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

Word History

Etymology

Charles Ponzi †1949 American (Italian-born) swindler

First Known Use

1920, in the meaning defined above

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

History and Etymology for Ponzi scheme

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