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Ponzi Scheme
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Any investment program that offers impossibly high returns and pays these returns to early investors out of the capital contributed by later investors. Named for Carlo Ponzi who promoted such a scheme in the 1920s based on a theoretical arbitrage in international postal reply coupons. Sometimes called a pyramid scheme because the structure must be supported by a broader and broader base of gullible investors as time passes. Also called Pyramid Scheme.
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