>

The biggest swindlers: Charles Ponzi

Charles Ponzi, scheme ponzi, scammers

Charles Ponzi, ponzi scheme, scammersCarlo Ponzi, later Americanized in Charles Ponzi, was born in Lugo, in the province of Ravenna, Italy, in 1882. He arrived in the United States in 1903. He gambled away most of his money on the voyage to America. "I landed in this country with $2.50 in cash and $1 million in hopes, and those hopes never left me".

Ponzi started out working odd jobs, including as a dishwasher in a restaurant. From the United States, in 1907, he moved to Montreal, Canada, where he began working for Banco Zarossi, a bank founded by another Italian, Luigi Zarossi. Zarossi promised to all the depositors a yield of 6 percent, twice as much as the banks practised at the time.

After a few years, it was discovered that Zarossi was falsifying the books account of the company (actually Banco Zarossi was in bankrupt) and Ponzi was arrested and sentenced to 20 months in a Quebec prison after he was caught forging a bad check. Rather than tell his mother in Italy that he was in prison, he wrote to her in a letter that he was working at a Canadian prison.

In 1911 he returned to the United States and shortly afterwards he was arrested again. He was involved in yet another criminal venture, smuggling Italian immigrants across the border into the United States. After two years of prison spent in Atlanta, he moved to New York.

Returned to Boston, Ponzi did a large amount of work to try to survive and he founded several small businesses that ended all very badly. Probably in this period came the idea of the scheme that has since bears his name. Everything started from an idea that seemed brilliant: to take advantage of an apparent flaw in the United States postal system to buy cheap US stamps in Italy and sell them in the United States at a much higher price.

The system never worked, but Ponzi did not give up: he began to talk about his idea to many Italian immigrants, promised yields of more than 400 percent and began raising money. In a few years, he had raised millions of dollars. His system concerning the purchase of stamps, however, continued to fail. Ponzi was therefore forced to pay the returns he had promised to his early investors with the money investing newcomers.

Ponzi managed to get money by exploiting the ingenuity of Italian immigrants. He had a great rhetorical ability, was charismatic, dressed in a flashy way, and at least apparently was really rich. The scheme, however, could not last long. Ponzi thought of buying a chain of banks or a shipping company and with the profits, he was going to repay his investors, but the chain broke before reaching that point.

Ponzi's scheme began to creak, at one point the interests he had to pay exceeded the deposits of the new investors. In August 1920, The Boston Post began to investigate his returns. The investigation set off a run on Ponzi's company, with investors trying to pull their money out. His scam was discovered. Ponzi was arrested and repatriated to Italy. He died in 1934, in a hospice for poor people in Rio de Janeiro, Brazil.

 

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *

Pin It on Pinterest