Ponzi: The Boston Swindler

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Received an A- on this paper, United States History, DePaul University, put almost twenty hours into, most I write in four-five hours, very proud of this piece. Throughout history, the swindler has financially plagued society. Whether it is the get rich quick scheme or the carnival worker’s impossible challenge, people have been cheated out of uncountable sums of money. In the 1920’s a man named Victor Ludsig, posing as a French official, sold the Eiffel Tower to a gullible scrap ironworker for $50,000. Even today con artists are thriving using the Internet to borrow from Peter to pay Paul. This is a scheme made famous by a crook so successful that his name now graces the age-old fraud, the Ponzi scheme. Webster’s Dictionary defines Ponzi Scheme as Any investment program that offers impossibly high returns and pays these returns to early investors out of the capital contributed by later investors. Named for Carlo Ponzi who promoted such a scheme in the 1920s based on a theoretical arbitrage in international postal reply coupons. “Fifty percent profit in forty-five days!” was the claim of Charles Ponzi. Ponzi was a purported financial wizard. In the summer of 1920, he ran an “investment company” in Boston. He claimed to reap great profits by trading postal reply coupons. Nonetheless, the investment scheme was a fraud. Ponzi was using investors' money to pay off earlier investors, while keeping some for himself. In the end, he had collected $9,500,000 from 10,000 investors. Charles Ponzi was born in Italy in 1882. Born to a wealthy family, Ponzi put off work as long as possible and attended college at the University of Rome. Knowing he was avoiding the inevitable and seeing no appeal in the Italian business world, he immigrated to the United States. In 1903, upon entering the United States at the age of 21, Ponzi proceeded into Canada. In 1909, he was convicted of forgery in events surrounding the collapse of the Montreal banking firm of Zrossi & Co., of which he was a member. As punishment, he was sentenced to a three-year term in the St. Vincent De Paul Penitentiary in Montreal. Released from Canadian Prison after only twenty months for good behavior, Ponzi entered the United States again on July 30, 1910. Within ten days of his release, he violated immigration laws by illegally bringing five Italians over the border from Canada. For this offense, ... ... middle of paper ... ... body. In modern times, society is still burdened by individuals seeking to get rich quick. Names such as Marty Frankel and Robert Rooney, with their modern form of the Ponzi scheme, have appeared in the news. Although modern con-artists may enjoy the short success Ponzi did, none may ever possess the charm, the demeanor, or the ability to touch the hearts of individuals intended to be swindled. Cite: The American Heritage Dictionary of English Language. 1996. Houghton Mifflin Company 2 Blaylock, Bob and Seanette Blaylock., Pyramid Schemes, Ponzi Schemes, and Related Frauds. 1997 www.impulse.net/~thebob/pyramid.html N.Y. Times, Jul. 30, 1920, at 1, col. 7. 35 Stat. 1639 (1907-1909) Knutson, Mark C., The Remarkable Criminal Career of Charles K. Ponzi. 1996. www.usinternet.com/users/mcknutson Knutson, Mark C., The Remarkable Criminal Career of Charles K. Ponzi. 1996. www.usinternet.com/users/mcknutson Mr. Ponzi and His Scheme, Prod. 1999 The History Channel Mr. Ponzi and His Scheme, Prod. 1999 The History Channel Dunn, Donald H., Ponzi! The Boston Swindler, 1998 10, 11 Knutson, Mark C., The Remarkable Criminal Career of CharlesK.Ponzi.1996. www.usinternet.com/users/mcknutson

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