A Ponzi scheme involves deceiving investors by using new investors' money to pay previous investors, leading to financial collapse.
Ponzi schemes involve deceiving investors by using new investors' money to pay previous investors, creating an illusion of profits. The perpetrator misappropriates funds for personal use, leading to a collapse that results in all investors losing their money.
The most infamous example is Bernard Madoff's $50 billion Ponzi scheme, where thousands of investors were defrauded through false promises of high returns.
To run a Ponzi scheme, the individual typically falsely claims to invest in legitimate assets while diverting funds for personal gain, creating a cycle of unsustainable payouts to maintain the illusion of a successful investment.
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