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Charles Ponzi

Charles Ponzi mugshot

The arrest of Charles Ponzi:

Usually, when something is named after you – like a bridge, park, highway or airport – it's a sign of recognition and honor. It's quite another thing, however, when your name is attached to the word "scheme".

This brings us to Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, better known as Charles Ponzi. He was an Italian-American businessman and con artist in the 1920's.

Charles Ponzi

His name is associated with nearly a century of swindlers, because it was he who devised the money making scam named after him: the Ponzi scheme.

Ponzi promised clients a 50% profit within 45 days and 100% profit for 90 days, through the purchase of postal reply coupons in other countries…

Postal Reply Coupon

…while redeeming them at face value in the United States.

What Ponzi was really doing was paying early investors with new investor's money…

Pyramid Scheme

…and it's been a tried and true formula ever since…

Charles Ponzi and Bernie Madoff

…right down to Bernie Madoff at the turn of the 21st century.

Charles Ponzi zero dollar bill

Ponzi was charged in two indictments with 86 counts of mail fraud and faced a lifetime in jail. He pleaded guilty to a single count and was sentenced to five years in federal prison.

Released after three and half years, he was quickly charged with 22 counts of larceny in Massachusetts. This surprised Ponzi, who thought he had a deal for the state to drop charges if he admitted guilt to the federal charges.

His argument went all the way to the U.S. Supreme Court, which ruled against him and Ponzi was eventually convicted and sentenced to another seven to nine years.

newspaper report of Charles Ponzi charged with 22 counts of larceny

Released in 1934, he was eventually deported to Italy, where he died in poverty…

Charles Ponzi later in life

…but not in shame, telling a reporter in his final interview: "It was easily worth fifteen million bucks to watch me put the thing over."

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