New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-08-13
Financial Wizard Said
To Be SsHopelessly In
solvent by Officials
Who Scanned Accounts
His Banks Capital
Believed Wiped Out
Hundreds of Frantic In
vestors Vainly Plead
for Payment of Notes
Special Dispatch to The Tribune

Special RiSpOfcD 10 IHc 1ftONNc
BOSTON. Aug. IL. - Charles
Ponzi, 'get-rich-quick" financier
who held out the lure of so per cent
interest in forty-fve days to in
vestors, was arrested twice to-day
on charges preferred by both the
Federal and state authorities. He
gave $4,000 bail before a United
States Commissioner on the charge
of using the mails to defraud, anc
$4,000 bond in the city court on 6
charge of larceny.
Other Developments in the case to-
day were;
An estimate that some 10000 per
sons intrusted upward of S20,000,000
TO the promoter, who held out the in
ducement of great profits to be made
in dealing in foreign exchange.
An admission by Ponzi that he
could not meet his liabilities.
statement by the Federal auditor
of Points books that his liabilities,
as already revealed, aggregate ST.
assets at $4,000 900. total which the
authorities believe to be too high.
statement by the State Bank
Examiner that the capital of the
Hanover Trust Company, of which
Ponzi was director, was not only
seriously impaired, but probably
wiped out.
Evldenc that proprietors of small
businesses, professional men and
women. clerks and stenographers by
the thousand had lent Ponzi money
and faced ruin.
declaration of a Postoffice in
spector that Ponzi's claim that he
had made millions by manipulating
International reply coupons was "a
stupendous fraud and that in six
years dealings in these coupons
throughout the international postal
union would not aggregate 100000.
Filing of suit for receivership
Sin addition to the involuntary bank
ruptcy proceedings instituted several
days ago
Declaration by Mrs. Ponzi that she
would stand by her husband and that
she wished he was without a penny,
that she could better show how deep
ly and truly she loved him."
The announcement of Ponzi's ares
brought note holders in droves to tn,
Office of J. Weston Allen, State Attor
ney General. They fairly besieged the
Office with tears in their eyes, men
women and even children, hoping
against hope that something could b,
saved from the wreck. Up to to-day
they had chung to the blind hope tha
the wizard" would weather the storm
and make good. But his arrest ant
frank admission that he could not pa,
his debts blasted their last hope.
Flood of Notes Pours in
Their pleas were pitiful, but nothing
could be done for them save the regis
tering of their notes with a view OF
ascertaining more definite figures or
the coupon kings" liabilities. Ever
the state authorities were amazed al
the Hood of notes that poured in. i
confirmed their worst fears that POM
had disposed of far larger number
Of notes than had been generally be
lieved.
The principal field of operations o
t f0nzl and his agents appears to have
been New England and New Jersey.
fonzls admission that he could no
pay his debts after his talk of bu
SS0Oo,OOO liabilities and assets of 81,
uVO,oU0 fairly swept off their feet thos,
who had stood by him through ever,
attack, even after his penitentiary rec
eerds had been made public and hi
laVorlte trust company closed. 1t pu
an ehectuai quietus on his talk of per
secution.
=, Ponzi surrendered at 1880 o'c,ocl
tnis afternoon, admitting himself un
able to meet his liabilities, was place,
under arrest and arraigned befor,
United States Commissioner Hayes.
Inc announcement that the POM
financial bubble was exploded was mad,
Continued on page 81