The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1920-08-12
CANNOT
keep PROMISE:
HELD BY U. s.
Financial Wizard" Arrested
at Boston, Admitting, it is
Said. He Cannot Make His
Agreement Good.
HIS BANK "RUINED?'
(By Associated Press)

(By Associated Press)
BOSTON, Mass, Aug. 12.- Charles
Ponzi today surrendered himself to-
the federal authorities, charged with
using the mails to defraud.
At the time Ponzi gave himself up
a hearing was being held before Judge
Bennett, Of the municipal court, sit
ting in chambers on a police appl,ca-
tion for arrest. The hearing was
secret.
District Attorney Gallagher said
that Ponzi has surrendered because
he felt himself unable to carry out
promises he had made for the re-
demption of his notes tomorrow.
Federal Auditor Edwin L. Pride
stated today that Ponzi's liabilities
were upwards of $7.0O0.OOO. Ponzi
claims assets Of $4,0o0,O0O.
With state action against him. the
young Italian turned a trick by put
ting himself in the custody of the fed
eral authorities at the moment thay
were petttioning a municipal court
Judge.
Ponzi apparently was alert as to
what was imminent and, leaving his
home early this afternoon, hurried to
the office of the marshal.
Pleads Not Guilty
His arratgnment followed. Ponzi
pleaded not guilty and was held in
$4,000 bail for a hearing Aug. 10.
He said that he would furnish surety.
The surrender did not deter the
state authorities from their purpose
to obtain his arrest 1t was said that
their charge would be larceny and the
hearing continued while Ponzi waited
for bail.
Disposition Of the Hanover Trust
company shared in the public interest
the fate of himself and his company,
the securities exchange.
A creditors petition asking for the
appointment of receiver, was filed in
the federal court today.
Bank Commissioner Allen announ ced
that the capital of tho Hanover Trust
company probably had been complete
ly wiped out.
The bank was closed yesterday.
Charles Ponzi had been director up
to yesterday.
home to insure that people kept away
from him early this morning.
Investigating officials forecast fur
ther developments today to follow the
disclosures made yesterday when Pom
ri admitted he had served terms of
imprisonment in Montreal and Allan
ia some years ago.
1t was while Ponzi was debating
this statement the Hanover Trust
company, in which he was a director
and shareholder and through which
had done a large checking busi-
ness, was closed.
Bank Commissioner Allen said his
action was due to findings by his ex-
aminers that the bank had made
loans (which were excessive and be-
yond the legal limit" and many loans
that are either bad or of doubtful val
ue."
Ponzi resigned from the banks d.
rectorate Immediately after the insti-
tuition was closed
The adult of the company's books
that is being conducted by Edwin L.
Pride, who was appointed by United
States Attorney Gallagher, is expect
ed to be completed by tomorrow
Replies to Attorney General Aliens
advertisement in many newspapers
requesting holders of Ponzi's notes to
communicate with Mr.. Allen contin-
ued to be received in large quantities,
1t was said.
Since spectators brought notes
from many persons in the crowds
which made the run on Ponzi's office
last week and said that they would
hold them until maturity. it IS be-
lieved that this class holds a substan-
tial amount of the financier's out
standing obligations.
In PonZiS statement he admitted
having served three years imprison-
mert at Montreal. Canada, for forgery
claiming, however, that while con-
nected with a banking institution, he
took the blame for acts that properly
belonged on the shoulders of his en-.
plover.
He again was sentenced to Atlanta
for two years for smuggling five Ita[
ians into the country from Canada in
violation of the immigrant laws. He
sad that this offense was due to the
fact that when released from the
Montreal prison he was pennless and
had to do what he could to get d
new start.
Asks for Chance.
He declared that he was entitled
TO his chance in the world despite the
sins" of his former life, pointing to
such men as Morse, who, released
from Atlanta. now occupies high
position in the banking world. He
said he felt he ought not to be the
object of persecution by newspapers,
federal and state agents and others
who were striving diligently for his
downfall