Have you heard of Charles Ponzi? He was a notorious con artist in the 1920s and earned notoriety by duping investors with promises of an annual return in excess of 200%.
Is a return of $2,000 on a $1,000 investment realistic? When you consider the returns promised by financial institutions on some investments are closer to 2%, not really.
Ponzi schemes are still being used. Perhaps you’ve heard of Bernard Madoff, who was arrested in the U.S. in 2008.
If a friend brags about making huge returns or a lot of interest on an investment, be careful: people who run Ponzi schemes use the cash "invested" by their victims to pay fake returns and then pocket what’s left over. When they’re no longer able to find new investors and either the cash runs out or they’ve made enough money, they disappear or are caught.