The Original Ponzi Scheme
The first "Ponzi Scheme" was based — believe it or not — on simple postage stamps. Dreamed up in 1920 by Charles Ponzi of Boston, the scheme promised clients a 100 percent profit within 90 days if they paid him to purchase international reply coupons, items bought in one country and redeemed for postage stamps in another. The difference in each country's currency could produce tremendous profit. But in reality, Ponzi was simply paying his earliest investors with some of the money he was getting from those who fell for the scam later on — and then stealing the rest. Ponzi made $22 million in just a few months before being caught. After serving time in prison, Ponzi went on to sell swampland to suckers in Florida.