Ponzi scheme
Etymology
Named for Charles Ponzi, whose 1920 postal-coupon fraud in Boston became the notorious template, though the scheme predates him. "Scheme" comes from Greek "schema" (form, plan).
noun phrase · /PON-zee skeem/
A fraud that pays existing investors with money from new ones, rather than from any real profit.
What it names
A specific engine of financial fraud — one that must keep recruiting to survive and inevitably collapses.
Example
The fund looked stellar until it couldn’t find enough new investors — a classic Ponzi scheme unravelling.
Related idea
A pyramid scheme recruits each victim to enlist others in a branching tree; a Ponzi scheme is run from the center, with one operator quietly shuffling money between investors.