In Emily St. John Mandel's The Glass Hotel, the protagonist finds herself ensnared in the Ponzi scheme of a Wall Street investor. The "Ponzi scheme" takes its name from Charles Ponzi, an Italian immigrant and businessman who lived in Boston in the early 20th century. Ponzi schemes are fraudulent investments in which a business will promise above-average returns to investors under the guise that these returns are coming from above-average sales—in actuality, the funds are coming from other investors. Historically described as "robbing Peter to pay Paul," the Ponzi scheme provides the illusion of sustainable business to investors who are continuously lured in until the scheme eventually collapses.

The first known Ponzi scheme was not actually orchestrated by its eventual namesake. In 1899, nearly five years before Ponzi immigrated to the U.S., a New Yorker named William Miller perpetrated one of the earliest versions of this type of scam. Miller operated a business called the ...