a fraudulent scheme in which people are recruited to make payments to the person who recruited them while expecting to receive payments from the persons they recruit; when the number of new recruits fails to sustain the hierarchical payment structure the scheme collapses with most of the participants losing the money they put in
An illicit money-making investment scheme whereby early investors are paid primarily or wholly by later investors. Eventually all such schemes fail to the detriment of recent (later) investors.