Charles Ponzi
Charles Ponzi was to leave his name on any scheme whose success was fostered by quick returns to early investors that were paid by money invested by others later. Ponzi arrived in Boston on November 15, 1903 aboard the SS Vancouver with two dollars and fifty cents in his pocket, having lost his life savings gambling during the voyage. The 5 foot 2 inch alien learned English quickly and spent a few years doing odd jobs, including working as a dishwasher in a restaurant, where he slept on the floor. He managed to work his way up to the position of waiter but, in what was to presage his future life, he fired for thievery. In 1907, Ponzi moved to Montreal, Quebec, and became associated with Luigi “Louis” Zarossi, who was paying …show more content…
He offered friends and associates a 50 percent return on investment in forty-five days. The great returns available from postal reply coupons, he explained, made such incredible profits easy. Early investors were paid as promised, and his payments brought an ever-increasing rate of new investments. So great was the demand that Ponzi had to hire more agents to handle the inflow. By February 1920, he had taken in more than $5,000 (over $50,000 in current dollars). In one month, the investments quintupled, and the fury continued. By May, he had made $420,000 (over $4 million in today’s dollars). By July, he had made millions. People were mortgaging their homes and investing their life savings in the Securities Exchange Company. Foolishly, most did not take their profits, but reinvested. Charles Ponzi lived in the lap of luxury: he bought a huge mansion in Lexington, Massachusetts with air conditioning (rare for that time) and a heated swimming pool, and sent his mother a first-class ticket from Italy on an ocean …show more content…
Barron observed that though Ponzi was offering fantastic returns on investments, he himself wasn’t investing in his own company. In analyzing the returns, Barron observed that to cover the investments made with the Securities Exchange Company, 160,000,000 postal reply coupons would have to be in circulation. However, he found that only about 27,000 coupons were actually circulating. This helped to precipitate a panic on the Securities Exchange Company. On August 10, 1920, federal agents raided the Securities Exchange Company and shut it down. They found no large stock of postal reply coupons. Soon, they learned that Ponzi’s liabilities were estimated at
Charles Ponzi was to leave his name on any scheme whose success was fostered by quick returns to early investors that were paid by money invested by others later. Ponzi arrived in Boston on November 15, 1903 aboard the SS Vancouver with two dollars and fifty cents in his pocket, having lost his life savings gambling during the voyage. The 5 foot 2 inch alien learned English quickly and spent a few years doing odd jobs, including working as a dishwasher in a restaurant, where he slept on the floor. He managed to work his way up to the position of waiter but, in what was to presage his future life, he fired for thievery. In 1907, Ponzi moved to Montreal, Quebec, and became associated with Luigi “Louis” Zarossi, who was paying …show more content…
He offered friends and associates a 50 percent return on investment in forty-five days. The great returns available from postal reply coupons, he explained, made such incredible profits easy. Early investors were paid as promised, and his payments brought an ever-increasing rate of new investments. So great was the demand that Ponzi had to hire more agents to handle the inflow. By February 1920, he had taken in more than $5,000 (over $50,000 in current dollars). In one month, the investments quintupled, and the fury continued. By May, he had made $420,000 (over $4 million in today’s dollars). By July, he had made millions. People were mortgaging their homes and investing their life savings in the Securities Exchange Company. Foolishly, most did not take their profits, but reinvested. Charles Ponzi lived in the lap of luxury: he bought a huge mansion in Lexington, Massachusetts with air conditioning (rare for that time) and a heated swimming pool, and sent his mother a first-class ticket from Italy on an ocean …show more content…
Barron observed that though Ponzi was offering fantastic returns on investments, he himself wasn’t investing in his own company. In analyzing the returns, Barron observed that to cover the investments made with the Securities Exchange Company, 160,000,000 postal reply coupons would have to be in circulation. However, he found that only about 27,000 coupons were actually circulating. This helped to precipitate a panic on the Securities Exchange Company. On August 10, 1920, federal agents raided the Securities Exchange Company and shut it down. They found no large stock of postal reply coupons. Soon, they learned that Ponzi’s liabilities were estimated at