Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [7]
Outside the offices of this upstart Ponzi imitator, a large man in a Stetson hat was beckoning investors who had come to see Ponzi.
“Right this way!” cried the ballyhoo man. “A new million-dollar company!”
As Ponzi’s employees described the scene down the hall to him, Ponzi emptied his pockets, searching for a key to a strongbox that held receipts from the previous day. Large sums of ready cash might be needed to handle this Old Colony threat. Out of Ponzi’s pocket came loose cigarettes, several bunches of keys, and a roll of bills so fat it “would have made anyone but a bank teller gasp,” as one witness described it. After finding the strongbox key, Ponzi took a moment to consider the news of his competition.
As a mother bear knows its young by scent, Ponzi knew that the Old Colony operators were frauds and scam artists—though he could never say how he knew. Privately, Ponzi assessed the situation and reached a troubling conclusion: “They had me by the small of the neck, and the best that I could do was squirm.” Though he could not denounce them directly, he would sic his Pinkerton agents on them to dig up whatever dirt they could find. But that would take time.
In the meantime, he could at least scare them. Ponzi grabbed the black, candlestick-style telephone on his desk and asked the operator to connect him with the headquarters of the Boston Police Department. In recent months, Ponzi had made many friends on the force; by some estimates, nearly three-quarters of the department had invested with him. Low pay had long been a nettlesome issue among Boston police officers, and Ponzi’s investment offer was a welcome supplement to their paltry incomes. Indeed, the department was filled with newly hired officers, replacements for eleven hundred veteran policemen—more than two-thirds of the force—who were fired nine months earlier by Governor Coolidge for striking over wages and working conditions. Several patrolmen even moonlighted as agents for Ponzi, collecting investments from others for a cut of the take.
Ponzi could have called Captain Jeremiah Sullivan at Police Station No. 2, located around the corner from the Niles Building on City Hall Avenue. But instead he called headquarters to seek help from a fellow immigrant, Inspector Joseph Cavagnaro. The inspector had no trouble finding 27 School Street. He had invested nine hundred dollars on June 16, and then over the next four weeks had added $1,750 more. Providing for his wife and four daughters, aged eleven to eighteen, would be much easier when his notes began coming due in eight days.
Ponzi explained the situation, strongly suggesting that Old Colony was deceiving the public by making investors think they were trusting their money to a firm associated with Ponzi. That could be bad for business, and anything bad for business would be bad for investors like Cavagnaro. The inspector got the message. Ponzi hung up, turned on his heel, and headed out of his office and into the hallway. His anger rising, Ponzi steeled his resolve for a nose-to-chest confrontation with the oversized ballyhoo man.
Halfway down the hall, he caught sight of a tired-looking woman with a baby in her arms. Ponzi’s rage vanished. He brought his quick march to a halt. “Here, let me help you,” he said in Italian, their shared native tongue.
She explained that she had grown exhausted while waiting to collect $150 on a Ponzi note that had just come due. Ponzi took the note and gently asked her to wait a moment. He returned to the offices of the Securities Exchange Company and emerged a few minutes later, money in hand.
“Buona fortuna!” he told her as she walked away. “Good luck.”
She was swallowed up in