibition is subject to penalties of fine or imprisonment. »

The correctional tribunal of Albertville for example sentenced to penalties of four to ten months in prison suspended 33 Savoyards who participated in a money game akin to a Ponzi pyramid, was learned from the Prosecutor's office.

These sentences for fraud, was accompanied by fines between 4,500 and € 20,000. Four other defendants were fined with simple fines.

Penalties for the offence of fraud

First of all, it should be recalled that the prescription of the scam is acquired after a period of three years from the day of the return of the coveted thing.

The maximum penalties for fraud are:

-For natural persons: 5 years ' imprisonment, €375,000 fine and ban or confiscation of certain rights.

-For legal persons: €1.875.000 fine as well as the penalties provided for in article 131-39 of the criminal code.

The attempt is punishable by the same penalties.

The penalties are raised to seven years in prison and €750,000 fine when the scam is carried out:

-By a person vested with public authority or a public service mission, in the exercise or on the occasion of the exercise of its functions or its mission (article 313-2 – 1 ° of the criminal code);

-By a person who unduly takes the quality of a person vested with public authority or responsible for a public service mission (article 313-2 – 2 ° of the criminal code);

-By a person who appealed to the public to the issue of securities or for fundraising purposes for humanitarian or social assistance (section 313-2 – 3 ° of the criminal code);

-To the detriment of a person whose particular vulnerability, due to his age, illness, infirmity, physical or mental disability or a State of pregnancy, is apparent or known perpetrator (article 313-2 – 3 ° of the criminal code).

The penalties are raised to ten years in prison and €1,000,000 fine where fraud is committed in organized band.

This want to say that if sponsor you what-qu´un you are liable of Delia d´escroquerie is organized band, if this bleaching is.

Money laundering


Money laundering is to conceal funds from illegal sources (drug trafficking, theft, fraud (including pyramid selling), selling weapons, robbery, tax evasion,…) by reinvesting them in legal activity (real estate, restoration, etc.). IT

The objective of the author of money laundering is to facilitate the false justification of the origin of these sums to the authorities. In practice, money-laundering "dirty money" may appear in the form of different mechanisms, as for example the establishment of false invoices between several companies.


In France, money laundering is punishable under article 324-1 of the penal Code which provides for a sentence of 5 years in prison and a fine of € 375 000. This sanction may be increased in some cases. For example, the penalty is increased to 10 years imprisonment and 750000 euro fine in two cases: when money laundering is committed habitually or by using the facilities provided by the exercise of a professional activity and when it is committed in organized gang. For a complete point on penalties, see articles of the penal Code concerning simple laundering and aggravated laundering.

Of more specifically to the pyramids:

French law, by article L122-6 of the Code of consumption, banned pyramid schemes because it prohibited: the violation of this prohibition is, at the end of article L122-7 of the same code, punishable criminally liable to a maximum fine of 4,500 euros and/or imprisonment for one year. The offender may be, in addition, sentenced to reimburse those clients that will not be met, the sums paid by them.

The most famous simple pyramid schemes, include chains of gifts (we invite you to make a donation and to rotate the chain), or even systems of Cavalry (financial montage in which the capital of the new entrants is used to pay interest to earlier investors).

Famous cases

Ponzi: died in misery

Madoff: sentenced to 150 years in prison

Get easy, 300 000 vistimes sponsors continued see http://geteasy-way.eu/#new50 also http://www.lefigaro.fr/argent/2015/04/22/05010-20150422ARTFIG00140-une-arnaque-aux-investisseurs-fait-plusieurs-dizaines-de-milliers-de-victimes-en-france.php and http://www.tahiti-infos.com/Arnaque-internationale-Get-Easy-une-centaine-de-victimes-en-Polynesie_a120868.html

Other pyramids: prison for participating http://www.liberation.fr/societe/2014/02/03/prison-avec-sursis-pour-avoir-participe-a-une-pyramide-de-ponzi_977529

The largest history 21/02/2016 nearly 1 million Chinese were victims of a financial scam on a platform of loans between individuals. http://www.latribune.fr/Economie/international/chine-une-chaine-de-Ponzi-a-7-6-milliards-de-dollars-Mise-au-jour-547524.html

and for those who have forgotten to declare earnings

: Tax evasion is to escape or attempt to escape the tax by any means. The author of tax evasion can be apply tax and criminal penalties. The fact of hiding income or taxable property exposes you to tax penalties. Answer the subsequent questions and answers will be displayed automatically you are the author of a tax fraud if you deliberately use some methods to escape or attempt to escape, partly or completely, to the tax. As such, are considered as fraudulent behaviour:

  • a deliberate Declaration, failure
  • a voluntary concealing of property or income subject to tax,
  • the Organization of insolvency,
  • more generally, any manoeuvre aimed at obstructing the recovery of tax.

If the IRS detects fraudulent behavior, it can initiate criminal proceedings after the opinion of the commission of tax offences. Regardless of the tax penalties, the author of tax evasion is liable:

  • €500,000 fine
  • and 5 years ' imprisonment.

These sentences are increased to €2 000 000 fine and 7 years ' imprisonment when the acts were committed in organized band or grace to:

  • the opening of accounts or the purchase of contracts with organizations established abroad.
  • the interposition of persons or bodies established abroad, screen
  • the use of a false identity from false documents (or any other false),
  • a direct debit or a fictitious or artificial act abroad.

An intermediary not authorised is subject to criminal penalties.

If the company does not have the permissions to sell financial products.

Other risks

You are also sure to lose your job (yeah your boss does not keep a known crook) and as there is a folder in the criminal records, many professions are prohibited.

With a hole of 10 year on the CV, it will be difficult to find a job.

Do not forget that it is the loser of the trial that pays lawyers of the winner (see http://www.cidj.com/frais-de-justice-qui-paie-quoi/fin-d-un-proces-qui-paie-les-avocats-et-autres-frais-non-compris-dans-les-depens)

  • If you want that your opponent will reimburse these costs, must be that your lawyer requested at the trial. Indeed, instead costs, for which the judge pronounces, it shall consider the question of justice fees if counsel requested expressly in respect of article 700 of the Code of civil procedure.
  • If you are prosecuted before the criminal judge, you may be ordered to pay the victim costs counsel or bailiff that she incurred to defend (art. 475-1 of the Code of criminal procedure).

Reminder of caution l´AMF published March 12, 2014

AMF cautions public against investment offers promising exceptional yields relying, visible or otherwise, on the establishment of a system of recruitment, membership or sponsorship. Very attractive appearance, these offers are dangling high gains that are unrealistic. They usually hide's actual scams for laundering money and in most cases, in some cases, loss of the placement of departure for the saver.

This type of installation can take various forms: trading on the Forex market (via an unauthorized FOREX platform), or mail order of goods or services. The goal for these companies is to continuously recruit new members added to existing members. The latter recruited bring new funds entering, which are partly donated to the former members to gain and maintain their confidence: this is what is called a pyramid. Media and internet in particular, neighbourhood, "word of mouth": recruitment may be done in various ways.

The device lasts as long as new recruitments are possible. When it collapses, sometimes quite rapidly, members typically lose the entirety of their bet in favour, often the single initiator and his accomplices.

The AMF calls savers to the utmost vigilance and invites them to:

  • Do not respond to this type of offers and do not relay them to third parties;
  • In the case of fraud, victims must file a complaint and provide all possible information to the competent judicial authorities (references for money transfers, identified contacts, addresses, emails or emails, etc.).

In General, the AMF advises investors to follow the following rules before any investment:

  • No commercial speech should make us forget that there is no investment offering high returns with no risk;
  • Learn about the legality of the financial intermediary that offers the product by consulting the list of the establishments authorized to operate in France (http://www.amf-france.org > high-speed access > savings products approved (GECO)). To ensure that the intermediary who offers products or financial services is allowed to operate in France, you can consult the list of service providers for eligible investment (https://www.regafi.fr) or the list of permitted in category Advisor investment financial (CIF) or equity investments (PAC) (https://www.orias.fr/search) Advisor.

An intermediary not authorised is subject to criminal penalties.

To answer the questions and queries of savers, the AMF provides its site internet http://www.amf-france.org or the savings Info service 01 53 45 62 00 from Monday to Friday from 9 h to 17 h.

Institute for the financial education of the public (IEFP) provides investors with a presentation of systems of pyramid selling on its Web site: www.lafinancepourtous.com/Decryptages/Articles/Systeme-de-vente-pyramidale

To denounce (sponsors, proof of payment, site touting live Ponzis): https://www.internet-signalement.gouv.fr/


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