Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [126]
Clerk Arthur Brown read the charges against Ponzi and reminded him that he had originally pleaded not guilty. Asked if he now wanted to change that plea, Ponzi remained silent. Standing behind him, Coakley whispered, “Yes.” The clerk persisted, asking Ponzi if he wanted to plead guilty or not guilty. Again Coakley prompted him, “Guilty.”
Ponzi seemed startled. But in a timorous voice, he said the word: “Guilty.”
Coakley dug deep into his rhetorical tool kit and made a plea for leniency. “It is very hard for him to stand in this court and admit it,” the lawyer began. “So he has asked me to present certain considerations to your honor. He had seven million dollars in banks that he could have got in half an hour. He had a passport for Italy and he could have taken a boat along with his seven million dollars. So, he said to me: ‘Would I, if I had any intent to defraud, and if I did not intend to pay my creditors, have acted as I did? Would I go to the United States district attorney and ask him to put an auditor on my books and also offer not to take any more money?’ He did that and he paid out the seven million dollars.”
“The auditor says that he is insolvent. It appears that because of poor investments and paying out millions to his creditors, the entire amount Ponzi gained was about twenty-five thousand dollars, or ordinary living expenses.”
Judge Clarence Hale interrupted: “Is there anything you can say that the court can conclude this was not a wild scheme?”
“I don’t believe the defendant considers it a wild scheme,” Coakley answered. “Ponzi absolutely believed that if he was not arrested that he would have paid dollar for dollar and be a millionaire standing here now. . . . He is not a malicious criminal. He is not a criminal of the stamp of 520 Percent Miller. . . . He paid out and today he has not got a dollar and his wife has not a dollar. You must not consider this case as that of a man who got seven million dollars and spent the money in riotous living.”
When Gallagher’s turn came, the prosecutor came down hard.
“He is a strange mixture of childishness and duplicity,” he declared before demanding a lengthy prison term. “He committed the government to the scheme which he must have known was fraudulent. The postal department regards this as the most flagrant case of its kind. Ponzi made the government an acquiescent observer of his scheme. And in view of the fact of the postal department, and widespread losses, I ask you to impose the maximum jail sentence.”
Judge Hale considered the opposing lawyers’ arguments and made a pronouncement of his own: “The court is impressed with much that Mr. Coakley has said. But the court has a great duty to perform to the public as well as to the person immediately before it. . . . Here was a man with all the duties of seeking large money. He concocted a scheme which, on his counsel’s admission, did defraud men and women. It will not do to have the world understand that such a scheme as that can be carried out through the United States’ instrumentality, without receiving substantial punishment.”
With that, Hale agreed with Gallagher and sentenced Ponzi to five years in prison. Rose fainted when she heard it, even though that was what Coakley had told her to expect. She was quickly revived, then fainted again. The judge’s one concession was to order Ponzi to serve the sentence in the Plymouth County Jail, near enough for him to assist in the bankruptcy proceedings and for his family to visit.
Rose cried softly. For what seemed like the first time in his life, Ponzi was silent. He sat deflated, shrunken, a little emperor without a shred of clothing. Before a marshal led Ponzi away, he scribbled a note on a legal pad. Reaching over the rail separating him from the crowd of spectators, he passed it to the clutch of reporters in the front row.
It read, “Sic transit gloria mundi.”