It doesn’t take a genius to run a multi-million or even a multi-billion scam. The formula is simple: rob Peter to pay Paul. Spread the word and wait for people to beg you to take their hard earned cash.
Too many folks fall prey to a fugazi that’s been around for almost a century. The allure of making a quick buck is extremely difficult to resist for many. Never be one of them.
In this article, we reveal the tactics of some of the most notorious scammers around the globe so you can smell their tricks miles away. Here are 7 of the biggest pyramid scams in history.
1. Charles Ponzi – the Father of all Ponzi/Pyramid Scheme
The Scam: He talked people into investing in his business of buying and selling a particular type of postal coupon with a promise of 50 percent income in 45 days.
Trust Factor: Early investors tripled their money which led to positive reports on the newspaper. Even the Securities Exchange Company encouraged people to invest in Ponzi’s business.
Swindled Money: From 1919 to 1920, Ponzi cheated 40,000 investors who put $15 million (estimated over $170 million in today’s money) in his postal coupon company.
The Downfall: Ponzi got off easy. He served 5 years in federal prison.
The Scam: Petters convinced investors to fund electronic merchandise that did not exist to be sold to retailers who weren’t buying.
Trust Factor: Heard of Fingerhut and Polaroid? Petters owned those large companies legitimately.
Swindled Money: $3 billion
The Downfall: On December 2, 2009, Petters was arrested for fraud. He is currently serving a half a century prison sentence.
The Scam: the largest scammer in history put up a legitimate investment business to lure the rich and the very rich. Get this: you must have at least $20 million to buy in.
Trust Factor: Madoff was a former Nasdaq chairman and considered as one of the pillars of Wall Street.
Swindled Money: $65 billion
The Downfall: When the economy collapsed in 2008, Madoff’s scheme reared its ugly head. He’s sentenced to 150 years behind bars.
4. Wang Fengyou
: The Chinese scammer promised 32.5 percent income to every poor farmer who invested in his hoard of “special ants.” Those who participated nurtured the insects until they were ready to be churned into an aphrodisiac.
Trust Factor: The libido-enhancing product was sold to over 80,000 drug stores all over China. Wang appeared on various media outlets and was conferred with China’s Top 10 Entrepreneurial Leaders award.
Swindled Money: More than 1 million people bred insects for Wang, earning him $2 billion every year for eight years. His aphrodisiac’s main ingredient: a substance derived from Viagra.
The Downfall: Ant breeders marched on Wang’s HQ when he can no longer make payments. A month later, he was put behind bars with the possibility of being sentenced to death.
5. Syed Sibtul Hassan Shah
The Scam: The Pakistani scammer persuaded his neighbors to invest in his business. He promised to double their investments within a week.
Trust Factor: Shah was a science teacher in Pakistan before moving to the United Arab Emirates. When he returned, he told people about the “stock program” that he learned while he was in Dubai.
Swindled Money: The “Double Shah” bilked $880 million out of 3,000 investors.
The Downfall: Shah was charged with robbery and was arrested in 2007. Imagine this: people marched in protest against his arrest.
6. Damara Bertges and Hans Gunther Spachtolz
The Scam: The duo founded European Kings Club, a financial institution that promised to help the underprivileged. To buy a club share, an individual must pay 1,400 swiss francs with the promise of receiving 200 swiss francs every month for one year.
Trust Factor: They promoted the company as the “bank of the people,” exploiting the misgivings people shared in the banking system.
Swindled Money: Almost 100,000 German and Swiss investors were duped. The duo made an estimated $1 billion.
The Downfall: Bertges was sentenced to 7 years in prison. Her partner served time for 4 and a half years only. Even though the perpetrators were imprisoned, I don’t think justice was served.
The Scam: He put up the MMM company and promised 1,000 percent in dividends for investors. If something sounds too good to be true, it probably is.
Trust Factor: He advertised his business and actually paid people.
Swindled Money: Mavrodi’s MMM was raking in $50 million a day at its peak. In 5 years, he conned two million people for over $1.5 billion.
The Downfall: When authorities barged in on MMM offices for tax evasion charges, Mavrodi wasn’t ready to wave the white flag. Instead of caving in, he convinced investors that his missed payments was the government’s doing.
To appease his investors, he ran for office in the Russian parliament with the promise of initiating a government-sponsored payback program. He got elected and enjoyed immunity from prosecution. Mavrodi’s right to immunity was later cancelled by the parliament; he was apprehended by authorities in 2003.
Have you ever been invited to join a Ponzi scam before? How did you respond? Hit the comments! Thank you for reading our article on some of the biggest pyramid scams in history
Sources:
Business PunditThe RichestNeatorama
Subject: 7 of the Biggest Pyramid Scams in History 
December 28th 2015, 2:05 pm
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