I like to normally dwell on positive things with money making but it is important that we take care when considering various, so called, investment opportunities and hyped up money making claims.

Many frauds and cons are based on, or are a variation of, Ponzi Schemes. They are named after the originator, Charles Ponzi, who founded the classic pre-war fraud in the USA. The concern is that these type of programmes can still flourish, especially on the Internet. Members of such schemes are often convinced of the legitimacy of the plan and defend them with great conviction. It is also a characteristic of Ponzi Schemes that the promoters continue to claim their innocence, even if found guilty in a law court or are closed down by an official government body.

So what is a Ponzi Scheme and how do they operate?

On the outside they can look to be very respectable and are usually well administered, at least initially. The schemes look out for investors or members who are willing to hand over a sum of money with the promise of an exceptionally high return. The minimum can be as little as 50/$100 but can also be several thousands of pounds or dollars. The promoters state, or sometimes just infer, that the money will be put into some sort of high rate investment. It could be a secret bank, currency dealings, gilts or many other variations.

The whole point of a Ponzi scheme is that it must look to be a very attractive proposition. To work it has to be popular and growing. Why? Simply because the investments aren't true. The first investors receive their returns from money paid into the scheme by later investors. In other words they are money circulation plans.

Some of the larger frauds may actually invest part of the money, as a smoke-screen, but mostly there is no secret bank, currency dealings or whatever.

Ponzi schemes are sometimes difficult to detect in the early stages because they appear legitimate. Early investors are full of praise as they are paid out on time. The word soon circulates as to how various people have made big returns. So the scheme snowballs and attracts more and more money. Everything is run efficiently. Regular newsletters may go out, payments are made on time etc. Even the doubters may start to think that their first opinions were perhaps wrong, as all they hear are good reports from other members. The promoters often have impressive addresses in many countries and look to be a massive concern. In reality they are often run from

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