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A "Ponzi scheme" is a description of an investment operation where unusually high profits are paid to investors out of the money paid into the investment plan by new investors — as opposed to legitimate profits generated by business activity.

 

In a Ponzi scheme, investors are usually offered high returns on their investment in order to persuade new investors to join into the investment scheme.  These high investor profits demand that the flow of money from newly acquired investors increase in order to keep scheme going.

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Rather, the "investment plan" starts falling apart due to bad investments or declining market conditions and investors begin to voice their dissatisfaction.  Once complaints are made to local law enforcement, FBI, SEC, FTC, or CFTC, the investigatory period begins. 

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And, once that happens, it makes good sense to contact a good criminal defense lawyer.