Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [51]
However he did it, by pleasing his original investors Ponzi sent the first pebble tumbling off a cliff. From that moment on, “Each satisfied customer became a self-appointed salesman. It was their combined salesmanship, and not my own, that put the thing over. I admit that I started a small snowball downhill. But it developed into an avalanche by itself.”
As Ponzi expected, most of his initial investors returned. In February, the Securities Exchange Company recorded $5,290 in new investments, from seventeen investors. The biggest sum came from the life savings of John S. Dondero, at forty-four a trim, square-jawed man with a well-tended mustache and a fondness for three-piece suits. Married to Rose Ponzi’s aunt Jennie, Dondero was therefore Ponzi’s uncle by marriage. On February 24, he handed Ponzi two thousand dollars, a year’s wages. Dondero had earned the money in a North End liquor business that had dried up with Prohibition. A few weeks later, Dondero’s cousin John A. Dondero entered Ponzi’s good graces by investing the same amount.
Ponzi claimed that after John S. Dondero’s two-thousand-dollar investment, he gave Sarti money for another trip to Italian post offices—though no one had ever seen Sarti except for Ponzi. If Ponzi did hand money to Sarti, he made sure he kept plenty on hand for himself. Three days after John S. Dondero trusted his money to the Securities Exchange Company, Ponzi returned to Uncle Ned’s. This time, Max Rosenberg noticed something different about his customer. Long eager to relive the sartorial splendor of his college days, Ponzi had decked himself out in a sharp new suit at the height of fashion. Rosenberg thought the undersized financier looked like a prosperous businessman straight from State Street, the heart of Boston’s financial district. Ponzi flashed a wad of big bills and peeled off a few to redeem Rose’s diamond rings, again urging Rosenberg to invest in his coupon business. But appearances meant little to Rosenberg. His world was concrete—loans made against collateral he could literally hold in his hand—while Ponzi dealt in the abstract. Once again the pawnbroker declined. Ponzi walked out of Uncle Ned’s door for the last time.
As pleased as she was to see her husband prospering, and as happy as she must have been to have her rings back, Rose was distracted from Ponzi’s growing success by the death of her father. After suffering in brief succession the losses of his wife and his business, John Gnecco had no fight left in him. He died on February 13, 1920, leaving Rose heartbroken but binding her even more closely to her husband of two years.
In the weeks that followed, Ponzi kept busy, talking about his business and taking care of himself and Rose. The death of Rose’s father also made him focus more on his own mother. On March 9 he wired ten thousand lire, worth about five hundred dollars, from the Tremont Trust bank to Imelde Ponzi in Italy. Five days later he sent the same amount in his own name to an account in an Italian bank. He began regularly sending similar small sums to his mother and his own accounts in Italy.
Word was spreading and business was growing—in March, 110 investors turned over nearly twenty-five thousand dollars to the