A scam which is usually carried out on the general public, by making returns of high promises in a shorter time period. It is primarily based upon paying off the early investors first and the long term liabilities later on. However, the system is susceptible to crash, and usually, the perpetrators abscond before that happens.

More On This Topic

Link to This Definition
Did you find this definition of PONZI SCHEME helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary