Ponzi scheme

noun

Pon·​zi scheme ˈpän-zē- 

: an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks

Examples of Ponzi scheme in a Sentence

Recent Examples on the Web

Just as a Ponzi scheme collapses without sufficient cash inflows from new investors, Ponzi finance collapses without sufficient price appreciation for the asset being financed. —Hersh Shefrin, Forbes.com, 31 Aug. 2025

Between 2023 and 2025, Carrasco-Ramirez is accused of persuading seven people to invest in a Ponzi scheme, deputies said. —Daniella Segura, Sacbee.com, 25 Aug. 2025

Total losses by Marshall’s investors fall short of the multibillion-dollar Ponzi scheme masterminded by Bernie Madoff. —Eleanor Pringle, Fortune, 17 Aug. 2025

Kevin Lamarque | Reuters Two men have been indicted in New York on federal criminal charges in connection with a water vending machine Ponzi scheme that allegedly swindled investors out of more than $200 million, the Department of Justice said Thursday. —Dan Mangan, CNBC, 14 Aug. 2025

Word History

Etymology

Charles Ponzi †1949 American (Italian-born) swindler

First Known Use

1920, in the meaning defined above

Rhymes for Ponzi scheme

• academe
• cherubim
• elohim
• episteme
• seraphim
• abeam
• airstream
• bloodstream
• daydream
• downstream
• esteem
• extreme

Legal Definition

Ponzi scheme

noun

Pon·​zi scheme ˈpän-zē-ˌskēm 

: an investment swindle in which early investors are paid with sums obtained from later ones in order to create the illusion of profitability

Etymology

Charles A. Ponzi (ca. 1882–1949), Italian-born American swindler