Overstating the success rate of your business model, moving funds between subsidiaries when the investor agreements said they wouldn't be, and embezzling funds. Did I get the claims here right?
They told investors lies about how well the companies were doing and how the funds were to be used.
The Ponzi part comes from paying old investors with money from new investors but telling everyone it’s from the business’ cash flow, which was a lie.
https://www.ponzivineyards.com/
https://www.google.com/maps/place/Ponzi+Vineyards/@45.379619...
But if they had been honest about the performance of the businesses and the way the money was being used, they would not have attracted as much investment money. A few gullible people, but not $112 million worth.
The misrepresentation was key to attracting the investment.