Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [75]
Yet by the end of their talk, Hurwitz detected a note of condescension in Ponzi, a bit of cockiness he found less becoming. At one point, Hurwitz mildly challenged Ponzi, expressing doubt that it was possible to turn large-scale profits from postal coupons. Ponzi retorted that Boston police officers who had held similar doubts had grown so confident that they’d become frequent and successful investors. Ponzi then urged Hurwitz to deposit some of his own money, even offering a loan to get the assistant attorney general started in the business of 50 percent profits. Hurwitz declined, telling Ponzi he was investigating, not investing.
After Ponzi left, the three state officials and the banker agreed that Ponzi’s business certainly sounded plausible, though Albert Hurwitz and Joseph Allen remained skeptical. By contrast, the banker and Abbott, the other assistant attorney general, declared they were satisfied that Ponzi was a legitimate businessman, solvent, and on the level. Abbott was so persuaded that he proposed a bet: If their investigation showed that Ponzi was a fraud, Abbott would buy Hurwitz dinner. If Ponzi lived up to his claims, the meal was on Hurwitz. Unknown to Hurwitz, Abbott expressed his confidence to Ponzi, privately mentioning that he might drop by School Street with some money to invest.
A heat wave settled over Boston during the days after the State House meeting, but the sweltering temperatures did nothing to thin the ranks of men in suits and women in long dresses who lined up outside 27 School Street. Now that the Securities Exchange Company had passed the million-dollar-a-week mark, the only question seemed to be how long it would take for Ponzi to surpass two million a week.
Rising along with the mercury was the intensity of the bank commissioner’s investigation. Allen’s staff of bank examiners focused first on the banks where Ponzi maintained large accounts, particularly Tremont Trust and Hanover Trust. The two were also natural targets because in recent weeks Ponzi had often mentioned them as references to potential investors who questioned his solvency.
Ponzi had never gotten along well with Simon Swig, who ran Tremont Trust as its vice president and had installed his son as treasurer. Swig looked like a dour European aristocrat, with a thick mustache and a dimple in his square chin. He lived like one, too, in a palatial home on Humboldt Avenue in the city’s Roxbury section, with a live-in Irish maid and a chauffeur. Since arriving in Boston from Lithuania as a teenager in 1880, the fifty-four-year-old Swig had risen from a peddler to a wealthy bank officer. Along the way, he had alienated a large portion of the financial establishment by persuading state lawmakers to pass legislation that helped midsized banks like his compete with the entrenched financial powerhouses run by the Brahmins. At the same time, Swig had tended to ignore laws he did not like, for years making loans that were improper or downright illegal, running misleading advertisements in the newspapers, and issuing more than a half million dollars in loans, many of them dubious, to his own family. Swig’s house was a prime example. In December 1919, he took a twenty-five-thousand-dollar mortgage from Tremont, repaid ten thousand dollars from the bank’s own profits, and then never bothered to make payments on the remaining balance.
Ponzi thought Swig looked down on him because he was Italian, just as the Brahmins snubbed Swig because he was Jewish. “He was of the opinion that a Jew was better than a wop,” Ponzi said. “I could not agree with him. In my own mind, nothing could be better than a wop. Except two wops.” Some class-conscious Bostonians made no such distinctions, lumping Italians and Jews together as untouchables. “Whenever I gave the name of