Business

Ponzi schemes alive and well

Ponzi schemes alive and well

The collapse of get-rich-quick online scams doesn’t deter potential customers, who flock to new customers. [Shutterstock]

Nearly 103 years ago, in December 1919, con man and former bank manager Charles Ponzi promised to double the money of those who invested in his newly founded company.

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A lucky few, who had entered first, did indeed succeed. The rest? Well, they should have been more careful. Their money was used to pay the earlier investors.

At its peak, $1 million was invested in this “Ponzi scheme” every week. After the inevitable collapse, in the summer of 1920, the enterprising founder spent several years in prison before returning in the 1930s with a similar plan involving Florida’s useless wetlands. He spent another seven years in prison.

In the decades that followed, gullible people looking to get rich quick always fell for a variety of Ponzi schemes.

Until it collapsed last May, Wind Media promised its 10,000+ members in Greece easy money if they only “liked” recommended videos and websites. The members were saddled with losses of several hundred to several thousand euros.

Since then, nearly a dozen “passive income” platforms have sprung up online. They tout early membership as the best option. They still use the same resources (likes for YouTube videos and online sites), but also sell “membership packs” that cost between $100 and $10,000, promising a steady monthly income stream of $14 to $1,400 – a monthly return on investment of 14%, that is. Subscribers should spend no more than five minutes a day liking videos. One such platform says that payments are made daily from 11 a.m. to 7 p.m.

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This platform, with a real address in Scotland, touted the benefit and presumed reliability of clicking on promotional materials from financial firms.

Other Ponzi platforms operate through gambling; it rewards those who make wrong predictions about sporting events. “It takes a time investment of a maximum of eight minutes per day; the chance of failure is 1 in 16′, it said, presumably with a straight face.

Another short-lived site, Rapid Minerals, promised subscribers to rent one or more bitcoin mining machines.

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