Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [59]
As May drew to a close and his bubble kept expanding, Ponzi faced a decision: Admit defeat and return what money he could; flee with Rose and a small fortune of a few hundred thousand dollars; or plant his feet and keep the ball rolling.
If flight or surrender crossed his mind, Ponzi refused to acknowledge it. His ambition to succeed was blinding, his superficial success intoxicating. “The average man is never satisfied with what he has,” Ponzi reflected. “He does not realize when he is well off. If he has a shirt, he wants two. If he is single, he wants a wife. If he is married, he wants a harem. . . . He is always reaching for the moon and stepping off into space.”
Publicly admitting that he had not been able to perfect the alchemy of coupons for cash would have carried too heavy a cost for him to bear. At the moment, authorities were only vaguely focused on him. But the large number of police who were Ponzi investors would surely lead to swift and severe punishment the moment they learned that some or all of their money was gone. He would suffer, too, a crushing loss of faith among his in-laws and perhaps even his wife. The Gneccos and the Donderos had poured their life savings and inheritances into the Securities Exchange Company—the depositor lists included eight Gneccos and ten Donderos. After the recent losses of Rose’s parents and the failure of Gnecco Brothers, it looked as though Ponzi would be their deliverance. He took what might be viewed as a tentative step toward flight by making plans to sail with Rose to Italy on July 1 to visit his mother, whom he had not seen for seventeen years. But there was little chance he would not return, if he took the trip at all.
“What was I going to do? Proclaim my insolvency and face prosecution, or keep up the bluff and trust to luck?” he wondered rhetorically. “I kept up the bluff, hoping that I might eventually hit upon some workable plan to pay all of my creditors in full.” Privately, he abandoned the self-sustaining fiction that postal reply coupons might yield millions and accepted the fact that he was redeeming his certificates with money derived from new investors. Robbing Peter to pay Paul. “Not only couldn’t I pay the promised 50 percent return,” he lamented, “but I couldn’t even refund the principal at more than seventy-five cents on the dollar.”
He consoled himself with a story of a spectacular failure by a fellow Italian that had turned into unparalleled success: “Four centuries before, Columbus had started out from Spain on what he thought was the western route to Asia and the East Indies. On the way over he had discovered America. He didn’t know it was there, and nobody else knew it, except the Indians. Yet, he ran smack right into it.” With characteristic self-aggrandizement, Ponzi assessed his attributes—determination, luck, and unlimited confidence in his ability to exploit both—and concluded that he was a spiritual heir to Columbus.
Once he decided to stick it out, Ponzi began making the most of his newfound status. A rented apartment in a two-family house in Somerville was no place for a budding Rockefeller and his lovely wife. So Ponzi began searching for a grand house to buy, ideally in a moneyed suburb like the society enclave of Cambridge or the bankers’ colony of Winchester. He had already bought himself a car, a cream-colored Hudson coupe, so the commute would be no bother. But he and Rose