Evening star. [volume] (Washington, D.C.) 1854-1972, 1949-01-18

MAKING 1T OFFICIAL-Movie
the official "salesman's' identif
237 Tenth street NE, after buy
Shoreham Hotel last night.
had been able to rake in before
the postal inspectors shut off their
receipt of mail.
As Ponzi's fame spread, a flood of
mail from all parts Of the country
began to arrive in his Offices. Letters
from small investors in every State
tcontained checks and money orders.
Eaters from Europe-from Holland
and Switzerland, were in Ponzi'S
files.
Bewildered by Own Scheme.
Ponzi, himself, was bewildered by
the Colossus into which had grown
the scheme which was born to him
while he was engaged in a modest
Boston importing business only a
few months before. Even handling
the incoming cash became a prob
lem. 1t was stuffed into desk draw
ers and, when these were filled, the
Office waS1ebaskets were employed.
And the bookkeeping system COM
pletely collapsed from the weight Of
its burdens.
All of this that the people called
wizardry, Ponzi said, was not wiz
ardry at all. 1t was quite simple If
one knew the formula. 1t was done
simply through the purchase Of In
ternational Postal Union reply cou-
pons throughout the world taking
advantage of favorable rates OF ex-
change. Thus, Ponzi said, it was
quite possible to turn dollar into a
dollar and a half within As days.
Ponzi bought palatial home In
Lexington, Mass, for his American
born, dark-eyed wife Rose. He sent
for his. aged mother to come from
Italy and chartered a tug to meet
her. She died surrounded with lux
urieS.
ThrOngs Hailed Him.
! Each morning a chauffeur drove
Ponzi to his Offices in an enormous,
cream colored automobile. Police
cleared a path for him through the
throngs that crowded narrow, old
School street in front of his offices.
The men cheered him and pretty
Office girls blew kisses toward him.
Then his house of cards collapsed.
While his detractors promised to
send him to jail, his supporters i'm
piled an intention to run him for
office-if he would become a citizen
and he, naively, implied his con-
sent.
Ponzi's props began to crack when
newspapers delved into his past. He
brought suit against one of them
for $1,000, 900, alleging libel and de-
fed his detractors. But they hit back
at him and the controversy started
a run on Ponzi's Offices.
Welcomes Federal Inquiry.
Investors began demanding their
money back, and Ponzi paid with
such alacrity that hundreds again
found places in the line and REIN
vested their recovered funds.
Then there was the incident Of
the Hanover Trust Co. of Boston.
Ponzi favored this large downtown
bank with his account and then
purchased sufficient stock in it to
give him controlling interest. Thus
he caused the officials OF the insti-
tuition to do things which the bank
commissioner forbade, and the bank
was closed. August l, 1920, to the
financial loss of thousands. The
action also shut off payment on
Ponzis checks.
After PonZi surrendered to Federal
authorities on August 2, 1920, bank
ruptcy proceedings were begun.
On December l, 1920, in the
United States District Court, Ponzi
changed his plea of not guilty to
guilty. There were two indictments
containing "a counts, but he was
asked to plead to only one. His face
was lined then, and his voice, high
pitched, betrayed the strain he had
undergone. His wife wept silently.
The court imposed the maximum
sentence permissible under the law
from four to five years.
But the State OF Massachusetts
also had indicted him, charging
larceny in connection with his 1920
enterprise. So when he came out
of Plymouth Jail he faced another
trial, and on February 26, 1925,
was convicted and sentenced to
seven to nine years.
Old Record Comes to Light.
| In the State trial Ponzi acted as
his own lawyer, pleading that he
was without funds to retain an
other. He had studied law while
in Jail. Ponzi himself said when
it was all over that it was "a very
poor job"
While on bail pending appeal he
did a. turn in vaudeville at $1,000 q
week and then went to Florida.
He hoped to recuperate his for
tunes in the land boom there, but
got into further difficulty through
his "Charpon Land Syndicate" He
was convicted at Jacksonville OF
fraud in a land scheme and sent
enced to year in Jail. On June 8
1925, he jumped his bail and a
general alarm was broadcast by
both Florida and Massachusetts,.
Five days later he lodged the
authorities at Houston, Tex, and
shipped as a common seaman aboard
an Italian treighter, bound for
Genoa. On June 28 the boat
touched New Orleans and Houston
deputy sheriff arrested him. Texas
granted q Massachusetts, requisition
for him on August 2 and shortly
afterward he started to serve his
State prison term.
He was released February IA, 1884,
a chastened and penitent man OF Sc
years. He asked that he be given
a chance to work unmolested.
But Government agents were
awaiting him with a warrant for
his deportation. immigration off,