Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1920-08-19
P0NzYS CAREER
HALTS IN ARREST
Is Held for Fraudulent Use of
Mails-Further Charge of
Larceny also Awaits Him.
Owes Huge Sum IA

Boston, Aug. 1c.-Another get-rich-
quick bubble burst today. Federal au-
thorities who have been auditing the
books of Charles Ponzi and the secur-
tiles Exchange company reported that
the liabilities OF the young financier
were upward OF 100000. Ponzi had
claimed that they would not exceed
100000
Ponzi Is a prisoner in the office or
the United States marshal. having
been unable early this afternoon to
furnish bonds OF $4,000. He was ar
rested. charged with using the mails
to defraud, after he had surrendered
soon after one o'clock. subsequently
a warrant for his arrest for larceny in
three counts was issued In municipal
court on application of the State at
torney generals office. The state au-
thorites expected to obtain custody OF
Ponzi II he obtained bonds releasing
him from the federal officers. Bank
Commissioner Allen to-day declared
that the capital of the Hanover Trust
company Ponzi depositary which was
closed yesterday, probably was wiped
out. Further developments in the
Ponzi high finance were anxiously
awaited in the financial district.
From the federal building Ponzi went
to police headquarters where he was
photogra phed and his finger prints taken
Ponz was held in bail of $4,000 on
warrant charging larceny before the
municipal court. and will! be given hear
ing on August g.
HAS 10000 INVESTORS
Some 10000 investors intrusted total
variously estimated at from sl5.000,0O to
making scheme which postal officials to-
day declared to be absolutely impossible
of fuhllnent.
| Ponzi surrendered to the federal authori-
ties this afternoon, explaining that he
was unable TO meet his obligations be-
cause of the closing yesterday of the
| Hanover Trust company. where the buik
| Of his funds were deposited. He was ar
rested, charged with having used the
mails to defraud, arraigned and held In
bonds Of $4,000 for a hearing August H.
Morris Rudnick, real estate dealer of the
! Roxbury district, furnished the sureties
Meanwhile a warrant charging Ponzi with
larceny had been obtained by the State
police In the municipal court and upon
leaving the federal building he was re-
arrested and held by the City Court in
$4,000 bail for appearance August g.
Rudnick again went on Ponzfs bonds
and the latter was released.
SAID TO OWE 100000
Developments followed thick and fast
| to-day. AS Ponzi was being arraigned
before United States Commissioner
Hayes. Edwin L. Pride, who is examin-
ing the books Of the Securities Exchange
company for the federal authorities.
nounced that It had already been shown
that Ponzi owed 100000. State Attor-
ney General j. Weston Allen. who is con-
Quoting separate investigation. made
known his opinion that Ponzi's liabilities
would run into the millions State Bank
Examiner Joseph c. Allen issued a state
| ment declaring that the capital Of the
F., Hanover Trust company, Of which Ponzi
was until yesterday director. was seri-
ously impaired and probably wiped out,
State Treasurer Fred ]. Burrel attacked
the bank commissioner for not having
given him opportunity to withdraw State
funds before the Hanover was closed and
i Governor Coolidge demanded that Bur-
rell make known how much of the State
money had been tied up by the closing OF
the trust company.
LARCENY ALSO CHARGED
A warrant charging Charles Ponzi with
larceny in three counts, involving $40
was issued by Judge Bennett in the NUM-
| cipal court this afternoon. 1t was granted
on application Of Assistant Attorney Cen
erals Abbott and Hurwitz and Captain
Armstrong of the Bureau of Criminal In
vestigation OF the Boston police. 1t was
announced that Ponzi would give himself
into the custody of the police as soon as
, his surety in the federal case was ar.
ranged.
, Boston. Aug. 12.-In reply to specific
Inquiries. Inspector Moseby said;
Our attention was first called to
Ponzi's operations last February when
inquiries began coming into the office
from investors and prospective inves-
. tors, and an investigation was imme-
. diately undertaken. Since that time we
have been working in Europe and else.
} where.
RI As result OF this investigation.
, we have obtained conclusive evidence
that there has been no abnormal issue
or redemption of International reply
? coupons while on the other hand in
some countries the use OF coupons
has been greatly curtailed to pre- =
vent this very scheme which no doubt
, has reached the ears Of postal Off
Gals in many foreign countries. There
, Is no means by which a man can man =
!, ipulate International reply coupons.
, Ponzi's claim that he has made mil
lions in this way is simply a stupen-
dous fraud with nothing upon which