Ponzi Scheme: Madoff Faces Life Sentence
Published / Last Updated on 28/06/2009
Ponzi Scheme: Madoff Faces Life Sentence
Financial fraudster, Bernard Madoff will be sentenced today for his $50bn ‘Ponzi’ style investment fraud.
A Ponzi scheme is where you trick people into investing in fake investments and encourage more investors by offering attractive and consistent returns. New investors monies are used to pay returns to existing investors and so the scheme continues until ultimately, money will run out if no new investors join
It is known as a Ponzi scheme as it is named after Charles Ponzi, who in the early twentieth century, became one of the first nationally known investment fraudsters to use such a scheme.
Madoff has had all his $170bn in assets seized and his wife, who is not the subject of a criminal investigation, has also had her $80m assets seized.
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