Charles Ponzi: The Immigrant Who Invented the Scheme That Bears His Name

August 1920, Boston. A blistering summer morning on School Street, and a crowd of thousands will not go home. Clerks and widows, policemen and priests, pressed shoulder to shoulder outside one small office, waving paper receipts and demanding their money. And the man they came for steps out to meet them in a straw boater, sends out for coffee and donuts, and hands them around to the very people trying to ruin him. The panic melts into applause. There is only one problem. He has no money. Episode 1 of The Great Frauds. This is the whole story of Charles Ponzi: the young man from Lugo who landed in America with two dollars and fifty cents and a head full of angles; the Montreal bank that quietly paid its old depositors with the deposits of the new; the forged cheque and the years in prison; and the little international reply coupon from Spain that showed him a crack running through the entire world. Buy a coupon for pennies in war-wrecked Europe, redeem it for far more in American stamps, and the profit looked enormous. It even had a respectable name: arbitrage. In this episode: the Securities Exchange Company; fifty percent in forty-five days, then fifty percent in six weeks; the North End neighbours who saw ordinary people paid back in cash and poured in their savings; the summer he was taking in as much as a million dollars a day; the mansion, the heated pool, the controlling share of the very bank that once refused him a loan; and the one small, fatal fact underneath it all - he was never buying the coupons. He was paying the early investors with the money of the later ones. Rob Peter to pay Paul. The simplest fraud in the world, and the most seductive. And then the reckoning: the skeptical financial writer Clarence Barron, who did the brutal sum; the District Attorney; the run of the twenty-sixth of July; the Boston Post digging back through his past; the auditor's verdict; the surrender to federal agents; and the long fall through prison, deportation, a Rio slum and a charity ward. He died with seventy-five dollars to his name - and a scheme that has never once gone out of business, from School Street to Bernie Madoff. Full episode: https://empire-ops.com/maja - Next time on The Great Frauds: the South Sea Bubble, England's 1720 mania, when an entire nation was talked into getting rich beyond its wildest dreams. Follow the channel so you do not miss it. More from the channel: https://empire-ops.com/maja Sources: Encyclopaedia Britannica, the Federal Reserve Bank of Boston, the Massachusetts Secretary of State archives and the Boston Post reporting of 1920 on the scheme and its collapse; contemporary court and deportation records on the prison years and the death in Rio in January 1949. Disputed figures - the total defrauded (roughly ten to twenty million dollars from about twenty thousand people) and the peak daily intake - are given as ranges in the narration and flagged where sources disagree. This is a documentary about the history of financial fraud - not investment advice, and there is nothing here to buy. #CharlesPonzi #PonziScheme #FinancialFraud #History #TrueCrime