We all know what a Ponzi scheme is..

Not even really a scheme: promise people riches, and more riches if they don’t withdraw. Those who do withdraw, pay them from the new punters. It is so simple and easy that it prints money. No need for anything more complex?

What if the new players for your scheme were all fictitious people from another scheme?

Here’s how it could work:

Invent something so stupid it kinda makes sense if people buy it – like pet rocks
People don’t buy it but you falsify sales records
(everybody in the business is in on this…)
Based on amazing online sales you open some flagstaff physical stores, which also perform “brilliantly”.
(also, you own all the land immediately around the new stores)

Because the business, and the stores, are all so amazing, people build homes there. At prices suited to the amazingness.

So fake people pay fake rent to shop at fake stores paying fake rent because they are next to the amazing business that everyone apparently loves but nobody actually does. They lied.

Each on their own don’t appear to be overly valued, because its like 10% different to normal. But when you multiply a 10% gain by 10 and then by 10, you are making 10X as much.

So then you sell. For 10x more (maybe more like 5x) than you paid. Sell everything, quietly, unannounced, the same day.

You walk away. All the companies that owned the layers of the scam, go bankrupt and the principals were not real people.

OK I guess I got carried away, but the principle is sound. Multi-level ponzi. The shape will depend on the industry.