The Ponzi Scheme of the Century

       If you are looking for one of the biggest ponzi schemes in recorded history, the ponzi scheme led by Bernie Madoff is the place to look. As a well-respected financier, Madoff convinced thousands of investors to hand over their savings, falsely promising consistent profits in return. He was caught in December 2008 and charged with 11 counts of fraud, money laundering, perjury, and theft. In the end, Maddof was able to con investors out of close to 65 billion dollars in savings and went undetected for decades.
Ponzi schemes are run by a central operator, who uses the money from new, incoming investors to pay off the promised returns to older ones. This makes the operation seem profitable and legitimate, even though no actual profit is being made. Meanwhile, the person behind the scheme pockets the extra money or uses it to expand the operation. To avoid having too many investors reclaim their "profits," Ponzi schemes encourage them to stay in the game and earn even more money. The "investing strategies" used are vague and/or secretive, which schemers claim is to protect their business. Then all they need to do is tell investors how much they are making periodically, without actually providing any real returns.
Ponzi schemes aren't usually very sustainable. The setup eventually falls apart after: (1) The operator takes the remaining investment money and runs. (2) New investors become harder to find, meaning the flow of cash dies out. (3) Too many current investors begin to pull out and request their returns. In Madoff's case, things began to deteriorate after clients requested a total of $7 billion back in returns. Unfortunately for Madoff, he only had $200 million to $300 million left to give.
Many people find it surprising that Maddow was able to fly under the radar for so long, seeing the fact that he was promising 50 percent returns in only 90 days, a deal too good to be true. Even though it does leave you a little skeptical at first, there is a good reason for why people trusted Madoff so much. Madoff was a well-versed and active member of the financial industry. He started his own market maker firm in 1960 and helped launch the Nasdaq stock market. He sat on the board of the National Association of Securities Dealers and advised the Securities and Exchange Commission on trading securities. It was easy to believe this 70-year-old industry veteran knew exactly what he was doing.

Sources:
https://www.businessinsider.com/how-bernie-madoffs-ponzi-scheme-worked-2014-7
https://en.wikipedia.org/wiki/Bernie_Madoff
https://www.cnn.com/2013/03/11/us/bernard-madoff-fast-facts/index.html
https://www.foxnews.com/us/bernie-madoff-ponzi-scheme-everything-you-should-know
https://www.britannica.com/biography/Bernie-Madoff