Unspeakable Crimes The Most Infamous Ponzi Schemes in History  

Richard Rowe
155 votes 85 voters 10.6k views 18 items

Here in the modern world, most of us have developed a healthy cynicism that helps us look past "get rich quick" schemes with a smirk and an eye roll. So you'd think we would be able to avoid the total financial ruin that comes from joining in on a scam. And yet, when it comes to these infamous Ponzi schemes, we apparently are not as smart as we think we are.

In the face of real human cost, it's hard to maintain a sense of humor while poring through the true costs of greed. Hard, but not impossible. Oh, sure, it's got its moments (if you're into irony), but at the end of the day, even the most hardened cynic would struggle to find the punchline in the utter devastation some of these scams have wrought upon the poor, naive, and undeserving.

What is a Ponzi scheme? The basic definition involves a fraudulent company that promises big returns to early investors. Those returns are usually furnished by the money from later investors, instead of from a legitimate enterprise.

Indeed, these days, we tend to look at cases like Bernie Madoff and shrug it off with "Well, that's what you get for trusting Wall Street." But looking over this list of scams, it's hard to apply the same logic to the refugees of the Kosovo conflict, women and children fleeing anarchy in Albania, and the utter decimation of the poor in Haiti.

The last 30 years have been something of a new Golden Age for investment scams. Everyone's got a plan to get rich doing as little as possible; it's almost come to define the new American dream. But risking it all on a business that seems too good to be true can have disastrous consequences, as these examples of the biggest Ponzi schemes in history prove.    
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Charles Ponzi is listed (or ranked) 1 on the list The Most Infamous Ponzi Schemes in History
Photo: Metaweb (FB)/Public domain
Of course, some homage must be paid to the guy for whom the scheme is named, Charles Ponzi. From his home base in 1920s Boston, Ponzi bilked about 30,000 investors for a combined total of $8 million. His promise to double their investment within 90 days using a bizarre postal coupon re-mailing scheme seemed to pay off at first. Initial investors did indeed see their money doubled...using money from other investors. After those initial investors spread the good word of Mr. Ponzi's brilliance, the money from new investors came pouring in. Ponzi served five years in prison for using the mail to defraud. 
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Bernard Madoff is listed (or ranked) 2 on the list The Most Infamous Ponzi Schemes in History
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Madoff's name is one you can't have avoided if you've seen a TV in the last ten years. Madoff was seemingly born in the sewer; former chairman of the NASDAQ stock exchange, Madoff knew all the ins and outs needed to scam an incredible $65 BILLION from investors. Worse, Madoff's victims weren't his fellow Wall Street scumbags. They were generally retirees and non-millionaires who'd sunk their life savings into his scam. After a failed suicide attempt, Madoff was sentenced to 150 years in Club Fed. There, Bernie received news that his son and accomplice, Mark Madoff, had also attempted (and had been successful at) suicide. 

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Dona Branca

Dona Branca is listed (or ranked) 3 on the list The Most Infamous Ponzi Schemes in History
Photo: via Twitter

A villain to some and a hero to others, Branca's rags to riches story started a chain reaction of Wall Street scams that continues to this day. Born poor and raised in the slums of Portugal, Branca opened a "bank" using Ponzi scheme investment strategies. Her goal was to provide low-interest loans to the poor, and that she did -- while also maintaining her original Ponzi scheme and making about $120 million on it herself.

Branca began her scheme in 1970 and got caught in 1984. During her very public trial, Wall Street rediscovered the incredibly profitable art of investor scams. That year, the number of Ponzi and pyramid schemes exploded. Indeed, Dona Branca's bizarrely inspiring rags to riches tale effectively made her Patient Zero for today's plague of investment scams. 
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Mutual Benefits -- or "How I Learned to Stop Worrying and Profiteer from AIDS"

Mutual Benefits -- or "How... is listed (or ranked) 4 on the list The Most Infamous Ponzi Schemes in History
Photo: via Wikimedia

Florida-based Mutual Benefits, run by Peter Lombardi, made a killing by profiteering on AIDS. They claimed to provide what are known as "viatical settlements" on life insurance to HIV patients. A viatical settlement is a kind of early lump sum payout on a life insurance policy, and it is a legitimate (even merciful) concept for people who are suffering from terminal illnesses.

Viaticals can help to make the last years of a dying person's life worth living. Except that Lombardi wasn't doing it. Instead, he kept the $1 billion raised from over 28,000 investors, and wound up with a 20-year trip to prison in return. Yes, prison...the one place where someone like Lombardi may become far better acquianted with HIV than he expected.
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