Ponzi Shceme is so named after Italian fraudstar Charles Ponzi who scammed Boston of 20 million dollars. He would send money to agents working for him in other countries, who would buy IRCs and send them back to the United States. Ponzi would then exchange the IRC for stamps worth more than he paid for them, and sell the stamps. He made profits of over 400%.
He would give 50% returns on investments within 45 days and 100% in 90 days. The way he would return money to investors would be by taking it from new investors. His scam frauded people out of 225 million dollars(adjusted for inflation).
