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The day the Ponzi scheme began to collapse
By adamg on Wed, 07/24/2013 - 10:28am
Ponzi in 1920.
Mass. Moments alerts us that on July 24, 1920, the Boston Post published an article detailing a scheme run by an Italian immigrant named Charles Ponzi that was in the middle of defrauding large numbers of people of millions of dollars from an office on School Street.
Ponzi fixed his attention on International Reply Coupons that could be used to buy postage stamps in foreign currencies. Exchange rates had not kept pace with global currency changes after World War I. Ponzi concluded that he could buy the coupons in bulk from countries with depressed currencies, like Italy and Romania, use them to purchase U.S. stamps at a discount, and redeem the stamps for American dollars. It was simple, and it appeared to be legal. Ponzi was not sure just how redeeming stamps for cash would work, but in December 1919, he opened for business anyway.
Wikipedia has more details. Also see: Ponzi's Scheme.
The BPL has a number of Ponzi photos by Leslie Jones, from the days after the scheme was exposed in 1920 to his deportation trial in 1934 (in the photo below, he's standing with his wife Rose, who divorced him and later became the secretary at the company that owned the Cocoanut Grove nightclub).
H/t Max Grinnell. Photos posted under this Creative Commons license.
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Comments
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi
I wonder if he's Italian.
ponzi's second life
changed his name to maury povich and lives a quiet life in montana.
Cocoanut Gove
I was just discussing this last night with a person who is a bit of a cocoanut grove historian. As it goes, his wife was in the club at the time of the fire doing the accounting. Someone else in the office tried to get her to leave when they learned of the fire but she refused to leave the money behind and ultimately died in the blaze.
Not quite
I remember reading an article about her around the time the Madoff scandal broke, comparing her to Madoff's wife. Rose Ponzi did work for the Cocoanut Grove holding company, but she didn't die in the blaze. She remarried and eventually moved to Florida and basically spent the rest of her life hiding from angry investors.
Listed as a witness to Cocoanut Grove
Seach for gnecco and there is a Rose Gnecco
http://www.archive.org/stream/reportconcerning00bo...
Jamaica Plain
Jamaica Plain connection:
http://rememberjamaicaplain.blogspot.com/2008/05/c...
Ponzi's Office
The building which housed Ponzi's office is still there on School St.
http://www.flickr.com/photos/eoconnor/5018166358/
Whenever I walk down there, I am struck by how all his thimble igging was going on in broad daylight mere steps from City Hall & a short walk from Newspaper Row on Washington St. In fact, it was the crowds which choked the block & began gathering as early as 6 a.m. in Ponzi's heyday which attracted the attention of "The Boston Post". The paper went on to win a Pulitzer for its investigative reporting & ultimate expose' of Ponzi's postal reply form scam (the first Pulitzer for a Boston paper, I believe)
If you're looking for a great "truth is stranger than fiction" beach read, I highly recommend local author Mitchell Zuckoff's recent book, PONZI'S SCHEME: The True Story Of A Financial Legend. As he makes clear & was also evident in the Madoff case, such schemes cannot succeed without a lot of people willing to believe the unbelievable.