A Ponzi scheme pays existing investors from new investors' money rather than from profit. Its modern form, the high-yield investment programme, advertises a fixed daily or monthly return — 1% a day, 5% a month — and pays referral rewards so that members do the recruiting. The rate itself is the proof: 1% a day compounds $1,000 into billions in three years.
Money in from new investors, money out to old ones, and no business in between.
That is a Ponzi scheme, and it has not changed since 1920. What changes is the story told about where the returns come from — bond trading, crypto mining, foreign exchange arbitrage, an association with a Fortune 500 company — and the wrapper it is sold in.
Its current form is usually called a high-yield investment programme, and it has one distinguishing feature: the rate is advertised. Not “strong returns” or “outperformance” but a number, fixed and guaranteed. HyperFund promised 0.5% to 1% a day. A Texas trust promised 3% to 6% a month.
That advertised rate is the most useful thing on this page, because it is disprovable before you know anything else. One per cent a day, compounded, turns $1,000 into more than $37 billion in three years. There is no business behind it, so no description of the business can be true.
The number arrives before any explanation. Fixed, guaranteed, and quoted per day or per month rather than per year — which makes it sound smaller than it is.
Where it could have stopped
Compound the rate. 1% a day is about 3,700% a year. 5% a month is about 80%, sustained and guaranteed. Nothing liquid does that, and anything that could would take institutional money at a lower cost than yours. The test needs no expertise, no research and no access to anyone honest — and it is available in the first sixty seconds.
Crypto mining. International bond trading. Forex arbitrage. Always offshore, always proprietary, always exactly the kind of activity an outsider cannot verify — and in the SEC’s allegations, frequently not happening at all.
A “membership package”. An “irrevocable trust”. A “programme”. The word chosen is never “investment”, partly because of how it sounds and partly because of what would then have to be registered.
This is the load-bearing element. Not an advertisement — a colleague, a cousin, someone from your church, who has been paid real money and believes every word.
And they are real. They come from the deposits of people who joined after you, and they are the only evidence the scheme will ever produce. Being paid is the mechanism, not the proof.
Bringing in others improves your position faster than waiting does. From this point, warning your friends costs you money — which is the most elegant and most destructive part of the design.
A platform migration. An audit. A regulatory review. New terms. Reinvestment is encouraged and often rewarded, which buys the operator months.
PGI Global collapsed in late 2021 and was charged in April 2025. By the time a case is filed the money has been gone for years, and the collapse is followed by recovery approaches aimed at the same list.
The introduction comes from inside your trust network. Every other scheme has to build credibility from nothing. This one borrows it from someone you already believe, who is not lying.
The evidence is real money. Early payouts arrive on time, in full, and can be spent. Nothing in ordinary life prepares people to treat receiving money as a warning sign.
Daily and monthly framing shrinks the number. “One per cent” sounds modest. “Three thousand seven hundred per cent a year” does not. The unit is chosen for exactly this reason.
The story is unfalsifiable by design. You cannot audit an offshore mining operation or a proprietary bond desk, and the inability to check is presented as sophistication.
Recruitment aligns your interests against the truth. Once there is a referral structure, the people best placed to warn others are financially punished for doing it.
Sunk cost and social cost compound. Doubting the scheme means doubting the relative who introduced you, and telling other members means telling people who are also invested.
And there is a manufactured answer for the sceptic. The illusory “pay orders” in the Texas case, the Fortune 500 association in HyperFund, the licences and audit letters elsewhere — each exists to close the one hard question in the room.
Unlike most schemes on this site, this one is not concentrated in a region. The three cases here run from Dubai to Dallas, and the operators charged include a Hong Kong-based businessman, a Virginia entrepreneur and a Texas trust promoter.
What the enforcement record does show is a consistent shape.
Promoters are charged before founders, and often instead of them. In the HyperFund matter, a promoter has been sentenced and another has pleaded guilty, while the alleged co-founder’s case remains pending and unproven. Founders are typically outside the jurisdiction; promoters are local, visible and have been paid traceably.
The lag between collapse and charge is measured in years. Three to four is typical across these cases. Tracing crypto flows, identifying investors across dozens of countries and building a securities case is slow, and the assets do not wait.
And the vehicle is chosen for its legal connotations. Memberships, trusts, programmes — wrappers that are not obviously securities. The SEC charged registration violations, not only fraud, in all three cases here.
The SEC charged Ramil Palafox on 22 April 2025 over PGI Global, a purported crypto and foreign exchange trading company that allegedly raised about $198 million on guaranteed high returns and multi-level referral incentives. The SEC alleges he misappropriated more than $57 million and paid earlier investors from later ones. The charges are allegations and have not been proven.
The SEC charged three Dallas–Fort Worth men on 29 April 2025 over a scheme that allegedly raised at least $91 million from more than 200 investors, promising 3% to 6% a month from an international bond trading business the SEC says was not real. Investors were also offered "pay orders" as purported protection. The charges are allegations and have not been proven.
HyperFund sold "membership" packages promising 0.5% to 1% a day in passive rewards, said to come from large-scale crypto mining. The SEC and the Justice Department allege there were no mining operations and no revenue but investor money. One promoter has pleaded guilty and another has been sentenced; the alleged co-founder's case remains pending, and those charges are allegations.
If you are considering it. Compound the rate first — it takes a minute and it usually ends the question. Then check the two registers: whether the investment is registered with your securities regulator, and whether the person selling it is licensed. In the US that is the SEC’s EDGAR and Investor.gov, and FINRA BrokerCheck; most countries have equivalents.
Then ask the question the pitch is built to avoid: if this return were real, why would it be offered to me rather than taken entirely by institutional money at a lower cost?
If you are already in. Request a full withdrawal of your principal today, not a partial one, and not next month. What happens next tells you everything, and it is the only test that cannot be answered with a story. Do not reinvest returns while you wait for an answer.
Stop recruiting immediately, whatever it costs your position. And understand the exposure: in the US, investors who withdrew more than they put in have been sued by court-appointed receivers to return the excess. “Getting out ahead” is not always the end of it.
If it has collapsed.
Three streams, in fixed proportions.
Payouts to earlier investors — the largest share, and the operating cost of the illusion. The SEC alleges most of PGI Global’s remaining investor funds went to paying other investors their purported returns and referral rewards.
Referral rewards to the members doing the recruiting, which is the marketing budget.
And extraction, which is the point. More than $57 million allegedly misappropriated at PGI Global; Lamborghinis, watches and homes; a $5 million house in the Texas case. Physical assets, bought early, because they are the part that survives the collapse.
Where the scheme is crypto-denominated the deposits move on-chain within days, through the chain-hopping and exchange routes described on the fake platform page. Where it is not — the Texas trust took ordinary money — the route is bank accounts, entities and property, which is slower and leaves more behind.
The other half of this story
Our sibling site Clean on Paper explains where the deposits actually went — and why the receivers appointed after a collapse recover cents rather than dollars.
No agency publishes a line item for most of the schemes on this site, so these charts show the official categories that contain this scheme. Each series is labelled with the agency's own category name. See how the mapping works.
A Ponzi scheme pays returns from new deposits and does the recruiting itself; a pyramid scheme pays members to recruit and the returns come mostly from recruitment. Modern HYIPs are both at once — HyperFund promised a daily rate and paid referral rewards — which is why regulators use the words interchangeably in practice.
Compound it. 1% a day is roughly 3,700% a year; $1,000 becomes more than $37 billion in three years. 5% a month is about 80% a year, sustained, guaranteed, which nothing liquid does. If the number survives that test, the next question is why they need your money rather than institutional capital's.
It proves money is arriving from somewhere, and in a Ponzi scheme it arrives from people who joined after you. Being paid on time is the mechanism, not the refutation — Bernard Madoff paid on time for decades. The test is a full withdrawal of principal, requested today.
Usually not. The referral structure means the person telling you is normally an investor who has been paid and believes it, and who will lose money too. That is what makes these schemes spread through churches, families and professions rather than through advertising — and it is why questioning one feels like an accusation.
Some people do, and their gains are other people's losses — which in US law can also make them liable to a court-appointed receiver for the payments they received. Planning to exit before a collapse is not a strategy; it is a bet on timing an event whose date the operator chooses.
Very little. A registered company is a name, a number and a bank account, all of which check out. What matters is whether the investment itself is registered with the securities regulator and whether the people selling it are licensed — both are searchable in minutes, and both were absent in every case on this page.
Report it
Reporting is what produces the enforcement data on this page. Find the right agency and phone number for your country on the report page. If money moved in the last few hours, call your bank first.