[ohiovr]

Ponzi works like this: Say this big shot investor invites you into his fund that gives a great return of 16% compounded year over year. The investor encourages his investor to put in regular amounts over time. He's got a fancy website that tracks your account balance which of course is only a ledger he owns. No financial institution seems to carry any money. It is a confidence scam. As long as you are confident that your money is being increased regularly and you are waiting long into the future to take it out it is never discovered that the Ponzi scammer is stealing all the money and living an extravagant lifestyle.