Punishment for creating financial pyramids

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Money scams have been around for at least a century: one of the first documented financial schemes was put into practice in 1919. The essence and goals of investment pyramids have not changed since then, but the scale has grown significantly. In most cases, they disguise themselves as investment, charitable funds, businesses with dummy goods, or simply promise to make money "out of thin air." As a rule, such companies are champions in terms of speed of development, but they do not exist for long (1-3 years).

In 1919, Charles Ponzi opened a company in the United States with a simple offer: invest $100 and get $150 in 3 months. In just one year, the organizer became a very rich man, the number of investors bitcoin data grew, wealthy people from all over Europe invested, from politicians and artists to military personnel and police officers.


However, in 1920, at the request of one of the investors, the organization's bank accounts were frozen. All this was accompanied by rumors, and investors rushed to the company, demanding their money and the interest due to them. The pyramid fell.


New financial pyramids are modernized and use proven advertising tools, rely on modern methods of psychological influence to attract clients. The main feature of pyramids is the source of income - they promise a high return on investment, paying participants money at the expense of investments of new clients. According to experts, the global damage from the activities of current pyramids is at least $50 million per year.

One of the longest-lived pyramids was the fraudulent scheme of Bernard Madoff, which caused damage of more than $64.8 billion and harmed about 3 million people. Unlike other creators of financial pyramids, he did not promise super-high returns. For investors in the Madoff Securities fund, created in 1983, the return was a very real 12-13% per annum. Madoff bet on the absence of a commission for managing funds and implemented a proven Ponzi scheme: he took money from new investors and paid bonuses to previous ones. The remaining funds were used to buy treasury bonds with a modest profit of 2% per annum.


Madoff's fund was extremely popular among American brokers, investors and celebrities (one of the investors was director Steven Spielberg).


In 2008, a number of large investment companies wanted to get their money back with accrued interest in the amount of $7 billion, and the pyramid collapsed in an instant. The sentence for the organizer was harsh - 150 years in prison.