What is a Ponzi scheme?

A Ponzi scheme is an illegal investment fraud that involves paying earlier investors with money received from newer investors. It is named after Charles Ponzi, who ran this scam in the early 20th century. The way a Ponzi scheme works is that a scammer solicits investments by promising a high rate of return with little or no risk. The scammer does not actually invest the money, but rather takes the money from later investors and pays earlier ones with it. This creates the illusion that the scheme is a success, so more people are encouraged to join. Eventually the scheme falls apart, as the scammer does not have enough money to pay back everyone. In Florida, it is illegal to run a Ponzi scheme. Offenders may face civil and criminal penalties including paying fines or even jail time. Anyone who has been a victim of a Ponzi scheme should contact a local law enforcement agency to file an official complaint. It is important for potential investors to do their research before investing in any opportunity, especially those that promise high returns with little risk. Florida has laws and regulations in place to protect investors from fraudulent schemes, but it is always best to be safe rather than sorry.

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What is a Ponzi scheme?

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