A Ponzi Scheme, for example, is a type of fraudulent investment SCAM in which money from new investors is used to pay off earlier investors. It is named after Charles Ponzi, who became notorious for using the technique in 1920. The SCAM typically involves promising high returns with little or no risk. In reality, the returns are usually too good to be true and the scheme eventually collapses when there are not enough new investors to pay off earlier investors.