Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [100]
He quoted banker Simon Swig as questioning Ponzi’s sanity and denounced “Wall Street ‘experts’ who never did anything like it themselves offering ‘sure-thing’ explanations of his ‘operations.’ ” McMasters made Pelletier out to be something of a hero, claiming that the district attorney had said at their meeting, “See here, Ponzi, I think your scheme is crooked.” To explain why he had gone to the newspaper, McMasters raised the banner of altruism: “As a publicity man, my first duty is to the public.” He wrote nothing about the money Grozier had paid him.
Editorial cartoon by William Norman Ritchie in The Boston Post, August 3, 1920.
The Boston Globe
CHAPTER FIFTEEN
“YOU DISCOVERED THE MONEY!”
Anxious investors began gathering in Pi Alley at six-thirty Monday morning, more than two hours before the doors would open at the Securities Exchange Company. The wound had reopened. Ponzi’s success in restoring confidence had been undone by McMasters’s story in the Post. More people than any day the previous week clamored for refunds. The alley soon overflowed. People spilled around the corner into Court Square, next to City Hall. A large detail of police turned out to assist the Pinkertons, some of the officers mounted, some on foot, and a couple on a nearby roof with field glasses, watching for pickpockets.
By ten o’clock several thousand men and women stood in line, shoving and swaying and surging and sweating in the rising heat. Newsboys with armloads of Posts roamed through the horde, doing brisk business. Some onlookers loitered in the street just for the spectacle. A few said they were holding on to the notes and their faith in Ponzi. Those who did want their money had to suffer the slow progress to the entrance to the Bell-in-Hand, then through a rear door to a stairway, then through labyrinthine hallways to the Securities Exchange Company. Clerks brought them a dozen at a time through the boarded-up front door—there had been no time to replace the glass that had been shattered the week before—and soon they emerged with checks for their money drawn on Ponzi’s Hanover Trust accounts. The wait proved too much for several women, who fainted from exhaustion in the poorly ventilated building and were carried outside to be revived. Soon Ponzi’s clerks began pulling women from the line and leading them up a side entrance into 27 School Street.
Speculators returned to work, buying not-yet-matured Ponzi notes at a discount, in most cases paying 90 percent of the original investment. Among them were several Ponzi agents, whose lucrative 10 percent commissions had dried up the moment Ponzi had stopped taking investments. One was Ricardo Bogni, the South End bricklayer who had initially invested after Ponzi had assured his wife that she could bet her shoes on his business. Bogni roamed the alley, eventually buying nineteen notes for a little more than seven thousand dollars before he ran out of cash. He could have made a quick buck standing in line himself and cashing them at a teller’s window, but Bogni had complete faith in Ponzi. He was certain he would make a killing once they matured. Several of Ponzi’s branches in other cities experienced miniature versions of the Boston run, though most closed and advised investors to travel to School Street for their money.
The uproar and the allegations by McMasters proved too much for Roberto de Masellis, the foreign exchange expert Ponzi had hired a month earlier to improve his accounting system. De Masellis gathered his belongings and walked out. But Lucy Meli and the rest of the Ponzi staff remained at their posts, fighting their own doubts and fatigue, expressing confidence in their boss, and paying claims as fast as they could.
Ponzi arrived