The Editor, Sir:

I am in no position to say whether or not any particular investment scheme is a Ponzi scheme. However, readers who have enough information about any investment scheme can decide, based on information and their own research.

According to Wikipedia, a Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns to investors rather than from net revenues generated by any real business. It is named after Charles Ponzi who initiated such a scheme between 1919 and 1920. About 40,000 people invested approximately US$15 million all together. Only one third of that money was returned to investors.

Ponzi schemes have flourished and crashed all over the world since then.

One notable scheme was initiated by a woman in Portugal, Dona Bronca. She was popularly referred to as 'the People's Banker'. She maintained a scheme that paid 10 per cent monthly interest. In 1988, she was sentenced to 10 years in prison she always claimed that she was only trying to help the poor, in her trial, it was proven that she had received the equivalent of 85 million euros.

Internet research has revealed that churches have also been implicated in Ponzi schemes, and church leaders have also received prison sentences.

Some people are of the view that not all Ponzi schemes are bad. Knowing more about Ponzi schemes gives investors something with which to compare the investment scheme that they are in or about to get in and make informed decisions.

I am, etc.,

WINNIE ANDERSON-BROWN

winab@cwjamaica.com