Builders of financial pyramids have existed for centuries. The founder of the first of them is Charles Ponzi, after whom this invention is solemnly named. It's funny, but if any of the pyramid builders had bothered with simple mathematics, they would have realized that in order to pay 100% of the profits to the first 1000 investors, it is necessary to receive new investments from 2000 other investors. The next stage requires 3,000 investors to raise funds from 6,000 new investors. Next, you need to increase the number of investors to 18,000 in order to pay off the claims of the first 9,000 investors. So, on the tenth turn of the financial pyramid, theoretically 13,122,000 investors should make contributions. But the whole problem is that after the 15th revolution the number of investors will be greater than the entire population of the earth! Therefore, the Ponzi scheme is doomed to failure sooner or later. And what is written below only confirms this rule.

Ponzi pyramid

First financial Pyramide was built by an Italian Charles Ponzi in 1919 in the USA. As Charles himself told reporters, the idea of ​​creating his own pyramid came to him after he received an international response coupon by mail from one of the Spanish businessmen. The essence of the coupon circulation was as follows: the ratio of exchange rates was such that it was possible to profitably resell in the United States coupons that had previously been purchased in European countries.

Charles created the Exchange Company valuable papers"(The Securities Exchange Company) or "SXC", where he invited several investors. They had to finance the proposed scam, for which they received a promissory note. But at the same time, Charles promised them 100% of the profits that arose from transatlantic trade in a little more than 3 months. No similar payment by issuers of other securities could guarantee this.

Charles Ponzi

In fact, Ponzi, of course, did not buy coupons, because... they could only be exchanged for postage stamps. He simply gave old investors part of the amounts brought in by new ones. By July 1920, Ponzi bills brought him up to 250 thousand dollars daily. The Boston Post regularly published generously paid endorsements of Ponzi's activities.

Perhaps everything would have gone well if not for the Post Magazine journalists. These nosy noses calculated that to cover the company's investments, 160 million coupons would need to be in circulation, while there were only 27 thousand.

The pyramid collapsed in the summer of 1920 due to a lawsuit by one of the investors named Daniels, who demanded 50% of the profits from the Ponzi company. Under the law of that time, the lawsuit allowed the freezing of Ponzi funds that were in bank accounts. On July 26, Ponzi announced a temporary suspension of accepting deposits due to inspections. This was a mistake; investors ran in droves to take their money. On August 10, 1920, federal agents initiated an investigation. She found that SXC did not invest a penny at all, but only paid interest using proceeds from new investors. During the trial, part of the money was found. But the investors managed to return only 37% of the value of the bill. Ponzi received, according to various sources, from 3 to 5 years in prison, his movable and real estate, and a fine of $250 thousand was imposed on him.

Madoff

Bernard Madoff- an ordinary American guy. In his youth, he loved to swim with friends, worked as a lifeguard on the beach and even as an installer of irrigation equipment. He was never a villain!

Having saved about 5 thousand dollars, he founded his own company: Madoff Investment Securities. After some time, his brother Peter, both sons and even nephews were already listed in his file in various positions. The Madoff company took part in the creation of the American stock exchange NASDAQ, which was engaged in the purchase and sale of securities in the interests of investors. She was one of the 25 largest participants in this exchange, a pillar of Wall Street and a pioneer of electronic trading. It was Bernard Madoff, by the way, who was the first to computerize the entire process in his company.

Madoff Investment Securities was considered one of the most profitable and reliable among US investment funds. It brought about 12-13% per annum to its investors. On the sidelines, of course, there were rumors that Madoff's success was ensured by access to insider information: too many banks, hedge funds and charitable organizations were his clients. However, as long as everything was fine, no one really cared. And it was not true, as it turned out later.

2008 was a disaster year. Not only did the global financial crisis hit investors hard, and they wanted to withdraw some of their funds from Madoff, but both of the tycoon’s sons behaved like cowards and pawned their dad: having received “repentance” from him, they handed him over on a silver platter. to his authorities.

Well, if without lyrics, then during the 13 years of its activity, the company Madoff Investment Securities, as an investigation later found out, did not make a single transaction on the stock exchange. None! She paid all interest to previous investors from the funds of new arrivals. When investors withdrew $7 billion in December 2018, the pyramid collapsed like a house of cards.

During the investigation, Bernard confessed to 11 counts and was mercifully sentenced to 150 years in prison. One of Bernard's sons committed suicide while the investigation was ongoing. Just like, by at least another of the investors who suffered losses.

During his speech, Madoff said that he himself no longer knows how this happened. At first everything seemed like a game, and then the snowball grew so big that there was no longer any way to stop it.

Data. The Medoff pyramid is the largest in history. As a result of its collapse, about 3 million people and several hundred financial institutions in the USA, France, Spain, the Netherlands, Italy and Switzerland were affected. Here are the biggest losses:

• Hedge fund Fairfield Sentry Ltd - $7.3 billion.
• Kingate Global Fund Ltd - $2.8 billion.
• Tremont Holdings Inc's Rye Investment Management - about $3 billion.
• Banking group “Banco Santander” (Spain) - $3.1 billion.
• HSBC Bank - $1 billion.
• Royal Bank of Scotland - $600 million.
• Bank "BNP Paribas" (France) - $460 million.
• The Boston-based Robert I. Lappin Charitable Foundation is completely bankrupt.
• Bank South Korea- 63 million dollars.

MMM

Another good guy who destroyed the world is Sergei Mavrodi (and Co.).

Coming from a family of installers and economists, he took all the best from his parents: he was excellent at counting in his favor and wonderfully “assembled” high-rise financial objects - pyramids.

It must be said that from the very beginning, fate suggested to him that he needed to live “more boldly, more cheerfully, more inventively,” having been awarded at birth with a double heart defect. Doctors predicted his death in the cradle, but Sergei deceived their expectations.

In 1989 he organized Joint-Stock Company MMM. As stated in official sources, the name is an abbreviation of the first letters of the names of the three founders of the business: Sergei Mavrodi, Vyacheslav Mavrodi and Olga Melnikova. For five years the company carried out only financial and trading activities: resold computers and other office equipment imported into the country.

And only 1994 is officially considered the year of the creation of the financial pyramid, in which almost 15 million investors participated. MMM issued 991 thousand shares at a price of 1 thousand rubles per share, and they have been on sale since February. At the same time, the company introduced bilateral quotes with a margin for buying and selling. This led to rapid spread, as shares traded on the basis of "today is always more expensive than yesterday."

A few months later, the company's management tried to register a second prospectus for the issue of securities for a billion shares. However, the Ministry of Finance of the Russian Federation did not issue permission. And then Mavrodi had an idea that was brilliant in its simplicity: he printed and released “MMM tickets,” which were not securities, but were formally equal to one hundredth of the share price. Outwardly, they resembled a Soviet chervonets with Sergei instead of Lenin in the center.

Mavrodi replaced purchase and sale transactions with donation transactions. That is, the MMM ticket was not purchased, but was issued as a souvenir for a voluntary donation. In the opposite situation, Sergei himself donated money to the investor.

From February to August 1994, ticket prices increased 127 times, and the number of depositors reached 15 million people. According to the recollections of former Deputy Prime Minister Alexander Shokhin, at government meetings Chernomyrdin “swears at the security forces, demanding that at least something be done before everything bursts.”

Payments of money continued until July 27, after which Sergei Mavrodi, by his decree dated July 29, announced a reduction in the value of shares by 127 times, to a thousand rubles. At the same time, it was stated that prices would now rise twice as fast, quadrupling every month. On August 4, 1994, Mavrodi was arrested for tax evasion. His office was closed, a search was carried out and several bags of money were found, or rather 4 billion rubles or 690.6 thousand dollars at the August 1994 exchange rate. That's the whole story. Next - crowds of defrauded investors and statements by the head of MMM that everything was “stole” by the state. 50 people committed suicide. No one was able to return the money - legal subtleties got in the way.

Unlike America, our pyramid builder was not put behind bars. On the contrary, he became a deputy of the State Duma! And he even tried to run for president. After the first pyramid, the second and third ones followed, as well as similar projects on the Internet. Mavrodi plans to run for president of Russia in 2018. Well, I think he has a chance.

L&G K.K.

On February 5, 2009, the world was shocked by unexpected news from Japan. Head of Japanese investment company L&G was arrested that day on suspicion of creating a financial pyramid, whose investors, according to preliminary estimates, lost from 1.4 to 2.2 billion dollars.

Arrested was 75-year-old Kazutsugi Nami, who at that time headed the board of directors of the Tokyo company L&G K.K., which declared itself bankrupt. This company, according to The Japan Times, promised to pay investors 9 percent dividends for every million yen invested every three months, in other words, about 40% per annum! L&G K.K. also issued its own electronic money, called Enten, which investors received in exchange for funds deposited in its accounts.

Kazutsugi Nami

According to Jiji Press, 37 thousand investors invested in L&G K.K. about 126 billion yen (US$1.4 billion). The Japan Times newspaper, based on data from the Kyodo News agency, assessed the attracted L&G K.K. funds of more than 200 billion yen (2.24 billion US dollars).

L&G K.K. became the 3rd largest financial pyramid in the world and the first in Japanese history. Until this time, the largest fraud in the land of the rising sun was considered the case of the Toyota Shoji company, which operated in the 1980s. She attracted funds from elderly Japanese by promising them investments in gold.

As a result of the investigation, in 2010, Kazutsugi Nami was sentenced to 18 years in prison.

Stanford Financial Group

February 17, 2009, immediately after the start financial crisis collapsed (with the help of journalists and government law enforcement agencies) another (besides Madoff) largest American history pyramid - Stanford Financial Group.

58-year-old Allen Stanford, a famous financier and philanthropist, sponsor of professional sports, was the head of the broker-dealer consulting company Stanford Group Company, located in the offshore zones of Antigua and Barbuda. In addition, he controlled Stanford International Bank, whose clients were more than 30 thousand people. The financial institution's assets under management were valued at $50 billion. Stanford also owned Management Company Stanford Capital Management. All three organizations were members of the SFG.

Allen Stanford

SFG's services were used by private and institutional investors and companies from 136 countries. In January 2009, financial analyst Alex Dalmady published an article in the Venezuelan economic magazine VenEconomia, catchily titled “The Duck” (El Pato), in which he tried to “calculate” financial institution, like the one run by Bernard Madoff, who had just been exposed by the authorities.

Alex Dalmadi chose his company on three points: it offered clients high interest rates, was run by a small group of people and had such a good reputation that no regulator would check it. And so, by an unfortunate accident for Stanford, Dalmadi chose Stanford International Bank.

The interest rate on deposits at Stanford Bank was 3 percentage points higher maximum bet V American banks and amounted to 7.5 percent per annum. The organization was run by the billionaire himself, his classmate James Davis, Stanford's father and neighbor, whose business experience was limited to the production and trading of meat, as well as the sale of used cars.

Alex's article did not go unnoticed. A month after publication, several American agencies became interested almost simultaneously in the activities of SFG: the US Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), the financial regulation Florida Commission on Regulation (FOFR) financial markets(FIRA).

Since the beginning of the audit, all bank accounts have been frozen. Panic began among investors who wanted but could not get their money back. Actually, even if the government gave such permission, financial resources there would simply not be enough money in the accounts.

According to the SEC, Stanford orchestrated the largest fraudulent investment scheme, as a result of which SFG clients lost approximately eight billion dollars. The SEC does not disclose most of the details of the charges, but it is known that the commission accused Stanford and his assistants of selling certificates of deposit and other investment instruments to clients, promising high returns on them. At the same time, the certificates of deposit did not have the necessary insurance from the American Federal Deposit Insurance Bureau.

A Ponzi scheme is an investment scam that initially promises investors maximum returns with virtually no risk. At the same time, profit is generated only for early investors through financing by new ones who join it. Thus, this scheme is viable exactly until the flow of investors stops, after which it will immediately collapse.

Principle of operation

The Ponzi scheme got its name after the Italian swindler Charles Ponzi, who developed it. He worked as a clerk in America, first implementing the model in 1919.

We will tell you in detail about the principle of operation and the Ponzi scheme in this article. It resembles a financial pyramid in that it is also based on the funds of new investors to provide income to old investors. True, there is a key difference between these schemes. It consists in the fact that the manager first collects all the funds himself. In a financial pyramid, any of the participants in the process directly receives income. In the case of a financial pyramid, the manager does not have access to all the money in the system.

It is worth noting that, despite the difference in the principle of income distribution, both the Ponzi scheme and the financial pyramid are doomed to failure, since sooner or later the money for payments will inevitably run out.

Details

Now let's look at this system in more detail. Essentially, a Ponzi scheme is an investment scam in which an organization or individual verbally guarantees income solely through the use of new capital. At the same time, it will be attracted from new investors, and not from the profits received by new investors. At the same time, the Ponzi scheme pyramid attracts a large number of people due to higher returns. Especially compared to other types of investments.

It’s interesting that sometimes a Polka Ponzi scheme can start out as a completely legitimate business, remaining one exactly until the moment when it reaches the promised profitability by legal means no longer seems possible.

It also happens when the business itself turns into a pyramid if it begins to function on fraudulent terms. Whatever the initial situation, high returns require an ever-increasing amount of funds from new and new investors to keep the scheme alive and functioning.

Characteristics

To better understand its structure, we note that at the initial stage, all investors are promised high returns, and by investing in traditional financial instruments. For example, futures.

Fraudsters also use similar terms when they promise offshore investments that can attract a large number of investors. Thus, the promoter sells his shares through investors, taking advantage of their lack of knowledge and competence.

Almost always such schemes are followed at the very beginning investment policy by investing in hedge funds or other available financial instruments. Can turn into a Ponzi scheme and a hedge fund if the organization begins to rapidly lose its assets. At the same time, the organizers hide losses by starting to falsify auditors' reports in order to continue attracting investments.

Other examples

In the 20th century many financial strategies and the tools became Ponzi schemes. For example, Allen Stanford used certificates of deposit banking organizations, with the help of which he managed to leave thousands of gullible citizens with nothing. At the same time, the certificates of deposit themselves are insured and the risks of their use are minimal. But Stanford was giving out coupons, which was pure fraud.

In every scheme, the promoter will initially fulfill his obligations to attract as many new investors as possible, while the current ones invest additional funds. With the advent of new participants, a cascade effect occurs. As a result, payments to old investors are made from money coming from new participants. At the same time, there is simply no profit.

Such high excess returns also encourage old investors to leave their money in the system. As a result, the organizer of the scheme has no need to return the money. All he can do is send regular notifications about the client’s ephemeral profits.

The organizers of such a scheme strive by all means to minimize the withdrawal of money by coming up with new investment options. If someone nevertheless decides to take the money, it is paid to him in order to maintain the myth of solvency for the other participants.

Schema disclosure

Even if such a scheme is not discovered by the authorities, it will collapse very soon. There are several good reasons for this.

Firstly, the promoter himself may disappear with all the accumulated money.

Secondly, such a scheme requires a continuous flow of investments to ensure the volume of all payments. If the flow of incoming funds slows down, the scheme will collapse, since the organizer simply will not be able to provide further payments. Such delays in liquidity usually lead to panic among investors, then most investors try to return their investments as soon as possible. These problems are reminiscent of liquidity crises that occur at large banks.

Third, external market forces may have an impact. A sharp economic recession. A striking example is the Madoff financial pyramid scandal in 2008.

Biography of a scammer

The scheme was named after Charles Ponzi. Having emigrated to the USA, he created one of the most original financial pyramids. It is known that he arrived in America in 1903, losing all his savings along the way, presumably he lost them in gambling. All his attempts to make money were unsuccessful until 1919, when he opened his own company with $200, which he borrowed from furniture maker Daniels.

The company he registered was called "Securities Exchange Company". She began to engage in arbitration transactions, issuing promissory notes. According to them, she was obliged to pay $1,500 for every thousand dollars received in three months.

Already in 1920, Ponzi transferred control of the company to young Lucy, and he himself moved to an expensive mansion. In the summer of the same year, the pyramid he created collapsed after a lawsuit from one of the investors, who demanded half of the profits of the entire company. According to the laws of that time, Ponzi’s funds in banks were frozen; already on July 26, he announced the cessation of accepting new deposits due to tax police inspections. This became a catastrophic mistake; investors immediately wanted to take their money back.

On August 12, he was detained, revealing a debt of 7 million dollars, despite the fact that there were only 4 million in the accounts. In October, his company was declared bankrupt, and Ponzi himself was sentenced to five years in prison.

On the loose

Once free, he did not stop financial fraud, so a few years later he was deported to Italy.

He taught English language, and then, under the patronage of Mussolini, moved to Rio de Janeiro, where he became the official representative of Italian Airlines. There he died in 1949 at the age of 66 from a cerebral hemorrhage.

Brought to life on screen

In 2014, a biographical drama called “Ponzi Scheme” was released. The film was directed by French director Dante Desart.

The tape describes in sufficient detail and clearly the operation of this scheme. Interestingly, such an idea had already appeared in literature, but Ponzi was the first to actually implement it. Similar fraudulent schemes were described by Charles Dickens in his novels Little Dorrit and Martin Chuzzlewit.

Modern adaptations

Many believe that the modern craze for cryptocurrency is nothing more than another attempt to implement a Ponzi scheme for ICOs. According to some experts, this simply kills innovation, being nothing more than a financial pyramid.

Fundraising campaigns have been accused of maximizing profits by taking advantage of the confusion surrounding blockchain technology. As a result, they manage to deceive numerous inexperienced participants in this scheme, who receive false promises, trust dubious advertising, and count on significant investment opportunities and extremely high profits.

Instead, they are doomed to fail, since such schemes remain profitable only until the supply of new money runs out.

At the same time, there are also those who believe that cryptocurrencies have nothing in common with fraudulent schemes. Many are convinced that Bitcoin will never be able to fulfill its purpose. The Ponzi scheme will be implemented again.

Is there anything in this world more amazing and eternal than human frivolity and greed! Ponzi died more than half a century ago, but his method of turning other people's financial rivers into his own pocket is not only alive, but has also received creative development in the activities of his spiritual descendants. Even at the beginning of his scam, Ponzi noticed that those who were advised to do so by friends or relatives were most willing to trust him with funds. However, the American Karl Rehnborg was able to truly uncover this pattern and build his business on it. Nowadays, such structures, known as MLM (multi-level marketing), are especially popular on the Internet, but they began not in a virtual one, but in the very real network founded by Rehnborg in the 1930s. Customers of the first chain company on the planet, California Vitamins, were offered good commissions if they sold the product to subsequent customers and convinced them to promote it further. Today in the world there are more than 4 thousand large companies that build their business on this simple technique. Their total turnover exceeds $300 billion.

But private business not the only one using Ponzi's invention. It is this that underlies any institution. social insurance. In France, America, and Germany, workers regularly pay pension tax, which the state redistributes, while it uses part of the profits received at its own discretion, so today there is a deficit pension funds the planet numbers in the billions, and gullible citizens have no guarantee that they are not the last in this chain. And this is the only thing that the “Ponzi scheme” has in common with the pyramids unfairly attributed to it. Both eventually collapse, taking with them thousands of bankrupt investors.

Shame on the family

Carlo Ponzi was born in 1882 in Parma, in the family of an Italian general, and was not at all the shallow soul that many now imagine him to be. Another thing is that already in his youth he was an inveterate swindler and every now and then he found himself in unpleasant situations.

In the end, his parents bought him a “one way ticket” overseas and sent him to relatives in Pennsylvania to seek his fortune away from his father’s home.

In 1903, the future schemer set foot on American soil. He had a small suitcase in his hands, a joyful smile on his face, and in his head a whole swarm of plans for his future in his new homeland.

Carlito's journey began on the industrial outskirts of Pittsburgh, where he washed dishes, served in shops, pressed elevator buttons and even translated from English. However, such activities did not in any way correspond to his ideas about life, and he decided to try his luck in another field. Having said goodbye to inhospitable Pittsburgh, Ponzi began to travel around the East Coast, moving from city to city and changing jobs like gloves. This continued for five years, until in 1908 it was brought to Canada. Here he finally found his star in the person of Señor Fertolini, manager of a bank in Montreal. Being an Italian, he took pity on his compatriot and took him on as a clerk.

It was then that Carlito’s suit acquired its characteristic chic, and his face acquired sleek smoothness. His bank account did not in any way correspond to the salary of a bank employee, even one as irreplaceable as the young Parmesan turned out to be. The newcomer’s duty was to attract new clients, and he did it better than any of his colleagues: Ponzi promised clients such high interest rates that they agreed without hesitation. At the same time, the depositors actually received what was promised, at least those of them who came to the bank first, because, as one might guess, dividends were paid from the following donations.

A gift of fate

Of course, the profitable enterprise did not last long. The bank burst, and our hero and his benefactor were taken to prison. Ponzi successfully served two years, and if you think that all this time he was biting his elbows and repenting, then you are sorely mistaken. Upon his release, he immediately began another, no less worthy occupation - forging documents and smuggling illegal immigrants across the American border. Knowing how Americans do not like it when someone violates their immigration laws, it is not surprising that they did not make an exception for Carlito: in 1915, a federal court in Atlanta sentenced him to another prison term. After serving it, Ponzi went to Boston. There, a talented young man got a job as a clerk in a grocery store located in the very center of the Italian quarter. And not at all because the second imprisonment had a detrimental effect on his mental abilities, but because he needed time to look around and think. Ponzi had already passed 35, and it was time to finally drop anchor and do something more serious than the petty pranks in which he had indulged until now.

Fate was merciful to Ponzi: as if guessing his secret aspirations, she sent him an angel in the person of 18-year-old Rosa Guecco, the daughter of an Italian, fruit merchant Don Alberto. They met in a store to which Signor Guecco supplied goods, and a year later they got married - to the great pleasure of all three. However, Carlito himself benefited most from this: Rosa was the only child of a greengrocer, and dad, at first sight, imbued with confidence in his future son-in-law, recklessly hastened to entrust him with the management of the company. However, a couple of months after Carlito entered the business, the company went bankrupt, and the happy newlywed had to look for a new place to apply his remarkable managerial abilities.

Tili-tili dough!

Marriage to Rosa Guecco brought Ponzi not only the joy of marital pleasures, but also useful connections in emigrant circles. Italians were not favored in America, they teased them with pasta, and in everyone they saw a bandit and a mafioso. Therefore, those who came here tried to stick together and help each other. This is what Carlito was counting on when he offered his hand to the young beauty. Don Alberto helped his son-in-law navigate the motley crowd of Italian emigrants, pointed out the right people and duly introduced it to them.

Ponzi, for his part, also tried not to lose face: he dressed to the nines, had a perfectly cut haircut, wore excellent cologne, and most importantly, knew how to carry on a conversation and win over his interlocutor. While communicating, Carlito sprinkled his speech with famous names to which he was supposedly related, looked at his watch and often interrupted the conversation, vaguely hinting at a business meeting, which he could not miss under any circumstances. In other words, Ponzi made it clear that he was an important bird, without, however, going into details, what kind and where he came from. Oddly enough, this bluff was believed, and not least due to the speaker’s attractive appearance. Carlito was handsome and had such a charming smile that only a telegraph pole could resist it. All this together redeemed his short stature, barely exceeding one meter sixty, servility in manners (which, however, many consider an advantage and not a flaw) and a strange restless look, which, with prolonged communication, made it possible to guess that the fellow was not as simple as he seemed.

But no one guessed. Ponzi's new friends got him a job in the letters department of one of the local newspapers. It was 1919, he was 37, and he was feverishly looking for an opportunity to use his talents.

Write letters…

And she soon introduced herself to him. While answering one of the letters, Carlito discovered a postal coupon enclosed by the sender. Such coupons were introduced by the Postal Agreement in 1906 and could be exchanged for stamps. They were attached to letters so that recipients would not spend money on a reply message. 60 countries participated in the agreement, and the coupons were unified. They could be bought in France and sold in Russia without losing even half a cent.

The system worked smoothly until the First World War, but in the late 1910s it began to fail. A crisis began in the world, which primarily affected the European states that suffered most from military devastation. Hence the difference exchange rate in Europe and America, increasing as economic distress deepens. It so happened that a coupon purchased in Spain for a cent apiece could be exchanged in the United States for six marks, also for a cent apiece. Realizing this, Ponzi entered a state of extreme mental excitement. What if you buy not one brand, but ten? What if it's a hundred? What if there’s a whole carriage? Imagination painted delightful pictures and teased me with crazy amounts. It was just a small thing: Carlito didn’t have the money for the first coupons, and he had to get them at any cost.

Hot summer in Boston

Having acquired start-up capital, on December 26, 1919, Carlito registered his own company, which was called the Securities Exchange Company (SEC). It had branches in Boston, New York, Manchester, New Hampshire and other New England cities and was engaged in paying off promissory notes with a return of first 50%, and then 100% after 90 days. At the same time, it was announced that the money was being invested in postal operations, generating a profit of 400%, but that their technology was not subject to disclosure.

It is still unknown whether Ponzi actually tried to speculate with coupons, playing on the difference in rates. Most likely no. But even if he tried, it was not possible to do this: bureaucratic red tape in post offices, delays in sending letters and money transfers they would have eaten up the entire difference between the cost of the coupons, and the schemer would have seen nothing but losses. Not to mention the fact that a person buying them in such quantities looks at least strange and risks attracting the attention of the authorities.

But Ponzi was not going to take the risk. He simply shared his observations with his friends, and they literally forced money on him. Having realized that the mechanism had started, he was no longer able to stop it.

A week after the company opened in Boston, a real investment boom began. Rumors that the company was regularly paying dividends inspired more and more new investors, and at the beginning of June the amount of income amounted to $1 million per day. This could not have happened even in a nightmare. SEC offices were literally flooded with money. Dollars were in desk drawers, in cardboard boxes in hallways and even in toilets. And they kept coming.

Taking care of his clients, Carlito arranged his offices in such a way as to make investing as easy as possible and making it more difficult to receive money. Distribution was carried out from one or two windows, and reception - from several dozen. At the same time, huge queues crowded around the former, and several people stood near the latter. But the most remarkable thing was this: in order to pick up the dividends, you had to go past a whole string of cash registers, where they could be safely invested back. And most Americans did just that. Having received their money safe and sound, they gladly left it to grow.

Big SECRET for a small company

Ponzi was at the height of bliss. He dressed from the most expensive tailors, bought several cars, showered Rosa with diamonds, hired beautiful secretaries and sent his old mother from Italy. The hot summer in Boston was the happiest of his life... But it did not last long. Unfortunately (or fortunately?) there was no kind person near him who would explain to him that the main thing in such a matter is to get away in time.

At the beginning of July, the authorities became interested in the wonderful company. But no matter how hard they tried, no checks could reveal any violations. During one of the audits, the SEC was shut down for some time. Panic began, and hundreds of investors rushed for money. However, Carlito paid every cent, becoming known as a national hero who had unfairly suffered from the authorities and therefore deserved even more trust. He personally received frightened customers, bringing them cakes and coffee and smiling his discouraging smile.

But this was the beginning of the end. Shortly after the shutdown incident, one of the SEC investors sued Carlito. It was a trivial matter, but journalists from the Boston Post became interested in it. They began to dig under Ponzi, and on July 26, 1920, they burst out with an article in which they listed all of Carlito's exploits, including his criminal record and prison sentences in America and Canada. The incriminating evidence against the boss was revealed by Ponzi’s press secretary, the famous journalist and public figure McMasters. He was the first to explain to the newspaper, and at the same time to the world, the essence of the mysterious scheme: “Carlito is a soap bubble. If he pays all the dividends, there will be no memory left of him.” But the world did not believe McMasters. Carlito continued to be a national hero.

Live and die in Rio

40 million investors suffered from the Ponzi scam. And not just any people, but residents of New England, New York and Pennsylvania - the color of America's intellectual elite. total amount deposits amounted to $15 million ($140 million taking into account the current value of the dollar). What Ponzi had done was cleared up within a year. Many lawsuits took place, several companies and five reputable banks went bankrupt. Carlito himself was sentenced to five years in prison, of which he served 11 months and was released under an amnesty. Upon his release, he went to Florida, where he became involved in land transactions no less dubious than his predecessors. After serving another three years, he was deported to Italy, where Mussolini received him with open arms. They explained to him that in the person of Carlito he finds a financial genius capable of reviving the country's economy. However, the Duce soon refused his services. Finding out that the financial genius was not good with arithmetic, he sent him to Brazil to raise a branch of a certain unprofitable Italian airline. Needless to say, this enterprise also went bankrupt, leaving Ponzi without a livelihood.

At the end of his life he fell into poverty and died in 1949 in a hospital for beggars on the outskirts of glittering Rio de Janeiro. They say that before his death there was a smile on his face.

Carlo Ponzi
talisman 30.10.2010 12:44:33

I am proud of this man and at the same time I am surprised at how talented he was... Wandering around cities and countries, getting into business, falling in love, never regretting the past, rose to the very top and sank to the bottom, he died with a smile :)

MMM-2011? Better read how these pyramids began to be built at the beginning of the 20th century.

Charles Ponzi was born on March 3, 1882 in the city of Luga, located near Ravenna (in northern Italy). This Italian became known for creating the famous “Ponzi scheme”, a large financial pyramid, which was simply countless in Russia in the 90s of the last century.

True, the difference between a “Ponzi scheme” and Russian pyramids is visible to the naked eye. The thing is that the Italian has created enough interesting story around her scam, and logically she looked very slim. Until now, no one had any doubt that a Ponzi scheme could help you earn a lot of money in a short time.

"Ponzi Scheme"

In 1919, Charles Ponzi had a business idea. He decided that he could start publishing an international magazine. Without thinking twice, Ponzi sends a letter to a Spanish company to find out details about cooperation in the field of magazine business.

In response, Charles received a letter containing international exchange coupons. At the post office, anyone could exchange these coupons for stamps and send the letter back.

But the most interesting thing was that in Spain you could get one stamp for 1 coupon, and in the USA as many as 6. The situation was similar with others European countries. Ponzi quickly realized that he could play on this.

So, the essence of the “Ponzi scheme” is that he offered people to make money by reselling stamps.

Good exchange rates contributed to this.

Unfortunately, there was a clear problem - there were not enough exchange coupons to satisfy the future demand for the Ponzi company's services. But Charles himself did not think about this at all. After all, he had no intention of resale. His goal was to create a simple financial pyramid, when the money of subsequent investors is paid to the previous ones.

So, in the same year, Charles Ponzi borrows $200 from a furniture maker friend, Daniels. With this money he rents an office, buys a table and two chairs (legend says that he had lunch with the remaining money). Then he registers a company, where he is the only employee at that time.

Ponzi's offer was unexpected for many Boston residents - he offered to invest in his papers and receive 150% of the invested amount in just 45 days. Those. if a person invested 100 dollars, then after 45 days he could expect to receive 150 dollars, and after 90 - as much as 200.

At the same time, the situation with Ponzi was strikingly different from what was happening in Russia in the 90s. The Italian spoke in detail about how he plans to make money by introducing people to his idea of ​​arbitration.

And people fell for it. People went to Ponzi in droves. Officials, police, ordinary citizens. Charles also fueled interest in his enterprise with commissioned articles in the press. And people fled for the simple reason that everyone (regardless of nationality) wants to become rich in the shortest possible time. Ponzi became increasingly famous. They believed him, the first investors actually received their money, and even newspapers such as The New York Times interviewed Ponzi. In general, things went well.

By the spring of 1920, the company employed 30 people, and 18-year-old Lucy Martelli was in charge of operational management. Ponzi himself withdrew from direct participation in the company's activities. In addition, Charles Ponzi's company escrow account was opened at this time with the Hannover Trust Company. It was through her that almost all Ponzi money passed. Many believe that HTC knew everything about this scheme, and even helped to pull it off.

In May 1920, Charles fulfilled his dream - he purchased a huge house for 35 thousand dollars. The mansion (and this was it) had 22 rooms, and it was located in the banking district of the Lexington quarter. But we didn’t have to rejoice for long. After all, within a couple of months the “Ponzi scheme” was exposed.

This happened in the middle of the summer of 1920. Then Ponzi’s “old friend” Daniels, who watched the Italian’s rise, sued him. He believed that Ponzi owed him half of all his profits, according to their agreement (yes, we are talking about borrowing that $400).

According to Massachusetts law, all Ponzi accounts were frozen during the trial (now such a terrible law no longer exists in this state). As you understand, for a financial pyramid, freezing accounts is a severe blow!

But that was only the beginning. Soon the government started an audit of the Ponzi company. Charles, under pressure from the state's attorney, stopped accepting the money. Investors flocked to Ponzi's doors to withdraw their money. Some managed to do this (according to some estimates, about 1000 people), but others, alas, did not.

Be that as it may, but auditing uncovered the fraudulent scheme of an Italian who did not do what he planned (and could not, since there were not enough coupons in circulation to cover the entire amount). The Ponzi company was an ordinary pyramid scheme where money was simply distributed. She had no profit. Money from new participants simply went to old investors.

The result of this whole adventure: out of the 10 million dollars received by Charles Ponzi, he was able to return only 8 million to investors. The rest, apparently, went to the salaries of his employees and himself. For his fraud, the Italian received only 5 years in prison.

After his release, Charles did not start a new life. He continued to create new scams. True, in scale they did not reach even one hundredth of the “Ponzi scheme”. All these were small matters, for which he was eventually deported to his homeland in 1934.

Charles did not stay in Italy for long. Approaching World War, and he went to seek his fortune in Brazil. There he died in 1949. The capital of the great financial swindler was only 75 dollars, which was enough for the funeral alone.

HYIP project is highly profitable investment instrument, which has a specially designed website with personal account(back office) for investment electronic money. You can earn about 1-3% per day on HYIPs or even more (depending on the type of project), which attracts lovers of quick and easy profits. Due to the fact that the activities of HYIPs imply the anonymity of the organizers and the opacity of the financial actions taken, more and more fake projects began to appear on the network, which, after collecting a certain amount of investor capital, close the program. In order not to fall for the tricks of scammers, you need to understand how hype projects work.

Most existing HYIPs work on the Ponzi principle. In this article we will look at what its essence is and how to correctly analyze the activities of HYIPs in order to reduce the risks of losing investor capital and at the same time make a good profit.

What is a Ponzi scheme?

Ponzi is an investment scheme in which profits are generated by the influx of Money from new investors. Up to a certain point, the project demonstrates success and stability. Profits are regularly paid to partners, and the program grows with new participants who invest money in the project. Over time, a period of stagnation (recession) sets in, when the flow of new capital investments stops or decreases so much that it is not enough to pay the existing partners of the fund. Then the project becomes scammed and it ceases its activities.

Often, the organizers of the hype, without waiting for such a moment, immediately close the project, collecting maximum amount investor capital. As a rule, program partners learn about this when accrued dividends stop flowing into their accounts. There are also cases when a HYIP stops paying interest to old investors, but continues to accept deposits from new investors.

When deciding to invest in HYIPs, the investor needs to carefully analyze the activities of the project, which will determine its solvency and reliability. Only with a competent approach and making the right choice investment strategy You can make a profit on HYIP projects.

Ponzi financing - how to conduct competent investment activities?

No potential investor can be 100% sure that the chosen project is an honest investment fund, and not a financial pyramid in the bad sense of this concept. However, based on some indicators, you can draw certain conclusions that will help you understand which program you have in front of you - a scammer or a really paying project.

• Fixed profit margin. Any financial activities is associated with risks, therefore not a single honest project will guarantee the receipt of the established profit;
• High interest rates. As a rule, fraudulent projects promise big profits in order to attract new participants;
• Website design and content. If a project is initially aimed at raising a certain amount of capital, as a rule, it does not have a multifunctional and reliable website. If a HYIP plans to carry out serious and long-term work, it creates a convenient and secure website;
• High affiliate fees. Most hype uses partnership programs to attract potential investors. This allows you to make payments to existing members and save on advertising. If the affiliate reward is too high, you should think about it. After all, each such payment reduces the real receipts of new capital. If the affiliate percentage exceeds 10%, most likely you are dealing with a scammer;
• Too active advertising. Most often, this method is used by projects that want to raise money and close the project in a short period of time. Advertising should be moderate and not aggressive.

Despite the fact that today existing online investment funds 95% operate according to the Ponzi principle, exclude this financial instrument Not worth it from your investment portfolio. Thanks to