Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [132]
For six weeks, the all-male jury—a leather sorter, a rubber worker, an engineer, and assorted other workingmen—heard the extraordinary story of Ponzi and the Securities Exchange Company. To hedge their bets, the prosecutors decided to try Ponzi on only a dozen of the indictments against him, six for larceny, five for being an accessory before the fact to larceny, and one for conspiracy to commit larceny. Among the star witnesses were disbarred lawyer Dan Coakley and Ponzi’s former bookkeeper Lucy Meli. Ponzi gently guided her through an account that roamed from their early days in the School Street office to the chaos of August 1920. Meli had faced some legal threats as well, but they had been dropped after it became clear that she had suffered investment losses of her own as a result of her blind faith in Ponzi.
Rose took the stand at one point, weeping as she told her version of the meteoric rise and fall. Ponzi testified in his own defense, regaling the jury with his life story and insisting that he had done just what he had advertised, trading in International Reply Coupons purchased in Europe by his agent Lionello Sarti. Under questioning he acknowledged that he had no proof, claiming that he had destroyed all correspondence with Sarti. One of Ponzi’s investors, Carmela Ottavi, was called to the stand by prosecutors but ended up benefiting Ponzi. During Ponzi’s cross-examination, she declared firmly that she still believed in him, despite her losses. He thanked her.
By the end of the trial, the jury was sold. Ponzi and his co-defendants were all found innocent. When the foreman called out the final “not guilty,” Ponzi bowed his head and began to sob. Rose rushed to him and threw her arms around his neck. Together they wept for joy. Massachusetts officials dropped the cases against his agents, but they were not finished with Ponzi—with the Post egging them on, prosecutors immediately began making plans for trial on the remaining ten indictments.
In the meantime, Ponzi was returned to the Plymouth jail to complete his federal sentence. While there, he faced surgery at Massachusetts General Hospital for the painful ulcers that had tormented him for years. Doctors warned him that he might not survive, so he sat in his cell and wrote Rose a passionate letter to be opened only in case of his death. “I do hope that I may live,” he wrote, “because as long as I have you, life seems sweet regardless of our present sorrows. . . . I am leaving you forever, but I am bringing with me a most wonderful recollection of your wonderful self, and I am leaving with you kisses of lips which will close with your name firmly impressed upon them, and with a smile of eternal love for you.” Ponzi survived the surgery, and Rose eventually opened the letter. She saved it among her treasures, along with several dozen other letters he wrote to her over the years.
Though Ponzi’s health improved after the surgery, even more trouble lay ahead.
In August 1924, Ponzi was released from the Plymouth jail, having served nearly four years of his five-year federal sentence, with the remainder waived for good behavior. He spent several months as a free man, enjoying his reunion with Rose. But by November, the state had him back on trial, this time on five of the remaining indictments. Once again Ponzi acted capably as his own lawyer, and the case ended with the jury hopelessly deadlocked. Still the state was not finished. A third trial on state charges was held in February 1925, and Ponzi’s luck ran out. The state prosecutors had learned from their errors at the earlier