Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [107]
Dressed for the role of banker, in a soft, black suit coat with a chalk stripe, Ponzi sent word to Daniels requesting a meeting. No lawyers, just two business acquaintances working out their differences. Ponzi chose his home turf: Hanover Trust. Daniels was certain this would be the biggest payday of his life. His suit claiming half ownership of Ponzi’s business had no merit, but sometimes it pays to be a nuisance, and this appeared to be one of those times. As for Ponzi, he was willing to pay a high price, but he wanted to limit the damage. Daniels made an opening bid of $100,000, but when Ponzi scoffed he quickly dropped to seventy-five thousand. Ponzi knew he could get him for less, and he offered an even fifty thousand dollars. Daniels leapt at it.
Ponzi ordered Hanover Trust officials to bring him ten thousand dollars in cash and a certified check for the balance. He hustled Daniels around the corner to Water Street, where the Locomobile was rumbling in wait. They drove together to the courthouse, where Daniels obligingly signed the papers withdrawing his suit. From there they drove to the Cosmopolitan Trust Company, where $389,000 in Ponzi’s accounts had been locked up for a month. But there was a hitch. Cosmopolitan’s president, Max Mitchell, had grown attached to Ponzi’s money. He refused to empty the account into Ponzi’s hands unless an attorney for Daniels vouched for the settlement.
Frustrated but eager to move things along, Ponzi agreed to call Daniels’s lawyer, Isaac Harris. Daniels, however, stopped him. True to form, Daniels wanted to cheat his lawyer out of the deal. But Mitchell held firm: no lawyer, no money. Facing a stalemate, Daniels agreed to involve Harris on one condition: Ponzi would have to support Daniels in a lie to the lawyer—Daniels intended to say the settlement had been for only twenty thousand dollars, thus lowering Harris’s share. Fine, Ponzi said, just call him.
Lawyers hate to be the last to know anything, so Harris began yelling the moment he arrived at Cosmopolitan Trust. He thought the suit was worth at least a half million dollars, and here Daniels had settled for peanuts. Recognizing that the deed was done, Harris calmed down, mostly after Daniels agreed to pay him ninety-five hundred dollars and Ponzi kicked in another five thousand. With Harris pacified, Ponzi could finally make his withdrawal. He insisted on cash, pocketing thirty-eight ten-thousand-dollar bills and assorted smaller ones. Ponzi walked out of Cosmopolitan like a strapping six-footer.
Daniels claimed victory. “I could have got more if I had presented my evidence to the court, no doubt,” he prevaricated. Seeing an opportunity to needle Harris, Daniels added, “But the lawyers might have got it all. Now I am happy and can sleep tonight.” Best of all, Daniels said, Ponzi had agreed to involve him in the mammoth new company being launched next week.
Ponzi’s pockets overflowed with cash. “What a nice picking I would have made for some of the stickup boys,” he joked after depositing the money at the Hanover Trust. It could not have come at a better time: 255 of his investors were massed in Pi Alley. The good news, from the standpoint of confidence, was that only ten were in line to withdraw their principal before maturity. But that was also the bad news. The rest held matured notes on which Ponzi had promised 50 percent interest. Nevertheless, with Daniels’s suit settled, Ponzi felt more in control, more certain of conquest, than he had in two weeks.
“I am now on the offensive,” he told the reporters trailing him.
Impressed by his refusal to succumb, the reporters peppered Ponzi with questions