Have you heard of these companies called Sunshine Empire, Geneva Gold and Gold Guarantee? Unfortunately, there is one thing these companies have in common: they are all Ponzi schemes.
A Ponzi scheme is a fraudulent investment scheme where a company pays returns to its old investors’ using capital injected by new investors. To keep up with the scam, more and more new investors are needed to continue paying off older investors till the pyramid becomes unsustainable and eventually collapses.
The Ponzi scheme is named after Charles Ponzi who became infamous for running such an operation in Boston in the 1920s.
Charles Ponzi in 1920.
Ponzi schemes usually target individuals who have limited investing knowledge. Losses can extend into the billions; the estimated size of fraud of Bernie Madoff’s investment scandal is $64.8 billion. In Singapore, it was reported in the news that a family lost close to a …Read the full article →