In the case of Bernard Madoff, a scheme was created as an investment program in which the early investors were paid out returns on their investments, not from earnings but from funds supplied by later investors, although they thought the earnings were the results of successful investments. Which of the following describes this scheme?

Question

Quizplus · Accepted Answer

The described scheme is known as a Ponzi scheme, in which early investors are paid out using funds from later investors, creating the appearance of successful investments without any actual earnings.

In the Case of Bernard Madoff, a Scheme Was Created