Word: ponzi
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Dates: during 1970-1979
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...1920s, state officials have uncovered what could be the biggest and most Byzantine fraud of them all. As many as 80,000 investors and buyers of lots may have been bilked of $1 billion by development companies and mortgage brokers in Southern Florida. According to investigators, the Ponzi-like scheme worked this way: the developers bought nearly worthless tracts of land, subdivided them and sold homesites at inflated prices; they used the proceeds to pay high interest on bogus notes sold to investors under a false claim that the notes were secured by first mortgages on the homesites. When...
...Home-Stake's victims were putting in money that they would otherwise pay out in taxes. Trippet for a while surprised them by paying handsome dividends, so many upped the ante, investing more than they would have for tax purposes. Apparently, Trippet did it by running a Ponzi scheme, a type of swindle named for Charles Ponzi, a conman who used it to shake more than $10 million out of the citizens of Boston in 1919 and 1920. The principle is simple: the first group of investors are paid dividends out of the money contributed by newer investors. Eventually...