A scam, named after its most prolific perpetrator Charle's Ponzi who ran a large scale version of the trick in 1920.

The scheme relies on attracting investors using empty promises about a potential business investment, and initially relies heavily on the social engineering skills of the scam artist. Once some initial money is invested, the scammer will pay out a return on the investment to prove that the venture works. In reality, this money is the same money that was initially invested, but it convinces the victims to invest more heavily and attracts more participants. This cycle continues until the scam artist receives an amount he is happy with and disappears taking all of the money for himself.