Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

How many people were defrauded by Charles Ponzi's scheme?

1. 20,000

2. 30,000

3. 40,000

4. 50,000

The correct answer is: 40,000

Charles Ponzi's scheme, which was infamous for its promise of high returns on investments, ultimately defrauded a significant number of individuals. The correct answer reflects historical estimates that suggest around 40,000 people were involved in or affected by the Ponzi scheme. Ponzi promised investors substantial profits from a scheme that involved buying and selling international postal reply coupons, which was unsustainable. As he attracted more investors, he used the funds from new investors to pay returns to earlier ones rather than generating legitimate profit, a hallmark of a Ponzi scheme. The eventual collapse of this scheme highlighted the devastating impact on thousands of investors, leading to widespread financial losses and contributing to the ongoing dialogue about the necessity of regulatory measures for investment schemes. While other figures may have been considered, such as 20,000, 30,000, or 50,000, the most accepted estimate aligns closely with the number of 40,000 victims, illustrating the large scale of Ponzi's operations and the extensive damage caused to individuals' finances and trust in investment systems.