New-York tribune., 1920-08-10
Financial Wizard Will
Not Pay Notes Falling
Due, but Blames State
Banking Commissioner
Bank Forbidden to
Cash His Checks
He Says He Is Solvent
and That Examination
of Books Will Prove 1t

BOSTON, Aug. 9.--Charles Ponzi,
Financial wizard" announced tonight
that he would mot pay out one cent of
money" tomorrow at his Offices.
Earlier in the day involuntary bank
ruptcy proceedings had been instituted
against Ponzi by three creditors and
Joseph C. Allen, State Bank Commits
sioner, had issued an order to the
Hanover Trust Company not to pay out
any more money on checks of Ponzi
or his agents.
Ponzi made the following statement:
Though l anticipate there will be
developments l will not pay the notes
| that have run forty-five days.
The Hanover Trust Company would
gladly honor these checks and cash
them, but the Bank Commissioner says
that this cannot be done.
'1n the Hanover Trust Company I
have two accounts. My personal ,ac-
have two accounts y my personal ac-
account is over million and a half,
more than six times the amount have
out in notes. But the Bank Commits
sioner has refused to permit me to
transfer my personal account to the
other one. BY what authority do not
know"
The Attorney General tonight or
dered the following advertisement pub
lished:
Call On Note Holders
"All persons holding unpaid notes
of the Securities Exchange Trust Com
pany or of Charles Ponzi are requst-
ed to notify, in person or by mail, the
department of the Attorney General,
giving the number and date of the
note, the amount loaned and the
amount due, the place where the loan
was made and the address of the hold
nished whore possible. This informa-
ton is desired in completing the in
vestigation now being made by the de-
partm
These developments in the affairs of
Ponzl, who rose to fame on his $50 per
cent in, as days" proposition, came on
the day on which he had declared his
intention to launch a new $1OO,0OO,OO0
worldwide undertaking.
The bankruptcy suit was filed by
Charles Cantwcll, James Fe1nald and
Harry Farrell, all Of Boston, the allega-
tion being made that Ponzi had favored
other creditors by transferring large
parts of his assets to them, including
Charles +. Hoffman. The three petit
TONERS had invested from $3.50 to $500
each in Ponzis foreign exchange en-
terprise, on which he claimed to have
made $9,000,000 profits since last fall.
Bank Commissioner Allen made the
following announcements:
81 have directed the Hanover Trust
Company not to pay any more checks
change Company or any Of his agents,
as the account Of Lucy Martelli, trus-
tee, against which these checks are
charged, is overdrawn."
No Sign of New Company
While the new 500, 900 900 company,
"The Charles Ponzi Company" may
have come into existence too day, there
was no sign of its activities at the
Ponzi Offices. All the business trans
acted there had to do with the enter
prise of the past, although a number
of the visitors, perhaps a score, wanted
to know when they could invest money
in the new undertaking. Among them
was Louis F. Mantan, of Portsmouth,
N. h., who announced he represented
many Italians in that city.
"When Attorney General Allen starts
in to ascertain what my liabilities are
will give him all the help possible.
And when he is finished L will show
him the money to cover them. But he
is endeavoring to find out my assets,
where they are and how l made my
nnoney, and nobody knows that but
Charley Ponzi, and nobody else is go
ing to know. l will die before l dis
close these facts to anybody.
"That | am solvent there is not the
slightest doubt in anybody's mind. 1
am not going to run away. That is
what the officials would like to have
me do. l am a. fighter, and l am going
to fight them to the end. And l am
going to win my fight.
Attorney General Allen, in a state
ment earlier in the day, declared that
"although Ponzi claims that his deal
ings in international reply coupons have
been conducted on a large scale. ag-
gregating millions Of dollars, the in
vestigatlon has disclosed nothing to
confirm this statement.
"Mr. Ponzi claims in this Office that
all the funds which he claimed to have
transferred to Europe by draft or
credits for the purpose of purchasing
reply coupons had been sent through a
New York institution. Later he said
he had received large amounts from
Europe from the sale and redemption
of coupons through the same institu-
tion.
"He refused to disclose the name of
the New Y ork institution. 1t does not
appear that Ponzi has ever received
any funds from Europe through either
of the two institutions that fit his de-
scription."
1t was announced to-day that the
audit of Ponzi's books by Edwin Pride
was to-day submitted to United States
Attorney Gallagher. Ponzi called at
Gallagher's Office Immediately and a
checking up" began.