American International University Online
Unit 2 Individual Project
ENGL107— English Composition II
November 20, 2010
Ponzi Schemes are also called pyramid schemes. A pyramid scheme is a non-maintainable business replica which involves the exchanging of money solely for purposes of joining other investors or individuals into the business venture, without any services being distributed. In a Ponzi scheme, potential investors are wowed with the promise of hefty returns, by the fraudster savvy, skill or other secrets (Times… 2010). The returns are repaid, for awhile, out of newly investors’ principals and not with profits. Pyramid and ponzi schemes are forms of fraud. Both of these investments can be detrimental in losing your life savings (U.S. Securities and Exchange Commission, n.d.). I. Thesis statement: Our mishandled economy in the world today has characteristics of Ponzi scheme(s). Ponzi schemes take monies from wide ranges of investors and use their investments for paying returns. This constructs a delusion that it provides an increasingly eye-catching rate of a return on investments as a result of a savvy investment decision when in reality these high earnings which seem irresistible in the beginning; are in consuming the asset initial foundation. (Times… 2010). A Ponzi scheme fraudster fund can last as long as new investments are flowing and can sufficiently sustain the higher rates of return which had been paid to prior investors. If this no longer happens, the scheme crumples.
II. BODY - How Ponzi Scam First Originated (Business Pundit, 2008) A. Charles Ponzi Early Years
B. Charles Ponzi works
III. Ponzi schemes fail continuously because of a number of reasons. A. Why do ponzi schemes fail
1. The press
2. Lack of money coming in to pay early investors
3. Difficultly in recruiting newer investors (U.S…...