Why are Nigerians falling hard for Ponzi schemes which is obviously a scam. Could it be an effect of the Recession or just outright greed? After MMM show Nigerians pepper finish, Twinkas don come to finish the work.
Unfortunately, not all financial schemes look the same, which makes it hard to spot one when you’re victimized. In true Darwinian style, clever scammers are able to thrive by consistently adapting and evolving their schemes to come up with new ways to con others out of their life savings. The Ponzi scheme is just one type of con. And, although it’s based on a classic formula, the idea can be applied in countless ways to deceive unsuspecting victims.
Ponzi schemes pop up frequently, though not all of them are big enough to make headlines. But every few years, a news story comes out telling how authorities have exposed an extensive and long-running Ponzi scheme. Two such exposed schemes (one that broke in 2006 and the other in 2008) were each reportedly bigger than any before them. Bernard Madoff, who orchestrated the most massive Ponzi scheme to date, conned about $65 billion from investors who came from all walks of life.
Why is the scheme so effective? And how is it that your victimized friends in the earlier example actually did make some money? We’ll examine the formula behind a Ponzi scheme as well as the recent instances that have popped up in the news.
But first, let’s take a look at Charles Ponzi, the notorious schemer whose name became so synonymous with the scam that it now bears his name. Charles Ponzi was best known for the financial crimes he committed when he conned investors into giving him millions of dollars, and paid them returns with other investors’ money.