By Christopher Zoukis
Chapter One: a quick overview of what a Ponzi scheme is, along with a hypothetical example.
Chapter Two: what is and what is not a Ponzi scheme. Pyramid schemes are not Ponzi schemes. A bubble is not a Ponzie scheme. Robbing Peter to pay Paul is not a Ponzi scheme.
Chapter Three: 520 Percent Miller. William Miller opened for business in 1899, in the city of New York. He called his company the Franklin Syndicate. Miller was called “520 percent Miller” because he promised 10% interest per week on any money invested with his company. He defrauded investors out of $1 million (in 1899 dollars). After he was caught, Miller spent ten years in prison.
Chapter Four: Between 1991 and 1994, a Romanian named Ioan Stoica ran a company called Caritas. Caritas promised investors 800% interest on their investment. A fantastic pledge, which was made even more fantastic by the promise that it would happen in six months. No one thought it was too good to be true. Over 400,000 people invested a total of $1 billion (US dollars). When Caritas went under, it owed $450 million. Stoica was given 7 years in prison for fraud. But his gall knew no limits. He appealed and the sentence was reduced to 2 years. Then he appealed that sentence. In the end, he received a sentence of 18 months in prison. He pocketed $550 million.