Question

Ms. Kuchinski is believe to be involved in a __________________, or an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

Answer 1

ponzi scheme

Step-by-step explanation:

A Ponzi scheme is set up by a portfolio manager that gathers money from different investors and then pays them interests or dividends using incoming funds from new investors. It is called that way because Charles Ponzi committed a huge and famous fraud scheme in the 1920s. The most famous fraudster that used a Ponzi scheme was Bernie Madoff who was arrested in 2008 after carrying out the most massive fraud of around $64.8 billion.