Who is carlo ponzi

All rights reserved. Breadcrumb Home Cite Carlo Ponzi. See also:. Bernard Madoff. Trending Here are the facts and trivia that people are buzzing about. But prior to , few people outside Boston's Italian community had ever heard of Charles Ponzi. He also claimed to have studied at the University of Rome, but said that he was not suited to the academic life.

That is, I had arrived at the precarious period in a young man's life when spending money seemed the most attractive thing on earth. When his money ran out, young Ponzi decided the wisest course of action was to head west. On November 15, , he stepped off the gangplank of the SS Vancouver in Boston Harbor with only a couple of dollars in his pocket—the result, he said, of being taken in by a cardsharp during the transatlantic crossing.

The road to riches was a long one for the ever-optimistic Ponzi, who waited and bused tables in New York City, painted signs in Florida and worked small jobs up and down the East Coast. In , he headed back to Boston in response to a newspaper ad placed by merchandise broker J.

Poole, who needed a clerk. He soon met young Rose Gnecco on a streetcar and wooed her energetically. A small, pretty woman from a modest background, Rose was swept off her feet by her older, seemingly sophisticated suitor. Rose's youthful innocence shines through even in newspaper photographs, as does her unswerving devotion to her husband.

The couple married in February Ponzi took over his father-in-law's grocery business and proceeded to make a mess of it. He had already left Poole, who apparently failed to recognize his new clerk's latent financial genius. It was not long before Ponzi struck out on his own, and finally hit upon the scheme that—for a short time—was to make him rich beyond his wildest dreams.

He had come up with the idea for an international trade journal, which he believed could make a tidy advertising profit. Following a brusque rejection by the bank president, Ponzi sat alone in his little School Street office and pondered his next move. It came to him while opening his mail one day in August As Ponzi relates in his shamelessly exuberant autobiography, The Rise of Mr. Ponzi , a business correspondent from Spain, interested in learning more about Ponzi's aborted journal, had enclosed a small paper square that put the well-oiled wheels of Ponzi's imagination into overdrive.

The little scrap of paper was an international postal reply coupon, and the Spanish correspondent had enclosed it in prepayment of reply postage. Purchased in a Spanish post office for 30 centavos, it could be exchanged for a U. But the Spanish peseta, Ponzi knew, had fallen recently in relation to the dollar. Theoretically, someone who bought a postal reply coupon in Spain could redeem it in the United States for about a 10 percent profit.

Purchasing coupons in countries with weaker economies could increase that margin substantially, he reasoned. It should be possible, then, to make a financial killing by buying huge quantities of these coupons in certain overseas countries and redeeming them in countries with stronger currencies.

Ponzi called his new business the Securities Exchange Company, and set out to promote his idea. It was a big idea—one that Ponzi managed to sell to thousands of people. He claimed to have elaborate networks of agents throughout Europe who were making bulk purchases of postal reply coupons on his behalf. In the United States, Ponzi asserted, he worked his financial wizardry to turn those piles of paper coupons into larger piles of greenbacks.

Pressed for details on how this transformation was achieved, he politely explained that he had to keep such information secret for competitive reasons. Of course, there was no network of agents. Nor, for that matter, did Ponzi expend any effort to corner the market on postal reply coupons. Dunn's book, Ponzi! The Boston Swindler , provides a dramatized account of Ponzi's wild ride to riches and shows that, if anything, Ponzi's genius lay in psychology, not finance. Ponzi knew that his concept—the path to easy riches—was so alluring that the worst thing he could do was try to sell it too aggressively.

Borrowing a page or two from Tom Sawyer , he cultivated an image among friends and acquaintances as a man on the verge of wealth who preferred not to discuss his good fortune in detail—unless, of course, he was pressed. Only after his victims were well primed was Ponzi ready to dangle his bait: the grand plan in which his investors received 50 percent interest in 90 days. Later he sweetened the pot, promising 50 percent interest in 45 days.

By December, the money had begun to roll in. Most of the actual investment pitches were done by sales agents who were trained by Ponzi and received 10 percent commissions for investments that they brought in to him.

He thought he was destined to be rich. He boasted a return of percent interest in 90 days, and the world wanted in on it. Ponzi and his staff brought in a million dollars per week. Desk drawers, file cabinets, closet space, and virtually any extra storage area were filled with investors' hard-earned cash.

The scheme Ponzi, who swindled the gullible out of millions by , invented what came to be known as a Ponzi Scheme, a scam in which early investors are paid with money from new investors similar to today's "pyramid scheme".

The con game had been around for years, perhaps centuries. But Ponzi played it on such a grand scale, with such flair, and in full view of the media and the world, that he earned a prominent place in criminal history.

Some historians have described Ponzi as "a celebrity. Plenty of Americans in other countries could include such a coupon in a letter, to be redeemed at the post office for enough money to send a reply. Ponzi later boasted that he'd taken in a million dollars in new investments the day the report ran.

Things were starting to look less rosy for the scammer, though. Although he'd largely placated his investors after Barron's report, Ponzi must have realized his window of opportunity was closing. He hired a publicist, William McMasters, but the PR man saw through Ponzi's lies and renounced his client in the press.

Of Ponzi, McMasters said, "The man is a financial idiot. The next month, regulators raided Ponzi's office and discovered that he didn't have a huge quantity of postal reply coupons. Ponzi pled guilty to one of these charges in exchange for a light sentence of five years. He served around three and a half years, then got his release to face state charges, for which he received a sentence of nine more years.

But before he could go back to jail, he jumped bail and tried to start new scams in Florida and Texas. You'd think the government would have learned their lesson about trusting this guy. Eventually, though, his time on the lam ran out, and he served his whole sentence. Upon his release, Ponzi was deported to Italy and spent the rest of his life in poverty before dying in in Rio de Janeiro, where he's buried in a pauper's grave.