Ponzi: The Financial Idiot Who Scammed the World #Finance

was a time when the financial World marveled at the genius of Charles Ponzi the man who was in charge of one of the most successful business Investments in America he had millions of dollars at his disposal and crowds of people lining up literally begging him to take their

money little did everyone know the ponzi’s business was built on nothing but lies the whole thing was an outrageous scam one which turned Ponzi into a very rich man that ruined the lives of thousands of innocent people ponzi’s deception was so shocking and Infamous that even now a

hundred years later the scam still Shares his name the Ponzi scheme this CashNews.co is the Untold Truth of The Man Behind the scam and how to make millions of dollars of nothing but lies foreign was born in Italy on March 3rd 1882. his father was a hard-working Postman and overall

his family was financially comfortable but it used to be so much more than that ponzi’s grandparents and great-grandparents had all been successful businessmen merchants and public officials the demotion to the working class really affected Ponzi from a young age and made him bitter and

resentful he wondered why he had to suffer for his family’s failing fortunes why couldn’t he have been born rich and enjoy a life of leisure without having to worry about a job or money as a teenager Ponzi inherited a modest sum of money following his father’s death he used it to

enroll in college as his mother had her heart set on him going to a prestigious college to get an education but Ponzi had other plans instead of studying and going to class he decided to burn through his Savings addressing in the latest fashions and eating at the fanciest

restaurants in town then at night maybe the theater or the Opera or some gambling at the casino with his wealthy friends nothing was too extravagant or expensive for him Ponzi liked to pretend that he was just like his rich friends and that he had endless money but it was an illusion and one day it

all came crashing down around him his inheritance money finally ran out and since his Studies have been completely neglected he had no chance of graduating his uncle offered him work as a clerk but the idea of finding a nine-to-five job repulsed Fonzie who considered himself too good for menial

labor he felt he had only one choice left traveled to America and strike it rich there thank you in 1903 Ponzi arrived in Boston aboard the SS Vancouver he felt a deep shame in his heart that he’d let his mother down and believed that the only way to redeem himself was to return to Italy as a

rich man the only problem was he had no idea how to do that America proved to be a much-needed reality check for young Ponzi there was no more inheritance money and no more relatives to bail him out of trouble as distasteful as he found physical labor he had no choice if he wanted to eat he needed

to work Ponzi spent the next few years up and down the East Coast from New York to Florida he worked as a sign painter a waiter a grocery clerk a dishwasher a factory hand an Insurance salesman and a sewing machine repairman none of the gigs lasted long though Ponzi either quit

because he hated the work or he was fired because he tried to cheat the customers this often meant he resorted to stealing or begging for scraps of food and sleeping in Parks it was a far cry from his Carefree days as a high roller back in Rome and even when Ponzi did manage to scrape together a

bit of cash he would inevitably spend it all on a big night owl or a week weekend vacation to remind himself of the good old days in 1907 Ponzi traveled to Montreal hoping that Canada would prove to be more welcoming and lucrative and at first things were looking up for him he found work as a clerk

at a bank that mainly served Italian immigrants called Banco zarosi it was the same type of job that ponzia turned down back in Rome because he considered himself too good for it but it was surprising how a few years on the streets working for minimum wage could change his perspective unfortunately

for Ponzi his new job did not last long because his boss was a con man so Rossi was using an age-old fraud known as robbing Peter to pay Paul in other words he was using the money from his newest clients in order to pay off his older ones this allowed zarosi to offer six percent Interest

Rates on all Bank deposits which was double the average rate however his clients started getting suspicious when their relatives back home kept complaining they weren’t receiving the money the bank was supposed to send in mid-1908 the authorities began investigating the bank for

embezzlement at which point zarosi filled a suitcase with all the cash he could carry and fled to Mexico leaving his employees in the family to deal with with the Fallout from the scam not wanting to be the one who takes the fall Ponzi intended to travel back to the United States so he didn’t

have to be involved in the investigation and Fallout from zarossi’s scam but before that he did something very stupid so that he wouldn’t have to start from scratch again he thought he would give himself a little going away present by forging a check from one of his bank’s clients

a shipping firm called the Canadian warehousing company Ponzi stole a blank check from the manager’s checkbook and filled it out for 423.58 a believable and unsuspicious amount thought ponzie but as soon as he tried to catch the fraudulent check the bank teller easily spotted the fake

signature and alerted the police Ponzi got three years in prison at St Vincent de Paul Penitentiary but of course this was just the start of ponzi’s crimes thank you Ponzi was released on parole after two years and he immediately made plans to travel to the states again but he didn’t go

alone instead he took with him five Italian immigrants all fresh off the boat without any proper papers as he’d been paid to smuggle these men into America Fonzi figured this would set him up with a nice quick payday now that he was a free man again however he got caught and was arrested once

again still Ponzi hoped that if he pled guilty the judge would go easy on him and maybe just let him off with a small fine but once the judge banged his gavel and passed the sentence Fonzie’s heart sank he was given another two years in federal prison in Atlanta after being released from jail

for a second time Ponzi was unsure of his next move he’d come up with all these different plans to get rich whilst in prison but they all required money and Ponzi was penniless therefore with little Choice he wandered from state to state again working whatever odd jobs came his way ultimately

he found a decent position as a clerk with an import export business called the Jr Pool Company in Boston so after a decade and a half in North America he’d ended up in the same place where he began life in Boston was decidedly better for Ponzi the second time around the though he was good at

his job for a change and it was promoted for it not just that but Ponzi met 21 year old Rose geneko and instantly fell head over heels for her the first time they spoke Ponzi was so nervous that he could barely string two words together fortunately for him the feeling was mutual and the two got

married in early 1918. his new married life made Ponzi feel happy but he also felt inadequate even though Rose was content with a simple life Ponte had much grander Ambitions he wanted to be able to shower her with diamond rings fancy clothes and expensive holidays obviously this was never going to

happen on a Clerk’s salary so six months after the wedding Ponte quit his steady job at J.R pool and began looking for something new to do he started off by joining his father-in-law’s Wholesale Fruit selling business the company was struggling and since Ponzi always bragged to his wife

about being a financial genius this was the time for him to show everyone what he could do however Ponzi was unable to save the failing business and instead it went bankrupt by the end of the year undeterred by his recent failure Ponzi rented a small office to start his own import export business

instead but the World At Large took no notice of him Ponzi lack the experience in the context to attract any serious business however Ponzi refused to believe he was the problem and thought that maybe he just needed to advertise his Services more unfortunately a few quick calculations made him

realize that the costs were well outside of his reach just like that ponzi’s input and Export business became another failed Venture the only silver lining for Ponzi was this failure had already given him his next idea when Ponzi had seen how much money it would cost him to publicize his

Services he thought that maybe he should publish his own trade magazine so that other companies would pay him the same kind of giant advertising fees Ponzi had zero experience when it came to publishing but in his mind this was already a million dollar business idea he would call his magazine the

Trader’s guide and he would send it for free to a hundred thousand companies doubling the circulation number with each new issue according to ponzi’s calculations his initial mailing would cost him around thirty five thousand dollars but he would make eighty thousand dollars in

advertising Income since he was certain that companies would be lining up around the block to publicize their services in its magazine certain of success Ponzi rented a much larger office and hired three staff members and then he began writing and writing to investors and business

owners about the possibility of getting involved with the first ever issue of the Trader’s guide then reality Came Crashing Down on Ponzi like a ton of bricks nobody was interested nobody cared about his obscure little trade magazine and they certainly were not willing to pay his exorbitant

rates to get featured on her then when Ponzi went to his local bank to get a Loan because he was almost out of money he got another harsh dose of reality when the bank president refused his application on the spot telling him he’d rather close Bundy’s account than owed

him a single dollar these were bitter pills to swallow for Ponzi and left with little Choice he had to fire his staff and sublet his office space to earn some money but his dreams and Ambitions remained as powerful as ever and Ponzi hoped that his next idea would be the one to make him Rich one day

in August 1919 Ponzi was going through his mail when he spotted a letter from Spain back when he still thought the Trader’s guide would become the next big thing in advertising Ponzi was not content with simply doing business in America he’d envisioned that his guide would be translated

into French German Italian Spanish and Portuguese and that he would expand his business into Europe unless he’d contacted many foreign companies about the possibility of doing business together and it seems that at least one of them was interested the spanish author of The Letter requested a

copy of the Trader’s guide and to pay for postage he included something that Ponzi had never seen before an international reply coupon or IRC ircs were prepaid coupons that could be bought in exchange for postage stamps in any country that was a member of the universal Postal Union they were

commonly used by people who sent letters internationally to cover the cost of a return letter where they were not expecting the other person to pay the postage but for Ponzi they were a bot of inspiration and were about to change his life forever foreign Ed about the concept of Arbitrage the

strategy of buying and selling an asset in different Markets in order to take advantage of the price difference and make a Profit in the case of ircs they were always

exchanged for the same postage value regardless of the country but they were purchased at slightly different prices depending on the fluctuations in local currency so in theory Ponte could buy an IRC in Italy where the Lira had taken a serious hit after the war and then redeem it in the United

States for American postage stamps where he knew the dollar value would be slightly higher he would then sell those stamps and make a tiny Profit then by scaling the operation to thousands even millions of ircs who’s looking at some serious money this was ponzi’s new

business plan and on paper it seemed like not only a good idea but also perfectly legal Arbitrage was a Sound Investment tactic that had been in use for centuries so in January 1920 Ponte started a new company to handle what seemed to be his most promising business venture yet and he called it the

Securities Exchange company unfortunately for Ponzi like many times before reality came in to crush his hopes and dreams the truth was that the Profits from the Arbitrage of ircs were so small that they would be completely wiped out by the cost of shipping the ircs

from one country to another there literally were not enough ircs in the entire world to sustain the kind of operation that Ponzi was imagining and yet he refused to let go of this idea Ponzi was convinced that this was his Golden Goose his one-way ticket to the life of wealth and luxury he’d

always felt he deserved so when the legitimate business proved unsustainable he turned his idea into the infamous Ponzi scheme that Shares his name after all his plan to Arbitrage ircs sounded really good so even though it actually wasn’t good at all maybe he could convince

other people it would work and take their money now at its core the Ponzi scheme is similar to the classic fraud robbing Peter to pay Paul which Ponte saw firsthand back when he was involved working for banco’s Orosi it involves getting people to invest in a business opportunity by promising

them huge returns in a short amount of time with little to no risk however their money never really gets invested instead the frauds that keeps most of it for themselves whilst giving some of the Profits to earlier investors when these early investors see such large returns most of

them agree to reinvest their Profits back into the business to make even more money thinking it all seems to be working as advertised many of them even tell other people about the opportunity as they believe the earnings are perfectly legitimate but in reality all that’s

happening is those early investors are getting paid using some of the money from new investors it’s a very simple but effective system that preys on people’s greed and financial naivety but it requires a constant flow of new funds in order to keep the scam going as soon as the fraudster

can’t find enough new investors to pay off the returns of his older investors the con usually falls apart even though the scheme was named after Ponzi he was not the first one to do it a New York bookkeeper named William Miller who’s the same technique to con investors out of one

million dollars back in 1899 and outside of America a German actress named Adele Spitzer may have operated the first known Ponzi scheme in history in the early 1870s however Ponzi took the idea to a whole new level with the holidays approaching we all know most people put off shopping until the

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offered investors a staggering 50 return in 45 days or 100 return in 90 days he claimed to have a vast network of Agents all over the world who are buying ircs in bulk and shipping them to America if pressed for any details on his operation Ponzi would refuse to divulge any information simply

claiming that he couldn’t share all the details of exactly how it worked as then it could potentially help his competition most banks companies and serious investors stayed away from Ponzi they knew when something was too good to be true and in fact almost anyone who knew a thing or two about

Finances could tell that it was impossible for Ponte to deliver on his promises but they were not the ones Ponzi targeted he wanted the people who used to be just like him

with more dreams than Common Sense who were always looking for the best way to get rich quick this meant he preyed on the people with very little financial literacy often people in desperate need of money fast Ponzi understood that his true Talent was not dealing with

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finances but dealing with people he knew how to sell his business without appearing too ego or aggressive as if it made no difference to him whether he got their money or not Ponzi

started out with people in his own neighborhood and got 18 of them to invest in his first months once they were all paid their first round of Profits wood started spreading fast and soon thousands of people began crowding the streets outside ponzi’s office desperate to invest

their own money in this seemingly Surefire opportunity month after month Ponzi gained more and more clients raking in over 250 000 a day at the peak of his operation the Boston Post held him as a financial genius which gave him yet more perceived credibility and thus more investors soon Ponzi was

able to live the life he’d always dreamed of he moved into a giant mansion bought a fast car just only in expensive clothes all gold watches and Diamond pins and went on lavish first class trips it was the lifestyle that Ponzi always felt he deserved but he did not get to enjoy it long by the

start of the summer less than six months after Ponzi launched his new Venture there were Rumblings of doubt about his business initially everyone was afraid to say anything since Ponzi had successfully sued a financial analyst for libel who’d accuse Ponzi of lying after all many early

investors had been paid already which Ponte said was proof everything was legitimate but then the Boston Post the same newspaper that once proclaimed Ponzi a genius started to investigate his operation they brought in Clarence Baron president of Dow Jones and manager of the Wall Street Journal who

spotted the obvious scheme by his calculations Ponte would have needed to purchase 160 million ircs and yet there were only 27 000 in circulation in the whole world in July 1920 The post-presented Baron’s conclusions on the front page of the newspaper the crying Ponzi is a fraud and prompting

an investigation into his company but the wheels of Justice turned slowly and Ponzi was able to ease the concerns of the government officials initially by cooperating fully and even saying he’d stop taking in new Investments while he was under scrutiny but then Ponzi caused

his own downfall by hiring William McMasters as his publicist unlike Ponzi McMasters was an honest man who soon realized that his clients was a total fraud he later said Ponzi is a financial idiot he can hardly even add up he sits with his feet on the desk smoking expensive cigars and a diamond

holder and talking complete gibberish about postal coupons with access to all of ponzi’s Records McMasters collected the evidence he needed and went to the Boston Post where he wrote a Pulitzer prize-winning expose detailing all of ponzi’s Secrets this time the game was really up and

the Ponzi scheme collapsed several Banks had to declare bankruptcy tens of thousands of people lost their life Savings and Ponzi himself was indicted on 86 counts of mail fraud however the con managed to strike a deal and pleaded guilty to only a single charge of mail fraud

receiving just five years in federal prison a relatively small amount given the huge amount of money stolen and the vast amount of lives ruled thank you Ponzi was released after three and a half years in prison and this time he was finally a changed man and ready to do some good in the world

I’m just kidding he literally tried a new scam immediately after getting released Ponzi knew that the government wanted to either Deport him to Italy or imprison him again on larceny charges so he fled to Florida where he planned to essentially repeat the Ponzi scam again he started a new

company the sharp on lands indica and sought people to invest in property around Jacksonville he offered even higher gains than before saying he could get people a 200 return in just 60 days the only problem was that the property he was selling was worthless swampland this time though there were no

takers ponzi’s fraud was soon exposed and he risked being sent to Massachusetts where a lengthy sentence awaited him not wanting to go back to prison yet again Ponte changed his look and tried to travel to Italy as a sailor aboard a cargo ship however he was recognized and arrested in New

Orleans Ponzi was now A desperate man he wrote to President Calvin Coolidge asking for Mercy even appeal to Mussolini to intervene on his behalf but of course nobody listened it was the end of the line for him Ponzi served another seven years in prison and the man who came out was not the same as

the one who went in Ponzi was a broken mess who had lost all the charm and confidence that once made him so rich as he faced deportation to Italy his wife chose to stay behind in America and divorced him Ponzi spent the rest of his years in poverty with only memories to comfort him of the times

when he had it all he ended up in Rio de Janeiro where he died in 1949 in a charity hospital and was buried in a pauper’s grave thus bringing an end to one of the most notorious Tales of rags to riches to rags in history however in terms of the amount of money Ponzi con people out of is

actually not one of the biggest Financial frauds does if you want to know about the guy who saw billions of dollars and then partied with celebrities like Leonardo Dicaprio and made The Wolf of Wall Street with the stolen money check out the absolutely insane story of Jolo just click the thumbnail

here now as it’s an awesome story and I think you’ll love it so we’ll hopefully see you there today