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The Ponzi Scheme

By Rabbi Eli Teitelbaum

Ponzi schemes come and go every few years and lots of people wind up falling for them. They are built on lots of hot air. It begins when a slick talker and trusting looking person convinces you that he has discovered a great place for you to invest your money and guarantees that in a short time your money will be doubled or tripled. He now goes to another person and tells him the same baloney. In order to get people to believe and trust him, he takes the money he gets from the second person and gives it to the first person who now thinks he has discovered an oil well. Word soon spreads and everyone comes running to him to invest their money with him thinking he has the “Midas touch.”  When he runs out of fools, the entire scam comes tumbling down leaving everyone wondering how he could have fallen for this nonsense. This only proves how easily greed and need can distort our senses and fool those who are na├»ve enough to believe that everyone else is as honest as they are. If you think only others can fall for these schemes then better watch out, since you are an easy candidate.

The scheme is called the “Ponzi” after the first person who pulled if off and wound up sitting in jail for it. Obviously many people still fall for it despite the many people it has wiped out.

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