Charles Ponzi was an Italian immigrant who arrived in America in 1903. He got rich running a company that exchanged inexpensive Italian postage for US postage stamps, and then sold the stamps for full price and a tidy profit. The business did so well that new investors mobbed it, none suspecting that their money was only used to pay off existing investors and to pad the owner's pockets. The business generated no legitimate revenue and could sustain itself only as long as the money kept changing hands from new investors to old ones. Eventually the business collapsed, Ponzi went to federal prison and his investors were ruined.
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Posted 23 August 2010