13 June, 2010


Ponzi scheme is a type of investment scam whereby perpetrators deceive their victims into believing in their pyramid scheme and entrust them with their hard earned money and other resources. The term Ponzi came after an Italian fraudster named Carlo Charles Ponzi, born in 1882.

Though, Bernard Madoff’s scandal created awareness of the resurgence of Ponzi scheme yet a lot of people still report cases of being victims of modernized Ponzi scheme. Bank accounts and retirement accounts have been drained as a result of the activities of these financial predators.


The primary cause of Ponzi scheme is greed. This is true both from the perspective of the victims and perpetrators of Ponzi scheme. Individuals and corporate bodies would not be defrauded if they hadn’t craved to make unrealistic return from their investment. One common feature of Ponzi scheme is the promise of triple return or more.

The second principal factor that is responsible for the existence of Ponzi scheme is ignorance. People are oftentimes ignorant of the activities of the perpetrators of Ponzi scheme. This is where the forensic accountants and fraud examiners really come in. it is part of the duties of forensic accountant to educate the populace. Everyone cannot be a forensic accountant or a fraud examiner but with our help as fraud fighters, they all need information on the activities of fraudsters at all time. If you call yourself a fraud fighter or forensic accountant and you are educating people on the activities of fraudsters and how to prevent fraud, then you are not whom you claim to be.

Fraud examiners should continually look out for signs of fraud and immediately relate same to all those that look up to them for professional advice.

Unless we all team together to fight this phenomenon, Ponzi scheme will still continue to an epidemic that will continue to virally spread. All pointers are pointing to the fact that those saddled with the responsibility of eradicating fraud and Ponzi scheme are not doing their best. If this remains this way, I would then say that Ponzi scheme is not only an epidemic but a pandemic. Some people have even coined a word for this situation; Ponzi-demic.

But do you know what? There is hope as many fraud fighting professional bodies that we have today are beginning to take the bull by the horn. You too can become a fraud fighter today by buying any of the books displayed below.

Search Amazon.com for ponzi scheme

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