Reply #8: I've come to the conclusion most of these aren't 'Ponzi Schemes'.

[Hugin]

Instead they follow the pattern of a con played in the Old West...

It ran like this, a flamboyantly dressed stranger would come into town and very conspicuously place a very full envelope into the Hotel Vault for 'safekeeping'... Implying it was stuffed with cash.

The stranger would then take advantage of the generosity of the locals drinking, gambling and whatnot on a tab. Insinuating that they would be paid for their services from the money, but, it was inconvenient to get the money just then, because the money was in the hotel vault.

This would continue for awhile until the stranger (as Mark Twain would say) started to smell like three-day-old fish.

Late one night the stranger would sneak off... When the villagers discovered he'd gone they would rush to the Hotel Safe to see if he'd left the money. What they found in the envelope was typically cut up newspapers sometimes sandwiched between a couple of low denomination bills.

THIS is what we are dealing with...