As long as the number of new investors stayed above the number of maturing investments, the scheme kept growing, with huge numbers of people taking part and enormous sums of money being invested.
Soon, however, investigators discovered that his scheme was not based on post reply paid coupons at all, but was a pyramid selling scheme which paid out profits by obtaining more new investors. The scheme quickly collapsed with investors losing almost everything and Ponzi was jailed.
Property booms often start out in the same way that Ponzi’s scheme did, based on genuine demand for housing in which investors can participate. They can also turn into bubbles created by speculative demand from investors in which renters and home buyers no longer take part, and so they turn into Ponzis.