The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1920-08-12
P0NZI, SHORT OF
CASH, GIVES UP
TO j. S, OFFICER
Admits Criminal Record Here
and in Canada and Is now
Under Arrest
HIS BANK CLOSED
Bank Commissioner Says Entire
Capital of Bank Is.
Wiped Out
HIS BANK is CLOS E d

Boston, Aug. 12.-Charles Ponzi to-
day surrendered to the United States
marshal. The warrant for his arrest
charged him with using the mails to
defraud.
District Attorney Gallagher said that
POnZi had surrendered because he felt
himself unable to carry out promises
Tor the redemption of his notes to.
morrow.
Bank Commissioner Allen annOun-
ced this afternoon 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 director
up to yesterday.
Creditors have filed petitions in the
federal courts asking for the appoint
ment OF a receiver for POnzi.
Admits Prison Record
The bubble of Ponzi, who claimed
to have made millions of dollars in
deals in foreign exchange in few
months ago, began to burst when he
was accused of being an ex-convict,
and last night he issued a statement
admitting this. 5.......
Attorney Aliens stated today that
the liabilities of Charles Ponzi would
run into the millions.
Following this statement Ponzi
issued the following statement: Il
had made arrangements with the dis
trict attorney to meet my creditor
today and pay my liabilities with
cash; however, with the closing Of
the Hanover Trust Co. and the tying
ut of my other funds l find myself
unable to do so. I have notified my
attorneys and will ask them to defend
me-"
Federal auditors stated today that
Ponzi's liabilities would run upwards
OF seven million dollars. His assets
amount to about four millions.
Trust Company Closed
While he was making this state
ment. the Hanover Trust company,
in which Ponzi was director and
shareholder and through which he had
done large checking business, was
closed by order of Bank Commits
sioner Jos. C. Allen. POnzi at the
same time announced his resignation
from the banks directorate.
Commissioner Allen said that ne
had taken action because his exam.
iners had found that the bank had
made loans which "were excessive
and beyond the legal limit" and
many loans that are of either bad
or of very doubtful value"
Bank Denies Charges
The executive committee Of the
Hanover Trust company, in a state
ment, said the committee believed
that there were few poor loans on
the books and that there was no
reason to believe that the bank
would not continue to meet it's obli'
cations and that it had a cash re-
serve of three times the amount that
the law requires. William S. NC
Nary, treasurer of the bank, said
that Ponzi did not owe the bank a
cent. that any bank in the country
would have been glad of his account
and that Ponzi had paid out $6,OOO,'
900 through the bank.
Ponzi's confession followed the
publication in newspapers Of stories
of the career of "Charles Ponsi" in
Montreal. Confronted with these
stories, Ponzi conferred with his at
torneys and then gave to newspaper
men lengthy statement in which he
admitted that he and Ponsi were the
same man, that he had served 20
months in prison in Montreal for for
gerry and that subsequently he had
served two years in the federal peni.
tentiary at Atlanta for smuggling
Italians into this country.
Suffered for Others Crime
He asserted that his sentencefor
forgery resulted from his assuming
the blame for crime committed by
banker in Montreal, by whom he
had been employed and who had
fed to Mexico.
81 am not trying to pose as hero"
he added
AS to the smuggling incident, Ponzi
declared that he did not smuggle
Italians into this country.
"Within 10 days of my release
(from the Montreal PRISON." he said
81 was asked to escort five Italians
into the United States. I did not
smuggle them in. I crossed the bor.
uCI Oll llC OpCAAy anu Voo
placed Immediately under arrest"
Ponzi. in later statement reiter-
ated previous assertions that he was
solvent and could pay all notes out.
standing against him as a result Of
his operation Of the Securities Elk.
change company. 1t was the large
business done by this company.
which offered to pay SO per cent in.
terest in 80 days on all loans and
which in fact redeemed many notes
at that interest in As days, that re-
suited in the investigation now in
progress by federal and state author"
ties Ponzi claimed that through his
reply coupons in various European
countries he was able not only to
pay the large interest rate to inves-
tors but in addition, to make huge
proffc for biYoSolf