Scam operators often use their reputations or personal relationships to solicit investment money from friends, neighbors, co-workers, church members, or social groups.
Sometimes these individuals operate Ponzi schemes. In a Ponzi scheme, little or none of investors’ money is ever invested in the commodity markets, or betting exchanges, as promised.
A ponzi scheme is a fraudulent scam operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going. The operator of this kind of scam steals the money. Sometimes, the operator creates the illusion of a successful business by paying phony profits to early investors with some of the money the operator receives from later investors.
Before You Invest
We urge you to be skeptical when someone tells you that their services can earn you large profits, overnight success, with minimal risk, even if you have a personal relationship with the individual.