Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [60]
Eventually they were steered to Lexington, a dozen miles northwest as the crow flies from 27 School Street. The town prided itself on the two-and-a-half-acre Lexington Battle Green, where the war for independence began with the “shot heard round the world” on April 19, 1775. Since then, Lexington had matured into understated affluence, a home for literary luminaries and comfortable business owners, dotted with stately homes on swaths of land.
Their focus swiftly became a vacant house on Slocum Road, a half mile from the town center. Built seven years earlier, the yellow stucco house had little in common with the white clapboard Colonials popular in town. Situated close to the quiet street, impressive without being overwhelming, the house featured a columned portico and wooden porch at the front entrance, flanked on one side by a round sunroom and on the other by an archway leading to a carport, beyond which was a quaint carriage house. Above the portico was a balcony with a low railing and a flagpole poking out like a ship’s prow. Dor-mers sat atop the slate roof, and the windows in the sunroom and the second-floor bedrooms were shielded by striped awnings that snapped and flapped in the spring breeze. The two-acre grounds had grown unruly from lack of care, but through an arbor to the left of the house were a tennis court and a stone fountain in fine shape.
When he first saw the house, Ponzi was unimpressed. “Oh, this won’t do,” he sniffed, preferring something more in keeping with his new status. But Rose was smitten. It had the makings of a real home, not a cloistered mansion. Ponzi relented and began negotiating the sale. The home had been built by Richard Engstrom and his wife, Anne, Swedish immigrants who had run into money troubles and had moved out the previous October. The Engstroms had spent between forty and fifty thousand dollars on the house, but the best offer they had received to date was twenty-five thousand, which they had flatly rejected. The Engstroms had never heard of Ponzi—not surprising, considering the absence of publicity for his business and the lack of branches in affluent towns like Lexington. But their lawyer, J. C. Thompson, told the Engstroms that the new bidder for the house was a good prospect who had made “barrels of money.”
Ponzi craved acceptance as much as he loved making deals. He tried to do both with the purchase of the house. He twice invited Richard Engstrom and his lawyer to dinner at the Copley Plaza Hotel and the Boston City Club. Engstrom was not interested. Rebuffed, Ponzi began playing hardball, offering twenty-five thousand dollars, the same amount Engstrom had already rejected. When Engstrom said no, Ponzi raised his offer to twenty-nine thousand. Knowing how much Rose wanted the place, he allowed himself to be pushed up to thirty-nine thousand, but on one condition: the seller would have to become an investor in the Securities Exchange Company.
When they passed the papers on May 28, Ponzi paid for the house with nine thousand dollars in cash plus an orange-colored Securities Exchange Company certificate for twenty thousand dollars, payable as thirty thousand dollars on July 12. Engstrom’s lawyer was worried. For security, he persuaded Ponzi to put up a thirty-thousand-dollar certificate of deposit at the Tremont Trust Company, payable to Engstrom in case of a problem with the Securities Exchange Company certificate.
The Ponzis moved into the Copley Plaza for several weeks while Rose and a decorator went gaily and expensively to work making the house a showplace. Visitors walking up the front path might see gardener Cornelius Palmer trimming the hedges and turning the lawn into an expanse of green velvet. Inside, Palmer’s wife, Teresa, the Ponzi family cook, would be busily preparing Italian delicacies. A tall, proper butler would open the heavy mahogany door, leading the way into a large foyer with hardwood floors covered by