Q: Bernard L. Madoff is facing life in prison for operating a vast Ponzi scheme that began at least 20 years ago and consumed billions of dollars of other people's money.

What does Ponzi scheme mean?

Ponzi scheme is what is popularly known here as the “pyramid selling” (which is illegal in China), an investment system that pays early investors (handsomely) with money paid by later investors, who are often recruited by the early birds themselves.

The scheme was named after American Charles Ponzi (1882-1949), one of the first swindlers to profit from the pyramid scheme.

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Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.