No. 5: Charles Ponzi, of Ponzi scheme fame, set up shop in Boston

Printed from: https://newbostonpost.com/2016/05/26/no-5-charles-ponzi-of-ponzi-scheme-fame-set-up-shop-in-boston/

You’ve probably heard of a Ponzi Scheme – in 2009 Bernie Madoff was sentenced to 150 years in prison for his biggest-ever Ponzi swindle. But did you know that Charles Ponzi, the eponymous originator of such scams, set up the first one when he lived right here in Massachusetts? For a time, he resided in a luxurious home in Lexington, which recently went on sale. Early in the 20th century, the Italian immigrant figured out how to turn a profit on an aspect of the international mail system. Only days after beginning his operation, Ponzi began advertising to investors, promising a 50 percent return on investment in a matter of days. And at first he delivered, attracting more and more investors. He paid off early investors out of new investments he received, not from stamp profits, which could never have provided such a lucrative return. Ponzi was eventually taken down by Clarence Barron, a pioneering Boston journalist who became the owner of Dow Jones & Co. and its Wall Street Journal. Barron noticed something fishy about Ponzi’s operation, which had made the Italian immigrant a millionaire almost overnight. Barron showed that Ponzi’s claims couldn’t be real, leading to a fraud investigation that put the perpetrator in prison for nine years – a relatively light penalty compared with Madoff’s 150 years. Ponzi died in poverty in Rio de Janiero in 1949.

<<< GO BACK | CLICK HERE FOR NEXT >>>

BACK TO THE BEGINNING

Comments

comments