麦道夫和他的"庞氏骗局" Madoff and his "Ponzi Scheme"

First of all, let's quote a news from Bloomberg on March 10th: "Bernard Madoff, the New York money manager accused of leading the largest Ponzi scheme in U.S. history, will plead guilty later this week to 11 criminal charges, his lawyer told a federal judge.

Ok, everyone has heard about Bernard Madoff and his biggest financial fraud in the history of america. So, what does a "Ponzi Scheme" have to do with it? What is a Ponzi Scheme anyway? let's see some explanation:

Ponzi Scheme are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons.

Decades later, the Ponzi scheme continues to work on the "rob-Peter-to-pay-Paul" principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.

中文介绍:

庞氏骗局是层压式推销方式的一种。参与者要先付一笔钱作为入会代价，而所赚的钱是来自其他新加入的参加者，而非公司本身透过业务所赚的钱。投资者通过吸引新的投资者加入付钱，以支付上线投资者，通常在短时间内获得回报。但随着更多人加入，资金流入不足，骗局泡沫爆破时，最下线的投资者便蒙受金钱损失。
庞氏骗局的称谓源自于美国的一名意大利移民（Charles Ponzi）。他曾成立一空壳公司，以上述方式从投资者身上赚得大笔金钱。

links: http://www.sec.gov/answers/ponzi.htm