What is a Ponzi scheme?

A Ponzi scheme is an illegal type of investment fraud that involves luring investors or customers with the promise of high returns with little or no risk. The term is named after Charles Ponzi, who ran one of the most famous Ponzi schemes in the early 20th century. In a Ponzi scheme, the fraudster typically collects money from unwitting investors or customers and does not put it into any legitimate investment. Instead, the money is used to pay out returns to the earlier investors, who are under the impression that their investments are growing. The fraudster will often entice new investors with the promises of high returns, which will also be used to pay out older investors. This creates an illusion of profitability, when in reality, the scheme is unsustainable. Ponzi schemes are illegal in West Virginia. As such, anyone engaging in a Ponzi scheme in West Virginia may be subject to criminal charges, including fines and/or imprisonment. Additionally, the victims of such fraud may be entitled to restitution, which means they could receive some, or all, of their losses back. Anyone engaging in investment activity should be vigilant and verify any potential investments before putting any money into them. Additionally, further research should be done to ensure that any potential investments are not Ponzi schemes.

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What is a Ponzi scheme?

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