The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1920-08-14
SECOND P0NZI
COMPANY HELD
IN BANKRUPTCY
Bank Commissioner Closes In
dustrial Association, Say
ing Cash Is Gone
FOUR ARE UNDER ARREST
Get-Rich-Quick Schemes Result
in Rush of Depositors
to Get Money
FOUR ARE UNDER ARREST

Boston, Aug. 14.-Bankr Commits
,sioner Joseph c. Allen today took
charge Of the affairs of the Polish
Industrial association conducting a
private bank at 81 Cross street in
this city. Henry H. Chielinski,
President of the Hanover Trust COM
pany, the chief depository of the
Charles Ponzi, which was closed last
Wednesday by the commissioner is
president of the industrial associa-
ton. H.
Bank Commissioner Allen said that
the loan of the association were
either bad or of doubtful value and
there was virtually no cash left. He
said his affairs were hOpelessly in
terwoven with those of the Hanover
Trust company. The capital Of the
association is $13,775.00 and it had
deposits of about $350.000.
Four Behind Bars
Four men who have accepted mil
lions of dollars from New England
investors in the last few months, on
promises Of payment of fabulous in
terest, are behind the bars.
Ponzi, whose spectacular financial
dealings have made his name known
the country over and three officers
of the Old Colony Foreign Exchange
company were arrested, taken into
the municipal court and held on $50
OO0 bonds each on technical charge
of larcency of $500 from persons un-
known. In default of bond they spent
last night in Jail. They are Charles
M. Brightwell, president and treas
urer of the concern; Fred Meyers,
sales agent. All three pleaded not
guilty.
Samuel Zorn was arrested at his
home in the Dorchester district last
night on a warrant charging larcency
Of $500 from persons unknown.
This was the same charge upon
which the three officers of the Old
Colony Foreign Exchange company
we're arrested earlier in the day.
Dealings Also Large
That the activities of this company
might have rivaled in extent the
dealings of Ponzi's Securities Ex--
change company was intimated by
Albert Hurwitz, assistant district at
torney of Suffolk county, when he
told the court that the amount in
yolyed in the transactions probably
would be shown to be hundreds OF
thousands of dollars. 1t was upon
this representation that he asked
hat the bonds be set at high figure.
The three, men will be given hear
ng on Aug. "a.
POnzps Partners Involved
Further bankruptcy proceedings in
which for the first time partners of
Ponzi were mentioned, were brought
n the federal court. The three Pc
itioners were holders Of Ponzfs
notes for a total of '$2,526. They
asked that Ponzi and John S. Don
lero of Medford and Guglielmo Ber-
ollotti of Parma, Italy, named as
lis partners in the Securities Ex-
change company, be adjudged bank
'upt.
Seals Officers Boxes
Mr.. Allen made it known in con-
,ection with the closing Of the Han
,ver Trust company that he had caus-
ID the state seal to be placed on an
he safe deposit boxes in that 1nstl-
ution used by Ponzi or by officers or
.mploves of the bank. He said this
vas done as precautiOn against lhe
possible removal of securities or 9TH
r. valuables pending the settlement
# the hanks affairs.
The arrest of officers of the Ola
Colony Foreign Exchange company
anne after frenzied run by note
lolders upon the company's OFFICES
N Devonshire street. One OF the re-
ults of this run was an Imperative
,otice served upon President Bright
veil nv the trustee of the building to
AGATE his quarters within a half an
lour. Shortly afterward the offices
we're closed.
More than a hundred note holders
we're in the Old Colony Foreign Ex-
hange company's outer offices for
lalf a day.
CRY for Money
The announcement that payment
,ad been suspended brought loud
ries from the waiting crowd.
"We want our money" several
houted.
There was a rush toward the inner
ffice, Guards employed by the con-
ern struggled to keep the people
ack. Threats were made against