The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-08-12
.PONZ| ARRESTED;
USE Of MAILS TO
DEFRAUD CHARGED
SurrenderS to U. S. Marshal
Before Warrant Issued,
Saying Closing of Bank
Prevents Settlements.

BOSTON, Aug. 12.-Charles Ponzi to-
day surrendered to the United States
marshal and a warrant for his arrest
was prepared.
District Attorney Gallagher said Ponzi
mad surrendered because he felt him
self unable to carry out promises he
hdd made for redemption of his notes
tomorrow
At the time Ponzi gave himself up,
q hearing was being held before Judge
Bennett, Of the municipal court, sit
ting in chambers OH police applica-
ton for the arrest of the financier.
The hearing was secret.
Bank Commissioner Allen Announced
that the capital of the Hanover Trust
company probably had been completely
wiped out. The bank was closed by
the commissioner yesterday Ponzi had
been a director until yesterday.
Ponzi was arrested soon after his
surrender by the federal authorities on
a charge OF using the mails to defraud
Edwin l.. Pride, federal auditor said
Ponzfs liabilities were upward of ST.
100000 Ponzi claimed assets of $4,-
600, 900
Ponzi issued the following statement
after his arrest:
Il had an agreement with the district
attorney to go tomorrow and meet my
liabilities with cash. With the closing
OF the Hanover Trust~-company and
with other funds tied UP, find myself
unable to do so. felt it my duty TO
tell him and ask him to detain me-"
A creditors petition asking appoint =
ment of receiver for Ponz was. filed
in the federal court today.
Ponzi announced early today he would
go into seclusion at his home to rest
and recover from the nervous strain
caused by events of the last few days.
My nerves can't last forever" Ponzi
| SAID, II got In rpgt 7 n
ing to give out any more statements
for while. | am going to keep away
from people-not go down town"
He continued to assert he was solvent
and would pay all outstanding obliga-
tions.
Guards were posted around Ponzi's
home to keep people away from him.
Ponzi, 9fter learning of the closing of
the HANOVER Trust company issued the
following statement through his at
Il learn with regret that the COM
missioner has osdered the Hanover
Trust, company TO close it's doors
feel that this action on the part OF the
bank commissioners is merely a new at
tempt on his part to prevent me from
| which | have in that institution, In
the hope that 1 will not be able to meet
| my obligations TO MY note holders.
II put my money in a state trust
| COMPANY approved year dlleT year Dy
| the bank commissioners, examined,
understand, within three months, and
received a certificate of deposit for
81 100000, good anywhere in the hands
of any individual. bank or trust COM
pany, but not good now that the bank
commissioner has taken charge and
suspended payment of all the trust
companys obligation What merchant
or banker could stand the strain of
being compelled by the public author
tiles to meet obligations before they
came due, to pay notes upon which
| was merely an indorser, and at the
| same time be released of all liquid as
sets"
Bank Commissioner Allen was asked
If Ponzi's certificate of deposit OF
81 800 900 had anything to do with his
action.
THE Hanover Trust officials, acting
| contrary to law and against the specific
| direction of the commissioner of banks,
have paid either to PonZi or to his
agents almost 100000 of the $500, 600
represented in the certificate of de-
posit," he replied.
bank. he said:
II fear its capital has been impaired