Madoff's alleged $50 billion fraud hits other investors - Yahoo! Finance: "NEW YORK (Reuters) - Investors scrambled to assess potential losses from an alleged $50 billion fraud by Bernard Madoff, a day after the arrest of the prominent Wall Street trader."
This has to be the biggest (alleged) Ponzi scheme in history. Ponzi (see photo) is credited with inventing the scam where the crook poses as an investor, gets money from a bunch of victims, tells them he has invested it, and then keeps it. He never invests at all, or just invests some of it. The scheme is that he pays off a few of them with money from some of the other investors. Then he just keeps paying off a few people with new money from other people every so often, while he continues to enlarge the number of victims. If he keeps half the new money and uses the other half to pay off a few people, the word spreads of this great new investment company.