A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The scheme is named after Charles Ponzi, who became notorious for using the technique in the 1920s. The idea is to use money from new investors to pay off the old ones until no more new recruits can be found and the whole scheme collapses, with the newest investors losing everything.