A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. Today, Metro Jacksonville briefly highlights the life of the early 20th century's most notorious swindler, the guy that gave the Ponzi scheme its name: Jacksonville's one-time sign-painter Charles Ponzi.
Charles Ponzi (the short guy) after his arrest in Texas after trying to jump to Italy. He is being escorted back to Boston for stay in state prison. Courtesy of the Leslie Jones Collection at the Boston Public Library.
After posting a $1,500 bond and appealing his conviction, seeking to avoid a return to prison, Ponzi disappeared from Duval County in June 1926. With a nationwide manhunt for him underway, he made it to Tampa and under the alias of Andrea Luciana, he signed aboard as a waiter and dishwasher on the Italian freighter, "Sic Vos Non Vobis". Bound for Italy, the 45 year old, 5'-2" Ponzi had disguised himself by growing a mustache and shaving his head. In addition, as a part of his getaway plan, he faked his suicide by having Jacksonville friends place some of his clothing at the beach with a note apologizing to his wife and mother for taking his life.
Unfortunately, for Ponzi, he made the mistake of revealing his true identity to a shipmate and word spread that the infamous Charles Ponzi was onboard. Before the ship left U.S. territorial waters, he was arrested by authorities at a port call in New Orleans, LA. In hopes of not spending more time in American prisons, Ponzi pleaded to President Calvin Coolidge proposing his own deportation instead of prison time.
"May I ask your excellency for official or unofficial intervention in my behalf? The Ponzi case has assumed the proportions of a national scandal fostered by the state of Massachusetts with the forbearance of the federal government. But, for the best interests of all concerned, I am willing to submit to immediate deportation. Will your excellency give his consideration of the eventual wisdom of my compromise?
Ignored by Coolidge, he then appealed to Italian dictator Benito Mussolini, who also ignored him, and in February 1927, he was returned to Boston to begin his sentence in the Massachusetts State Prison. It was said that this was one of the few things Coolidge and Mussolini ever agreed on.
His Last Years
Charles and Rose Ponzi at 1934 deportation trial. Courtesy of the Leslie Jones Collection at the Boston Public Library.
Ponzi was released from prison in 1934 and immediately deported to Italy. Wanting to remain in America, Rose Maria divorced him in December 1936. When asked about the separation by a Post reporter she responded,
"When he was down, when he was in trouble, when he was in prison, I stuck to him. When he had millions, when he had a mansion, when he had cars, I stuck with him. And now I feel that I have proved my loyalty through thick and then, and I intend to secure a quiet divorce."
In 1939, Ponzi moved to Brazil, working for the Italian airline LATI. After losing that job for being involved in a smuggling ring, he ran a small Rio de Janeiro rooming house and was employed as an English teacher at a private school. Despite their divorce, Ponzi and Rose corresponded regularly. When urged by a Brazilian friend to marry a 45 year old woman to nurse him through his older years, he remarked:
"If 45 was my measure, I would rather take it in three installments of fifteen each."
In Brazil, his health suffered with a heart attack in 1941 and a paralyzing brain hemorrhage in 1948. At the age of 66, Charles Ponzi died on January 18, 1949 at the Hospital São Francisco de Assis of Federal University of Rio de Janeiro.
The 1300 block of Main Street today. Charles Ponzi resided on this block in 1926, while operating the Charpon Land Syndicate and on the run from Massachusetts authorities.
During his last interview to an American reporter, Ponzi remarked,
"Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over."
Article by Ennis Davis
Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership By David M. Currie, Ph.D.