Activists welcome a federal government promise of tougher penalties for Ponzi schemes and other white-collar crimes. But what exactly is a Ponzi scheme?

WHAT IT IS: The con artist persuades people to invest, usually on promises of above-market returns.

WORKINGS: The operation itself does not generate profits in the stock market or through other investment vehicle. Returns to investors come from either their own money or money from subsequent investors.

DOCUMENTS: In some cases, investors get only authentic looking documents suggesting investment growth.

OPERATION: The scheme depends on an influx of new investor money and usually collapses because investor growth can't keep up.

VICTIMS: Often friends, family or members of the same organization.

ORIGINS: Named after Charles Ponzi, who emigrated from Italy to the United States in 1903 and spent time in Montreal before committing the fraud in Boston.