Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [117]
The afternoon was slipping away and still the show had not begun. Ponzi hated to disappoint his public, so at two forty-five he climbed onto a table, cigarette holder dangling from his fingers, and agreed to take questions. Before he could begin, someone called out, “Three cheers for Ponzi!” The crowd answered with gusto. Ponzi then regaled the room with his version of his rise from obscurity and poverty to fame and, apparently, fortune, tailoring his story to fit some of the latest developments. He said he obtained reply coupons directly from foreign governments, and that was why his activities were not reflected on the published tallies of how many coupons were issued in recent years. Ponzi also said those governments had profited from the deals, and that was why he had to keep his overseas contacts confidential. He vowed to reopen by Saturday, smiled incessantly, and needled the attorney general: “He has a good job, but mine is better.” The audience roared. Ponzi got the same response when he paid mock respects to “my opponents, the bankers.”
Finally it was time to pit Ponzi against Dunninger, wizard against wizard. First, Dunninger agreed to lower the stakes by promising not to reveal Ponzi’s business secrets. The mystic asked Ponzi to write a sentence on a piece of paper and place it in his pocket.
“First,” said Dunninger, “is the letter ‘I.’ ”
“Correct,” agreed Ponzi.
“The next letter is ‘P,’ ” said Dunninger.
“Correct,” Ponzi repeated.
Encouraged, Dunninger claimed to have received a vision of the complete sentence in Ponzi’s pocket: “I propose to apply to banking the principle of giving the people full value for the use of their money.” It was, indeed, what Ponzi had written, and the audience left the ballroom satisfied and enthralled at the magic they had witnessed. It was 1920, and anything seemed possible.
While Ponzi cavorted with the Kiwanians, offers of money flooded his offices. Hundreds of letters arrived at 27 School Street containing checks in amounts from twenty-five to ten thousand dollars, that last sum from a man in Savannah, Georgia. But Ponzi’s clerks sent them all back on his orders. Ponzi spoke only briefly with reporters, using them to send a message to his investors: Hang on and do not cooperate with the attorney general. Nevertheless, about a hundred Ponzi note holders turned up at the State House.
Pride continued to refine his calculations, while federal prosecutor Dan Gallagher and Attorney General J. Weston Allen held one meeting after another to plot their next moves. Meanwhile, Bank Commissioner Allen took aim at a more established institution than Ponzi: the Hanover Trust Company.
As midnight approached, Herb Baldwin’s copyrighted story rolled off the Post presses with a cannon’s roar:
CANADIAN “PONSI” SERVED JAIL TERM
Montreal Police, Jail Warden and Others Declare That Charles Ponzi of Boston and Charles Ponsi of Montreal Who Was Sentenced to Two and Half Years in Jail for Forgery on Italian Bank Are One and the Same Man
State Authorities Now Active and Promise at Least One Arrest in Case Soon
The headline writer had nailed it, though in his excitement he’d overstated the “promise” of an impending arrest. The story said only that one or more arrests were expected “momentarily,” and no state officials were quoted, even anonymously, making such a claim. Baldwin also overstepped a bit, making it seem as though Ponzi’s forgery conviction was directly related to Zarossi’s scheme of swindling his depositors by stealing money they intended for their relatives in Italy. Despite those minor missteps, Baldwin’s story was as damaging as Ponzi had feared it would be when Santosuosso had first called to inquire about his Montreal past. For the moment, though, Ponzi refused to acknowledge it.
An hour after midnight, another Post reporter, Harold Wheeler, rushed to Lexington with a copy of the August 11 Post still warm and redolent