A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.
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After having written the original post we were pointed out of a subsequent order passed by a Whole-Time Member of SEBI in the matter of Credent Industries where the Member in para 13 has observed inter alia as under to hold that the accused were operating a Ponzi Scheme.
13. Further, the preliminary findings of SEBI points out that Credent/Mr. Amaranjay Kumar is operating a "Ponzi Scheme" which is a fraudlent investment operation that pays returns to its existing investors from the money paid by subsequent investors, rather than any actual profit earned.