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Dona Branca’s Ponzi Scheme

Maria Branca dos Santos, a common Portuguese woman, commonly referred to as Dona Branca, decided to enrich herself by opening her own bank in 1970.
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Maria Branca dos Santos, a common Portuguese woman, commonly referred to as Dona Branca, decided to enrich herself by opening her own bank in 1970.

We do not know much about the origins of Mary Branca dos Santos. It’s only known that she was from an extremely poor family and even had no access to primary education. Despite the fact that she was almost illiterate, she had great quantitative reasoning and mathematical skills.

In 1970, this poor Portuguese woman decided to launch her own “bank”. Attracting customers, she promised them the interest rate fantastic for Europeans — 10% per month. During the entire 14 years not so wealthy residents from across the country carried the money to Dona Branca’s bank. Branca herself received the honorary title — “The People’s Banker”.

But in 1984 the pyramid collapsed, Maria Branca dos Santos was arrested and sentenced to 10 years in prison. She was one of the last inmates of Convento das Mónicas when it was dismantled in 1989.

In 1993, Dona Branca’s story was screened by the Portuguese National Opera «A Banqueira do Povo» — “The People’s Banker”. The People’s Banker died alone.

Ponzi Scheme is an investment scheme that provides incomes of earlier investors on account of the funds received from later investors. At first, it may seem perfectly legitimate, but Ponzi scheme is usually destroyed as soon as the flow of funds from new investors is no longer sufficient to make payments to the old ones.

In some cases, Ponzi scheme is primarily used in good faith intended to make a profit and to meet all investors’ obligations. However, in most cases, the scheme is created for fraudulent purposes to bring benefits to its organizers, who make almost no effort to make a profit for investors.

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