The daily banner. (Cambridge, Md.) 1897-2008, 1920-08-13
PONzI Arrested;
CAVE HIMSELF Up
Released in $4,000 Bail on
Mail Fraud Charge.
STATE ALSO PROSECUTES
Liabilities of $50 Per Cent" Wizard
Placed at $1,000, 900, With Assets
of $4,ooo,ooo Il

| Boston, Aug. 13.-After surrender
ing to the federal authorities Charlie
Ponzi was placed under arrest, charg
ed with using the mails to defraud. <
After wait in the marshals ofic.
/ of several hours for a bOndsman Pom
! ri obtained his release. His bonds
man is Morris Rudnick, real estati
dealer, who furnished the requires
surety of $4,000.
On leaving the federal building Pun
ri was taken to the municipal cour
to answer TO the warrant charging
larceny issued there by the state au
thorities, while he was in federal Gus
tody. He was held in $4,000 bail OF
this charge.
From there PonZi went to police
headquarters, where he was photo
graphed and his finger prints taken.
The bank commissioner, Joseph c
Allen, declared the capital of tht
Hanover Trust company, a Ponzi de
pository, which was closed on Tues
day, probably was wiped out. Fur
ther developments in the POnzi higI
finance were anxiously awaited in the
financial district.
Edwin l.. Pride, federal auditor
stated Ponzi's liabilities were upward
of S7,OOO,O0O. Ponzi claimed assets OF
$4,000,000.
United States District Attorney Gal;
lagher said Ponzi had surrendered be-
cause he felt himself unable to carry
out promises he had made for the re.
demption of the notes.
Ponzi later issued the following
statement:
Il had an agreement with the dis
trict attorney TO meet my liabilities
with cash. With the closing of the
Hanover Trust company and with
other funds tied up l find myself un-
able to do so. I felt it my duty to
tell him and ask him to detain me.
The bank commissioner issued this
statement:
81 wish to correct a statement
which appeared to the effect the capt.
tai of the Hanover Trust company is
not impaired. That statement is not
correct. There is no doubt whatso
ever the capital is badly impaired.
and it is probably wiped out COM
pletely.
at should be remembered that the
stockholders have liability Of a 100
per cent assessment, provided such
asse Ssment is necessary to enable the
bank to pay 100 cents on the dollar
10 all depositors.
Before the depOSitOrS can suffer a
loss therefore, the capital stock of
100000. the surplus of 100000 and
the stockholders liability Of S400,00l
provided the stockholders can pay
must first be used to take care of
losses"
To his formal statement Mr.. Allen
added he would complete the investi-
CATION of the banks affairs before any
announcement could be made of its
exact condition. This he said in reply
to an inquiry as to whether he
thought the 100000 assets suggested
would be sufficient to cover all claims.
A creditors petition asking for the
appointment of a receiver for Ponzi
was filed in the federal court.
Fred J. Burrel, state treasurer,
gave out a statement in reference TO
the states deposit in the Hanover
Trust company He said the bank
was made a depository by vote of the
governor and council on March 90,
1918, and May I of that year deposit
was made there by the former state
treasurer, Charles ]. Burreu. He de-
clined to say what the amount was.
He expressed the belief the bank
would be found entirely solvent and
every depositOr will be paid dollar
for dollar He criticised the bank
commissioner for the latter's alleged
failure to notify him the bank was to-
be closed.