USA HISTORY

Detailed explanation-1: -Charles Ponzi’s original scheme in 1919 was focused on the US Postal Service. 1 The postal service, at that time, had developed international reply coupons that allowed a sender to pre-purchase postage and include it in their correspondence.

Detailed explanation-2: -A Ponzi scheme is another type of illegal get rich quick scheme. In a Ponzi scheme, the person or persons at the top promise investors they can double or triple their money. They take the investors’ money and keep it for themselves, paying out nominal amounts to people who invested earlier in the scheme.

Detailed explanation-3: -Ponzi symbolized the “get-rich-quick” mentality that infected the public during the 1920s; a vivid example was the Florida land boom. During the 1920s, sun worshipping Northerners discovered Florida’s warm winter climate and its sun drenched beaches.

Detailed explanation-4: -Charles Ponzi is the namesake for the Ponzi scheme, sometimes referred to as the “Rob Peter to pay Paul” scheme in use for many years before Ponzi employed it. The Ponzi scheme, which involves paying off early investors with proceeds from later investors, typically collapses when no more new investors can be attracted.

Detailed explanation-5: -A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi schemes are named after Charles Ponzi. In the 1920s, Ponzi promised investors a 50% return within a few months for what he claimed was an investment in international mail coupons.