Noted
Italian immigrant to the
United States. In 1920, he claimed he had found a new and
novel way to make money, somehow related to
buying stamps in one country and selling them in another. He promised
investors a 50% profit on investment in 40 days, and to early investors, he did indeed deliver on this promise. But what he was really doing was keeping the money for himself, and paying back his original investors with money given to him by new investors. In other words, for every 10 investors who gave him $100 on January 1, he had to find 15 new investors to give him $100 before Feburary 14.
Any idiot can see that this strategy is bound to fail, since he would be bound to run out of either investors or new money within a year. However, it was tough to catch him, because while the money was coming in, no one wanted to turn him in. In promoting himself, Ponzi played on the idea that what he was doing was good for his Italian friends (a few were indeed getting rich), and claimed that government investigation of his operation was a plot to keep Italian immigrants down (the US did indeed have a spotty track record in its treatment towards its new citizens).
Today, implementations of Ponzi's ideas are also known as pyramid schemes.