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Zaren Elizabeth Zaren, How are you look at me?
Over here?
Please to meet president and accounted for? How you doing?
I'm doing well? I do you know what's ridiculous? I do?
Cliff Young you know this is no. In nineteen eighty three, he was sixty one years old and he competed in what was called the Westfield Sydney to Melbourne Ultra Marathon. Okay, this was a distance of five hundred and forty four miles what eight hundred and seventy five kilometers for those who counted clicks?
What?
Yes, it was a race. Why I was called Westfield Sydney to Melbourne is because it was a race from the two largest westfield shopping centers, Westfield Parramatta in Sydney and Westfield Doncaster in Melbourne. So they went from one shopping mall to the other five hundred and forty four miles away.
Yeah.
That now, Young, as they said, sixty one years old, he competes in this, How does he compete? How does he show up? He shows up in overalls and work boots and he's like, I'm gonna run five hundred and four or four miles. No, there's more to that, Elizabeth. How he had practiced is he'd gone out and just run to chasing sheep in like gum boots for like two three days in a row, like didn't sleep, just stayed up chasing sheep all around the pasture and the Yes,
so that's how he prepared. No, So then he goes in and he and he races. He you know, he competes in the Westfield Sydney to Meldon Ultra Marathon. And when he goes the racers are presumed to like stop to sleep each night. Yeah, he doesn't. Actually, it's not true. He slept the first night, right, and so most of the racers gonna sleep for like six hours. He slept for like a couple hours, wakes up and just starts running again. And after that he realizes that there's nobody around.
He's got a good lead, right, and he just keeps doing that day after day. He just decides, you know what, I'm not gonna sleep for the next five hundred miles or whatever. And he finishes in first place, ten hours faster than the next runner. He wins the whole darn thing. Now, the race what it normally would took a much longer. He finished it about I think it was a couple of days, or like, let's see if I can figure
out how long it was. It was like a he finished it a day long day before every anybody else had ever finished it. Like he knocked a whole day's time off of the Ultra Marathon. Yun yes, right, two days, two days faster than any previous runner had ever run it.
Australians are built differently.
Yes, and he ran the whole time at about a nice comfortable cruising speed of four miles per hour. He did not put himself out in the least. He just ran night and day and night and day and night and day time got to the shopping mall.
He's amazing.
Hero Cliff young, sixty one year old bad what a badass?
I love that. That's ridiculous. I have one more little ridiculous thing before I kicked off to what's really ridiculous.
Oh really, we.
Got a message from Rude Jude Raquel, who, when asked where do you work, she said she works in Hell, which is also known as Walmart, Canada. Okay, but aside from that, she's absolutely hilarious. But here's the thing. Is there anything that you like to tell the rest of your fellow listeners. This is on the survey on our website, and she wrote, I would like to let you all know that since hearing about how it would be appreciated if brands would reach out to Ridiculous Crime if they
were coming up with any mashups. I've sent messages to most major brands at this point, but still continuing informing them of this and giving them the contacts for Ridiculous Crime. You're welcome, guys. It was my pleasure to do this for the rude dudes and of Corus, for Elizabeth, and most of all for Zarin. No need to thank me, so I just have to say that is the most incredible thing I've ever heard, Raquel.
I respect the game.
I want to like. If I get cool stuff, I'll send you some of it. We'll share. But also, Grek here will be an inspiration to all root dudes really start harassing brands so that we get I want to be able to try these things out and tell you about them, or tell you about them before they hit the market, so you're the first to know. Everybody.
I would love to se.
And you you need to just buck up and take it, take it like a man. No, No, it's amazing. So that's another ridiculous. Do you want to know what else is ridiculous?
I think I got space for.
Setting the stage for many crimers and con men to come. This is Ridiculous Crime, a podcast about absurd and outrageous capers, heist cons. It's always ninety nine percent murder free. Am one hundred precent pridiculous.
Damn right, I'm messed up.
Okay, I'm going to start by quoting you some poetry.
Oh I like poetry, Yes, so do I.
Some say we're dreamers, some say we're schemers. Some say we're fooled because we won't be their tools. I and I a winner, We're no beginner, won't be your sinner because we know jaw rules and we cares not what Babylon say or what they say. We are. They got to come, they got to come our way or they won't get far. I'm the originator, no imitator. I'm the originator. I'm the creator Babylon. So that's Jimmy Cliff laying it
all out in his song Originator. I mean it's no Peter Tosh singing I Am than I Am, which is my second favorite track of his behind Stepping Razor, and then followed by his cover of Johnny Be Good Danger. As you can probably tell, I was listening to my roots reggae playlist. Where was I and I? Okay? Originator right? I thought? As I thought about the guy that I'm going to tell you about today, I kept thinking of that word, which made me think of the song, which
made me put the music on. I want to talk to you today about the originata.
Okay, who would that be?
Today's bad guy is none other than Charles Ponzi.
Oh snap, the originator, the og.
Pyramid scheme, Godfather, Chucky Pond, Pond, Arthur Ponzarelli. These are the names I was coming up with for him. Okay, we need to temper all of this with some information. Ponzi didn't invent this type of scheme.
It was named after him.
Yeah. It showed up in Charles Dickens' novels. There's a theory that Ponzi found inspiration in the crime stylings of a guy named William Miller name that's a great nickname. He was a Brooklyn bookkeeper who pulled the scheme on investors back in eighteen ninety nine, and he took them for a million dollars back then. Yeah, and that's like forty million today, so you know, big time. But Ponzi. Ponzi made it his own and it carries his name to this day. Ponzi scheme. We all know what that means.
Pyramid scheme. You take people's money with promises of huge investment returns and then you pay him off with the money from a new crop of dupes. Lather, rinse, repeat. But Ponzi, he was amazing. He was a con man for the ages. So let's dive in.
Please.
He was born Carlo Ponzi in Parma, Italy, eighteen eighty two, and I hate that he anglicized his name to Charles Ponzi, but you know, you gotta do what you gotta do.
Investors, you gotta get it on your side. Carlo Ponzi sounds a little bit Carla Ponzi's.
It rolls off the tongue.
Yeah, it's a little more poetic. But I imagine in the early turn of the century it kind.
Of maybe not so popular. He wasn't from some peasant family living a hard scrabble existence, and like trying to get by in a somewhat recently unified Italy. Now he was from a well off family in Parma. He went to the University of Rome and here's what he had to say about that quote. In my college days, I was what you would call a spendthrift. That is, I had arrived at the precarious period in a young man's life when spending money seemed the most attractive thing on earth,
and college just wasn't for him. It was not a good fit. So he hopped on a ship and on November fifteenth, nineteen oh three, he arrived in Boston on the SS Vancouver. He only had a couple bucks on when he stepped off the boat. And it's not like other immigrant stories where people sold all that they had to buy a ticket to America and they arrived with like basically nothing and had to start from absolute scratch.
Can you imagine the desperation that drives people to do that, Like, it's got to be really bad where you're coming from to take that risk that's off.
To then weeks at sea, I mean like probably in like steerage level. Yeah, and it's not going to be.
Dope, yeah exactly. But so Ponzi, and then.
We get here, you ain't got anything. You don't know anybody, most like except for maybe some people. You got to like travel into a whole other city to find.
Yeah you got Yeah, you just got to find people that can help you survive, that know the language. So Ponzi like he didn't have anything when he got here, but it doesn't mean that he was broke when he got on the boat. Like he had cash, but he lost it to a card sharp on the ship, on the ship, on the ship, he told the New York Times, quote, I landed in this country with two dollars and fifty cents in cash, but one hundred million dollars in hopes.
Those hopes never left me. So yeah, he may have only had a couple bucks, but he didn't look like it. And his autobiography here's how he describes himself. Quote from Tie to Spats, I looked like a million dollars just out of the mint, like a young gentleman of leisure, perhaps like the scion of wealthy parents on a pleasure tour. And that goes to show that appearances don't mean a thing.
In fact, I was in a jam right there and there in an economic jam and a critical predicament at that, and five thousand miles away from home, and five hundred or more miles away from my ultimate destination in a strange country with no friends and no money.
So uphill battle.
Yeah, and he said that like he looked so sharp. He went on quote. To have landed in America without money was not half as bad as having landed without the least knowledge of its language. I could not fill an office job because I did not speak or understand a word of English. What I knew of other languages did not help. Likewise, my general education was useless. As a student and a man of frail physique, I was
not cut out for manual labor. Still, I had to live, and in order to earn a living, I had to work at something. So you know, I mean that's again, like when you think about I thought about that. Visiting countries where I don't know the language at all, How did you get bught? Yeah, like Slovakia, where they speak Slovakia.
It doesn't make I have no point of reference. So if I got there, I'd have to like sniff around and try and find other Americans or maybe Brits, someone who spoke English and then try and like get in with that community and hope they can hook me up with something some way to survive. So anyway, so he had to live. But he also had this lust for adventure and he had a sense of cunning that couldn't be tamed. So he immediately went from Boston to New
York City and he bussed tables there. He went up and down the East Coast, and he just took whatever work he could get. Then he went to Florida and became a sign painter. To Florida, Florida pub will not see that coming sign painter. Yeah, I'm just wondering, like did they give him like this is what it's supposed to say? He doesn't know what it says. He's just like, oh, put these letters in this order.
Yeah, I think if you mean the letters translate.
Right of course, But like you know, I get, I don't know.
As long as they don't have any you know, tabographical or spelling errors.
He's painting, he has no clue. So he the whole time all he wants is to be rich, filthy rich, and he would try anything he could. In the meantime, he was a grocery clerk. He said he was a road drummer, which I think. I don't think it means that he was like stepping in on tour with iron maidens. I think it was like tamping down soil and prep for tarmac to be applied. Oh, all the road drums are those things like where the big bear rolls at off ramps so that you hit him you don't die, Okay,
But anyway, so he did that. He did sewing machine repair. H was an insurance salesman, worked in a factory kitchens, you know, And he said, quote, in some of the jobs, I lasted no time. In others I lasted longer. Often i'd be fired oftener I would quit if my own accord, either disgusted or to avoid being fired. So he went all over the place he did, like Pittsburgh, New York, Patterson, New Haven, Providence, and then he gets to Montreal, Canada. Monreal.
At this point, I mean, do we know anything about his language skills or is he spent tiving to stick around Italian community.
I feel like he's sticking around Italian communities but picking up English as he goes. He's super savvy in that sense. So he gets to Canada, he gets a job at a bank that had been formed to serve the Italian immigrant community there in Montreal, bank Zarassi, named after mister Zarassi. It sounds like a good venture, right, you know? It was not. They charged these again absolutely outrageous interest rates,
and they made bad loans and they went bankrupt. And so Ponzi he's got no job now, no money, mister Zarassi. He took off to Mexico, ditched his wife and kids, and then off he goes. But like no worries, Ponzi had a plan. He started forging checks, I'll be and then he got blah busted. So he served a little time for that, and of course he was like, you know, I was set up and so they forced me to take the fall for this, and everyone's like okay, buddy.
But he gets out of prison for that, goes back to the States because it was easier to get work there. So he hopped on a train and when on the train, he ran into some fellow Italians and none of them, not Ponzi or his compatriots, had travel papers. And so at this point, like Ponzi, like I said, he'd picked
up some English. So he decides he's going to serve as the interpreter for them, and so they get to the border crossing Ponzi he steps up to talk to the officers and then once again he gets busted, this time with charges that he was smuggling those five Italians from Canada into the States. So he served two years for thateen ten to nineteen twelve in a federal prison in Atlanta.
So he was basically a Canadian coyote.
Yes. So when he got out, he went to Alabama and because apparently there were some Italians there, they were working in like mines outside of town. I don't know what the mines in Alabama are, mayonnaise.
I don't know. I don't know.
So he got a job in town as like a bookkeeper and an interpreter, and he demonstrated his bravery, according to Michael Zukoff, author of Ponzi's Scheme, just like Sophie's Choice.
But not.
One day, there was a terrible accident at the hospital. A nurse was badly burned when a gas stove burst. Oo Ponzi was having a drink with the doctor who told him the nurse wasn't doing well, that gangreen was setting in and she needed a skin graft. The problem was that doctor couldn't find anyone who wanted to give forty to fifty square inches of skin to a stranger. Ponzi volunteered. Really huh, Later goes quote, Ponzi was on an operating table that evening doctors cut off seventy two
square inches of skin from his thighs. Later he gave another fifty inches from his back.
Dude, that's like for the seventy two inches, I'd be like three five by five squares.
Girl, I got lightheaded, just rea the notion of But yeah, so he was a brave thing to do. After that, he worked as a librarian. But he's all bandaged up. I suppose at the medical college in Mobile, Alabama, do we.
Have any understanding of why he decided to give his skin to this unknown nurse? Why not? Why not?
What does he care?
I'm not not sliding criticizing.
I have no idea. Character, I have no idea. But I think he went to the medical college and Mobile to get free healthcare. So then he moves on, he wrote, quote from Mobile, I went to New Orleans just in time to witness the terrible hurricane of September nineteen fifteen. Witness is no word. I was right in the midst of it. Everything was flying, but the birds, store signs, shingles, tiles, tree limbs, galvanized iron roofs in Esplanade Avenue. The trees
were bending like blades of grass. I never saw the like of it before or since. It remains the worst storm in the history of the city until Huey Long struck New Orleans. It was a little saucy. So he later moved to Wichita Falls, Texas to work as a quote foreign salesman for a motor truck company Italian. I guess nineteen seventeen, he's back in Boston, so he's done his little whirlwind tour. He comes back to Boston. There he worked as what he called, quote a foreign correspondent
for an export company Fishy. And it was in Boston that he met this woman Rose, and he would go on to make her his wife. February nineteen eighteen. Her dad owned a grocery store he plans. He got a job as a clerk there, working on the books. He was not good at it, and he made a mess of everything. I'm sure his father in law loved that.
I loved it.
Yeah, here's this guy with like no skin on his leg or back, messing up the book. Married to your daughter, dear daughter, run business exactly. He's been, he's done, time, he's done. He's for human trafficking. Okay, so he's on the outs. He had to think of new money making endeavors, like one where he could be his own boss. So he came up with an idea to start an international trade journal, and the revenue would come from all the
ads that he was going to sell. So he took his idea to handover trust company, hoping that they'd give him a loan a two thousand dollars to help make his dream of reality big. Nope, they did not believe in his dreams, Eric dream Kellers. So Bonzi went back to his little office and he was determined to come up with the winning plan, the move that would make him a swell a fat cat. And then one day, August nineteen nineteen, the move presented itself. While he was
opening his mail. Let's stop for some ads and just like Carlo now Charles Ponzi as he would have loved because ads. Right when we come back, I'll tell you about his audacious plan.
He's Aaron, how are you doing pretty well? It's some great as really great ass. Yeah you like Elizabeth?
Yeah, now watch this drive?
All right?
So August nineteen nineteen.
I remember it.
Well, that's wasn't it a great? It was? It was so good.
I was I was looking forward to the upcoming World Series. I was rooting hard from my Chicago White Sox. I'm like, this team looks like a winner. I was in prison, you weren't, Angola, right, Yeah.
Yeah, it's terrible. I don't want to talk about it.
Still, the ankle from the chain gangs.
Terrible, but it is great. I learned a lot. I learned a lot about the world, and I learned a lot about me.
Well said, well said Charles Ponzi.
Carlo Chucky Ponds. Yeah, Carlo, he remember he's sitting at his desk. Yeah, he opens the mail in his little business office, and he's desperate to cook up a healthy revenue stream. Remember he tried to launch a trade journal, even put out like early messaging about it, like he didn't get the loan, but he, you know, started trying to work on it. But someone in Spain didn't know that the whole thing had fallen flat and that he'd
kind of given up. The letter that he opened was from a businessman in Spain who wanted to know more about his.
Journal International Trade.
Yeah, like news of the demise hadn't made it over there yet, and the guy was really polite, so he this. This Spaniard sent the equivalent of a self address stamped envelope with his request. H only this was an international postal reply coupon. So here's how PONSI tells it.
Quote.
Sorting my correspondence, I noticed a letter from Spain. It had an international reply coupon pinned to the corner. The letter merely asked for a copy of the Trader's Guide, which was his journal that didn't take off, and the coupon had been enclosed in prepayment of postage. I'd seen and used coupons before I knew what they were. It had been issued by a Spanish post office, but corresponded in every detail with the coupons issued by other countries.
At the top, the value appeared in Spanish and read thirty centavos. The main legend appears on the face and the reverse of the coupon in several languages. It said this coupon may be exchanged at any post office of any country in the Universal Postal Union for a postal stage of the value of twenty five centimes or its equivalent, So in essence, it's prepaid postage or a voucher for it in whichever the country the.
Person very very cheap travelers check that you can cash at any post office.
Well, so inspiration struck Carlos Ponzi. This is it's arbitrage, right, You're using price differences and conversions to make a profit. Okay, because it's nineteen nineteen, so World War One is over. People have made it through the flu. It was tough in the US, but it was nothing compared to the devastation in Europe. The economy is there tanking, and so that meant that a lot of the currencies over there were seriously devalued. So these coupons, though they didn't hewe
to the exchange rates and adjust for inflation. So buying them in Europe was for someone in the US getting them at a steep discount. So that thirty Centavos stamp was worth five cents in the USA, and that was a set rate fixed by an international treaty. So basically you're looking at a ten percent profit if you buy
in Spain and redeem in the US. Makes sense, Yeah, thirty five cents at a time, according you could buy for five cents exactly according to Smithsonian magazine, which we love quote, purchasing coupons in countries with weaker economies could increase that margin substantially. He reasoned, it should be possible, then to make a financial killing by buying huge quantities of these coupons in certain overseas countries and redeeming them in countries with stronger currencies.
So he was pulling like a George Soros versus the Bank of London currency swamps.
So totally totally and it's like it's shady, but it's.
Not illegal, yea of England.
But sow now for the details. How do you get the coupons in bulk?
How, Elizabeth, how do you get the coupons in bulk?
That's a good question. How do you redeem them here for cash?
And how do you red see them for cash here?
Zaron, you're thinking of all the good questions. How do you ship what could be a very heavy load of these things from Europe to the US without eating up all the profits?
And these could be a very heavy load. How do I ship them from Europe to here without eating up all my profits?
That's a really good question.
These are concerns I don't know.
I don't think of these. You're a really good investor.
I have a business mind, you know what.
Thought Charles Ponzi. Yeah, we'll figure all that out later.
Yeah, details he needed.
He's like, I'm big picture. I'm going to get that big picture rolling.
So I want to talk about profits.
Step one, create a company, and thus Charles Ponzi's endeavor, Securities Exchange Company.
Was born. Security Exchange Company.
Run it a little bit close to the bone there, Zarin, Yeah, close your eyes. Oh yeah, I want you to picture it. You own a pizzeria in Boston's North End, and today business is a little slow. That's unusual. Your place is generally pretty crowded, but today is the day after the last day of the four day Fisherman's Feast of the Madonna Delsa Corso our Lady of help. People are tired and they've used up their spending money. So you're just in your shop ready to mix up some dough for tomorrow.
You always let it sit overnight. That's your secret. Outside in the streets, some kids are playing stickball. It's a lazy summer afternoon. There are laughter and shouts. Bring you great joy. It's life affirming, creating food for people while children frolic outside. You're healthy and strong and thankful for it. You've lived through a lot. You came to this country with nothing. You grew this business with hard work and determination. You lost a sun to the blood soaked, muddy trenches
of World War One. You were honored recently by the Neighborhood Society for all you do for the less fortunate among you. You've known dark times, but you have faith. It's love and generosity and empathy and integrity that gets us through. Those are the things that went out in the end, you think, even when it doesn't feel like it. The door to your shop creaks open. You turn and see a man in the doorway. He's a clean cut guy and a light suit and a straw boater hat
on his head. He wears a flour in his lapel. He gives you a sly conspiratorial grin as he walks in signora. He says you nod. He approaches your counter and you see he's carrying a notebook in some papers. You can't stand these traveling salesmen. Yes, you say. He tells you that he has an investment opportunity for you, something that will generate huge profits. You roll your eyes and then purse your lips. Kavoy. You make the pinched finger hand jester to go with your comment. No, no,
the man says, hear me out, he begs. He introduces himself, Charles Ponzi. He tells you that he has a business that buys and sells stamp coupons from Europe. That each converted stamp makes a profit, a big one. He does this at volume, which allows for and necessitates investors, but he also brings in the big bux. He wants to give you an opportunity to get in on it, because you're such a pillar of the community. He's coming to
you first. You stare at him. You ask him how exactly is he going to sell these stamp coupon things for cash? Ponzi says he can't tell you that part. That's the proprietory sauce, he says. You quickly and loosely put the back of your cupped hand under your chin, and then sharply flick it out and forward the sign for f out of here, ah, Signora, Ponsi says, wait until you hear the numbers. He tells you fifty percent interest in ninety days. Ponsi smiles at you. That's a
spice of meat the ball, he says. What you respond? Nothing, He says, just a line I'm trying out. He hands you a slip of paper with investment categories on it. You scan the list and you sigh. You could go in at the lowest level you can afford that and a fifty percent return. Mom Mama, you tell him to count you in, and then you reach under your apron and into your pocket for some cash. Ponzi opens his notebook and enters you into his ledger. You won't regret this, Signora,
he says. The kids outside are erupped into cheers, their ball soaring to the air and the stick back clattering on the pavement. You certainly hope this Ponzi fellow is right. So Zarin and and apologies to the beautiful Italian American community.
Oh yes, you apologize.
I do those things with love.
Oh you talking about what the accent? Okay, I didn't know which part was the offensive part.
I do it with love. I don't know any better. I'm not you know whatever.
You gotta be like me. Filled with so many ethnicities you can't be accused of insulting anyone. But I'm like, I cover like four continents. Bro, So who you coming at?
Admiration because I'm mad that I'm not Italian American?
Typical French answer.
I got.
French so I can do these things.
So, Sarah, by nineteen twenty, thousands of people had put money into Ponzi's you know scheme, So they wanted that fast, easy money, and those who got in on the ground floor like you did, actually got paid out.
Look at us.
Yeah, but not because the stamps were turning a profit because like what stamps? You were paid out with the cash from the next round of dupes. Ah. So the first round of investors.
He wasn't trading any stamps in. He's like, why busy up myself with all that? I just wanted to cast tail in hand.
That's the proprietary sauce right there. That was his exact word.
Really, yeah, sauce because no.
So okay, So the first round of investors they're loving it, like this is fantastic.
Because now they have the second round money.
Yeah, and so they start spreading their message of six success at the hands of the financial wizard of School Street, and eventually around forty thousand people got in on it. What forty thousand, that's a lot of zero, that's a lot of zeros. They came from all walks of life. So there were a lot of working class Italian.
Immigrants I figured primarily.
Yeah, there were politicians, oh, priests whoa yeah.
Like taking like the donations and giving them or like their own little how do they have money?
Walking around money? And then according to NPR, two thirds of the Boston Police Department were investors.
Dark laughter.
Even his own wife kicked in. Wife, she and eight of her relatives were in deep for more than sixteen thousand dollars. That's like two hundred and sixty six thousand dollars today.
He did not like that family, like her dad heard friends.
So a lot of these people quote reinvested when they're payout time came because they wanted to just keep it growing. And that was a relief for Ponzi because then he didn't have to hand over any cash yeah back, yeah, So he went around telling people that he had this crazy network of employees, agents all over Europe, buying up the stamp coupons, shipping him over to his offices in Boston and Maine and New Jersey, and then once they were here, Ponzi would work his magic, you know, cash
him in, get the big bucks. And this is I'm sure you know, not true. I do know. There were no agents, no postal coupons. I mean there were some. The truth is that he had like sixty one dollars worth of him in his life. He was yeah, exactly. In less than a year, Ponzi had raised fifteen million dollars. Damn, it's like two hundred and fifty million dollars today, in like eight months.
Eight months.
He took the money in Wow, and he made sure to spend it so like he bought himself a twelve room mansion. He had a team of servants, a wardrobe of expensive bespoke suits. He walked around with a gold handled cane. Okay, his wife dripping in diamonds that like she paid for it exactly. And the cars he had multiple cars, including a locomobile.
Really, yeah you know what that is.
I wasn't sure.
I can't make a look. I just love the name locomobile. It was crazy car.
It was famous for how finely tuned and expertly engineered it was. It was like a pure luxury and horse power.
It was like the luxury Subaru back then.
You're a funny guy. It was well engineered car, well engineered at the time. It was the most expensive car in the country.
Oh wow, more than like a Dusenburger and the other ponds.
He paid thirteen thousand, six hundred dollars cash for his And that's like paying today two hundred and twenty five thousand dollars for here.
Okay, that's an expense.
It's like, you know whatever, one of those super yeah.
Oh, a superclm like that. He's also like touring.
Yeah, it was more of a touring. So let's save Bentley or Aybach or one of those. He went into real estate investment. He picked up rental and commercial property in Boston. Smart he bought stock in banks. In fact, according to Smithsonian Magazine quote, he arranged a takeover of Hanover Trust, the same bank that had turned down his loan application a previous year. It's like boom year later, he's all big mistake, big huge, So he's pulling in
millions of dollars a month from his investors. He's drunk on it all. It was the manifestation of the dream that he had when he first a lit from the Atlantic and stepped on the shores of you know, the storied streets of Boston. Yes, and with that money came attention, and attention is not the best for a con man. Let's take a break, and upon our return, I'm going to tell you about how spoiler alert, it all falls apart.
Zaren Elizabeth, Oh, Zaren. We got Charles Ponzi, Carlos big dog in it around rolling in dough, living the high life. But that much money so quickly draws attention.
Yes, one does wonder how how?
And before you know it, regulators are coming looking around and things didn't make sense. Basic question one. Let's see the stamps.
We contacted the Europeans. They're not selling any extra stamps.
Someone from the state came to him and this guy was in charge of busting loan sharks. Oh like, excessive interest in all that, the Ponzi's interest scheme worked the other way, and so he had to explain to the dude, no, I'm the one paying out I'm not a loan shark. And the guy's like, oh yeah, yeah, yeah, I got it. Okay, So sorry to bother you.
And so.
He's like, oh, but could I get in on that? This is all about stamps? So what did the Post.
Office have to say about my curiosity?
Right? According to Smithsonian, the Post Office quote insisted it was impossible for anyone to do what Ponzi claimed to be doing. Postal authorities today say the same thing, although International Postal replied coupons are available at post offices where there is demand for them, regulations make speculation in them impossible.
It seems like that it's not impossible, more like improbably you know what I mean. Seems like if you did it on the you did it on the sly, if there's any discrepancy between what they're worth over hear and what they're worth over there right right now, you buy enough of them all of a sudden you're like, yeah, that's how you make.
Well, you'll see this. Yeah. So they begin an investigation, but it doesn't go anywhere.
It seems like they should be able to track it really easily at both ends, like are you buying extra stamps? Are you selling extra stamp.
Their investigation didn't go anywhere because there were no stamp coupons.
Yeah, there we go.
The post office they were more interested in, like, how are you cashing these supposed stamps, not whether or not they existed and they should be getting them right. But even so they're saying, like, you're supposed to be just getting a US stamp. You're not supposed to be getting cash.
Oh I thought you could trade them in for cash.
No, you just like, Oh, I've got this thing, now I can put a US stamp on it.
Oh that was my mistake.
How do you get the car? Are you then selling the stamps? But how does that work?
Yeah? Then that it would be impossible.
The post Office couldn't figure out how does this work?
As you have somebody wants to buy a lot of stamps from But you know that.
Was it wasn't a problem because Ponzi didn't know how it worked either.
Yeah, he's like, what's That's why he didn't go through with the.
Whole big skin. Then Ponzi got sued, and then not by an investor, by someone who actually loaned him money in the beginning and now wanted a piece of the company. So Ponzi. He's like, look, I paid that loan back a long time ago. Get off my back. You cannot have any part of this. As litigation moved forward, the court decided to go ahead and freeze his assets. Oh no, well they got everything sortied because they're like, this is really confusing.
That's bad for a scheme named after Charles Ponzi.
So, according to NPR quote, and this causes a mini panic. Thousands of ter showed up at Ponzi's office. It's like a scene out of a bank run. They're all demanding their money back.
At least he has a legitimate reason. He's like, they froze my assets.
That's how he could do it. Is it's very wobbly. So now though we're July nineteen twenty, the Boston Post newspaper wants in on this because they see all this these investigations and people are upset, so they start their own investigation. They want the scoop, and they brought in this financial journalist named Clarence Barron no relation to John Baron,
Thank you. Baron ran the numbers and assuming one could make a little money by cashing in these coupons, the volume necessary to create the kind of wealth Ponzi was enjoying was just too much.
She'd be like a billion stamp.
Yeah, barn calculated that Ponzi would have had to sell one hundred and sixty million coupons in order to have what he had. But here's the thing. In the whole wide world, there were only twenty seven thousand coupons.
That's my question. This is something that's well documented, like these stamp sales.
As the as the kids say, the math ain't mathew. So Baron he also caught something else. He noticed that Ponsi wasn't invested in his own scheme, Like his investments were all in stocks and bonds and the state. Yeah, regular stuff, and he's getting maybe a five percent return. But if he's running fifty percent return on investment on the stamps, and why isn't he loading his money into it?
Good point.
So then Baron he's like, hey, post office, quick question, tell me more about these stamps and how often they're used. And the post office is like, you know, they don't get used very often at all. These are not common.
Yeah, we don't.
We need never see them. And so he's like perfect, and then send the story hits the front page, July twenty six, nineteen twenty and it was the first in a series of pieces.
Oh my god.
Right, uh and this this would have been curtains for any other con but not Chuck Ponzi.
No.
See, Ponzi was a true con man, a confidence man. He was magnetic, he was charismatic. He was a character like no other, and he had an effect on people. So as a result, his supporters and investors just didn't believe the stories in the paper. Fake news.
I've heard about how this plays out.
They could explain everything away, however preposterous. Was the guy's making him money? He must be legit. He's a good businessman. Maybe they hadn't seen the money yet, but others were raking it in.
Maybe they're just jealous.
My time is going to come. I'm going to be a thousand ear pretty soon. I'll be a fat cat, a fat kit, according to a piece on Ponzi by CNN Quote. In fact, the morning that the Post ran Baron's report, investors lined up around the block outside his office in an attempt to give him more money. It was advertising, even after they'd been told they'd been scammed. Ponsi later boasted that he'd taken in a million dollars in new investments the day the.
Report ran, just keep someone there to accept the money and get on a boat and go and go.
Ponzi hated the press. They drove him into a rage, like you're a terrible person and a terrible reporter, the most obnoxious reporter in the whole place. You're a stupid person, one of the worst reporters. A horror show. Get yourself a new job. I doubled the size of it, you dumb person. Quiet piggy. That that sort of thing.
Those are the kind of things I can barely imagine this. Really someone talked to the press like that.
Could you imagine?
That's wild?
Would you imagine that? Ponsi's publicity guy was a former journalist named William McMasters, and he had an idea.
Big Bill McMaster, Billy Mix.
Ponzie, according to McMasters, could just tell the US Attorney's office that they can take a look at his books and they could bring in an auditor and everything, and that he McMasters is like, look, tell them that you'll halt investments on July twenty sixth, and that you won't take anything in until the Audit's done, and for some reason Ponzie went for it. He's like, you know, I think you're right. It's a really good August second, the
Post blew everything up. They ran a copyrighted first person account that stated Ponzi was quote hopelessly insolvent. The person who gave the account.
William McMaster, the inside man, he wrote.
He wrote, quote, he is over two million dollars in debt even if he tried to meet his notes without paying any interest. If the interest is included in his outstanding notes, then he is at least four million, five hundred thousand in debt. So now people are starting to believe the news reports. They start running up on Ponzi's office on School Street. Ponsi stuck with the fake news line of reasoning, and then he took it to the next logical level. How soon, Yep, I'm gonna sue everybody.
I'm suing the paper. I'm suing McMasters to me, sue you exactly, According to the Boston.
I just suit it.
Boom everyone sooned, according to the Boston Globe quote. On August tenth, Ponzi gave a luncheon address at Boston's Hotel Bellevue for the Kiwanis Club, which had invited him for a quote battle Royale with a mind reader named Joseph Dunnagher. What the idea is that Dunnagher would quote throw the x ray of clairvoyance on the subtle brain of the little Italian and reveal what he found to the audience bitches, Which is weird.
This is so weird. The scientific races spiritual. It's like we've merged everything.
And it's kind of weird to have a mentalist at like a dining event where everything is crumbling around him. Who does that? Well, okay, so here's the thing the crowd only wanted to hear from Ponzi. Of course, the mind reader never got to do his thing.
Really, sitting drinking water.
Ponzi took audience questions for hours. According to Smithsonian quote, Ponzi audaciously implied that he dealt directly with foreign governments in order to purchase the vast quantities of coupons needed to support his enterprise. Because the governments from whom he bought coupons profited themselves, they naturally would not care to reveal the exact nature of their business, explained, we're all getting.
Yeah.
So then on August eleventh, the Boston Post let loose more of the dirt that they dug up. They let it be known that Ponzi had served two terms in prison between nineteen oh eight nineteen twelve.
He was running Italians out of Canada.
Five head of Italians out of Canada. This was another blow to the public image, and this is when people started to turn on him. The audit wrapped up on August twelfth, nineteen twenty, and he was now officially announced as seven million dollars in the red. Yeah. Regulators charged into his office, searched the place. You will not be surprised to hear that they didn't have stamp coupons in there.
No, not even the sixty one dollars worth I think he spent that.
Charles Ponzi was arrested August twelfth, nineteen twenty, charged with eighty six counts of mail fraud. Oh we say this a lot. You mess with interstate or the mail, you're gonna get burned.
Oh yeah, federal. In twenty years in charge, sometimes it gets ridiculous.
Ponzie used the mail to let his investors know how their investments were doing. So boom mail fraud. Six banks crashed because of his false race banks, including the one that.
He took over Boston, please like exactly.
Investors got back thirty cents on the dollar. Ooh yeah. There were some delusional ones who didn't turn their notes into the government. They thought that Ponzie was somehow going to pay them out, that he'd pull through this and come out on top. Ponzi did not come out on top, unless you count getting your name on everything same recognition.
He did it for exposure exactly.
He was found guilty, sentenced to five years in federal prison years five years, that's it. He served about three and a half before being released. But then he was facing additional state charges in Massachusetts.
I was wondering.
Yeah. So while he was out on bail trying to appe heal the Massachusetts stuff, he went down to Florida and pulled some scams. He started calling himself Sharpond and he was selling swamp lands.
Oh that at the time in Florida. That was the move.
As Smithsonian tells it. Quote, he was quickly arrested and convicted of fraud. He jumped bail when he learned that the Supreme Judicial Court of Massachusetts had upheld his conviction in that state.
See, I'm telling you, as soon as they people started sniffing around before he got bad, Bill McMasters, he should have gone to Canada and then cut loose, go west of the Yukon, go over to Asia on a slow boat to China exactly.
So, now that he had both Florida and Massachusetts after him, he ran to Texas and he got a job there working on an Italian freighter, hoping to make it to the Monderlands. Okay, but the ship stopped in New Orleans and he got picked up by the long arm a law. Yeah, they took him to Massachusetts. He's started his prison sentence there. He got out in nineteen thirty four and was immediately
deported to Italy. They're out of here. And it turns out, I mean, he had never bothered with American citizenship.
He never got the papers.
Yeah, why do all the paperwork? That's stupid.
And they know who he was who?
Yeah, I want to let's not forget about Rose.
Oh right, what happened with that? And her father, who must be believed in him.
He told her that he was going to get work in Italy and then she could go and join Yeah, she would send for her.
You got to see beautiful Parma.
Yeah. She waited two years to hear from him and then just gave up. She got a divorce. And so what was Ponsi doing while Rose waited?
What was he doing while Rose waited? Elizabeth?
I can tell you that I can satisfy that curiosity you have. There are two accounts. One is that he got a job in finance, which is rich even better as where Mussolini's government finance ministry, Yeah loved him, oh oh god.
Yeah.
But then that account says that they found out he wasn't so good at finance, and so he made a run for it and got on a steamship headed to Brazil. Donald Dunn, author of Ponzi. That's an exclamation plant.
So not Donald Duck Dunn from the Steve the Colonel croppers Man.
No, No, no, just records right, No, just Donald Dunn. He wrote Ponzi, The Boston Swindler. He said that Ponzi got help from a cousin of his in the Italian Air Force who was a friend of Mussolini's.
That sounds more legit.
Yeah, And apparently Ponzi was able to parlay that into a job with an airline that had recently started up running flights between Italy and Brazil, and he did that from nineteen thirty nine until December nineteen forty one, which, as you know, is when the US entered World War two. Yeah, so the Brazilian government cut off the airline because they found out the airline was moving strategic supplies from Brazil to Italy.
Yeah, well, we can't have that.
Pick aside. So Ponzi was stuck in Brazil.
Oh, he'd flown over there and he's like damn it.
But he settled in. He was into it, and over the years, like he got a job teaching English and French, and then he worked as an interpreter for an Italian importing firm. He died in a charity hospital in Rio de Janeiro on January eighteenth, nineteen forty nine. Wow, he died penniless, seventy five dollars to his name, and that was to pay for his burial. Huh, nothing else, Zaren, what's your ridiculous takeaway?
I can't believe that's the end of the line for him, Like, penniless in Brazil. I did not see that coming at all. I do love how people refused to believe that he had conned them, even when they were presented with the evidence. Then how about more evidence, Okay, how about this evidence. They're like, nope, nope, and nope.
It's the cult, the cult of Ponzi.
I mean, I'm as somebody who's been a fan of con men and con artists since I was a wee lad. I still marvel at the suckers who believed them. I understand the con artist, I don't understand their victims. I know, which is I don't know what to say about that. Yeah, what's your ridiculous take with Elizabeth?
I wonder what became of or if he ever knew the poor Spanish guy who kicked it all off with by sending the stamp and being like, oh yeah, tell me more about your magazine, And he's like, whatever do you think?
Like I ever saw the newspaper recognize the name? I don't know, but I've just the publisher of my trade magazine.
I mean, I think that Ponzi would have figured something out one way or another. But it's interesting, Like, I wonder whatever became of him. Yeah, Dave, I'd like a talkback now.
I think, Oh, that sounds delicious. Here you go.
Oh my god, I would hi Elizabeth and Aaron and all the gang at ridiculous crimes. This is really for Elizabeth. Sorry Saron, but I just want to let you know that my sister and I also love nine one one. We also watched Lone Star, and we also could not get through the first episode of Nashville. It was just really bad. So I completely agree with you. Thanks so much. You have a great day. Bye. Thank you. See like you, you're like me. We have tastes. We appreciate the original
Mississippe and the camp of Lone Star. But yeah, o god, the Nashville one's.
Terrible, uninspired. I'd say yeah, I just say terrible, yeah, because Lone Star isn't particularly good, but it's good at not being particularly good exactly it commits to its bite, couldn't even commit to the bit that it said it was. It's like, look, this is what we're gonna do, and I'm like, you're not doing that.
And I gotta say nine one one is getting really bad flu as you like to say, cured by Diane exercise and love of good friends. But thank you, thank you for backing me up on that. I appreciate it. That's it for today. You can find us online at ridiculous Crime dot com. We're also at Ridiculous Crime at Blue Sky on Instagram. We're on YouTube at Ridiculous Crime Pod. You can email Ridiculous Crime at gmail dot com and please please please leave a talkback on the iHeart app
reach out. Ridiculous Crime is hosted by Elizabeth Dutton and Zarah Burnett, produced and edited by Dave Cousten, creator of the Cousten Scheme, where you come up with exactly the right music and sound effects for any occasion. Our ridiculous assistant is confused Spanish postal worker Terry Maldonado. Fong research is by ever Trusting investor Marissa Brown and Guy who is desperate to run into Ponzi in a dark alley,
Jabari Davis. The theme song is by Italian Freighters Skipper Thomas Lee and Italian Airline Stewart Travis Dutton post wardrobe is provided by Botany five hundred. Producer Dave Cousten's wardrobe is by mister Guy of Beverly Hills. Guest hair and makeup by Sparkleshot and mister Andre. Executive producers are recalcitrant publicist Ben Bollen and dogged financial reporter No Brown.
Gig Clime say it one more time Crime.
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