You can’t turn on the news without hearing about one “Ponzi scheme” or another. Who is this Ponzi guy and how did he get to be forever associated with defrauding little old ladies out of their life savings?
Well, the answer is on the SEC website. Apparently it all started with Charles Ponzi who duped New England residents out of funds using international mail coupons. Believe it or not, this happened in 1921. He promised a 40% return and would use money from one investor to pay back others. That’s the concept of these frauds – you use money from one person to fund the next person’s return. When things are going up, it seems these guys can keep the scam floating but as soon as markets shift, the whole thing collapses.
That’s what happened in the Bernard Madoff situation and more of these schemes are popping up daily.
There’s a book you can read to learn more about good ole Ponzi (not to be confused with Fonzi of Happy Days fame.)
But the people I worry about are these people – www.ponzivineyards.com . But then again, maybe it’s true that any PR is good PR. In fact, they are probably benefiting from the name recognition and exposure for their wine. I am sure there are a ton of searches in which they now appear.
We’ll have to get back to you on that one.