Watch Out! 5 Famous Pyramid Schemes

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Pyramid schemes are a form of fraud that has been around for centuries. While the exact set up  varies, they basically work by recruiting new participants into the scheme, who are then encouraged to recruit even more people in order to make money. However, only those at the top of the pyramid actually make any money, while the majority of participants lose their investment. Here are five of the most memorable pyramid schemes in history:

  1. The Ponzi Scheme
    Charles Ponzi, an Italian immigrant, is credited with creating one of the most notorious pyramid schemes of all time. In the early 1920s, he promised investors a 50% return on their investment in just 90 days. However, instead of investing the money, he used the funds from new investors to pay off earlier investors. The scheme collapsed when investors demanded their money back, and Ponzi was eventually sentenced to prison.
  1. The Airplane Game
    This pyramid scheme was popular in the 1970s and 1980s and involved a group of women who would recruit new members and ask them to pay a fee to join. The women at the top of the pyramid would receive the majority of the fees, while those at the bottom would receive nothing. The scheme was eventually shut down by authorities, but not before many people lost their money.
  1. The Koscot Interplanetary Scheme
    This pyramid scheme was created in the 1960s by Glenn W. Turner and involved the sale of cosmetics and other products. Participants were encouraged to buy inventory and then recruit new members to sell the products. However, the products were overpriced, and the majority of participants lost their investment. Turner was eventually convicted of fraud and sentenced to prison.
  1. The Madoff Ponzi Scheme
    This pyramid scheme is one of the largest in history, with investors losing billions of dollars. Bernard Madoff, a former stockbroker, promised investors high returns on their investment by using a complex investment strategy. However, he was actually using new investors’ money to pay off earlier investors, and the scheme eventually collapsed in 2008. Madoff was sentenced to 150 years in prison.
  2. OneCoin
    OneCoin was a cryptocurrency pyramid scheme that promised investors high returns on their investment. The scheme was created by Bulgarian entrepreneur Ruja Ignatova in 2014 and quickly became popular in Europe and Asia. However, it was eventually exposed as a scam, with Ignatova disappearing in 2017. The scheme is estimated to have defrauded investors out of billions of dollars.

While some schemes have been shut down and those responsible brought to justice, it’s important to remain vigilant and do your due diligence before investing in any opportunity. Remember, if it sounds too good to be true, it probably is.

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