Ponzi's Scheme_ The True Story of a Financial Legend - Mitchell Zuckoff [77]
DOUBLES THE MONEY WITHIN THREE MONTHS
50 Per Cent Interest Paid in 45 Days by Ponzi—Has Thousands of Investors
Deals in International Coupons Taking Advantage of Low Rates of Exchange
A proposition fathered by Charles Ponzi, as head of the Securities Exchange Company at 27 School Street, where one may get 50 per cent in 45 days, 100 percent in 90 days, on any amount invested, is causing interest throughout Boston.
Yesterday his offices were crowded with people trying to loan him money on his personal note.
The proposition has been in operation for nine or ten months, rolling up great wealth for the man behind it and rolling up much money for the thousands of men and women who are tumbling over themselves to entrust him with their money on no other security than his personal note, and the authorities have not been able to discover a single illegal thing about it.
Ponzi, starting last October or November with hardly a “shoestring,” so to speak, is today rated as worth $8,500,000—purchaser of business blocks, trust companies, estates, and motor cars.
His investors—and they run the gamut of society, rich men and women, poor men and women, unknown and prominent—have seen their money doubled, trebled, quadrupled.
The story went on merrily from there, liberally and generously quoting Ponzi recounting the Horatio Alger version of his life, describing the vague outlines and enormous success of his business, marveling at his Lexington home, and detailing the acquiescence to date of federal, state, and local prosecutors. Unaware of the bank commissioner’s interest, the Post made no mention of Joseph C. Allen.
Everything in Ponzi’s life changed the moment the first newsboy tucked a stack of fresh-printed papers under his arm, stepped onto Washington Street, and yelled with his Boston accent, “Post heah!”
PART THREE
Bank Commissioner Joseph C. Allen
The Boston Globe
Attorney General J. Weston Allen
The Boston Globe
Financial journalist Clarence Barron
The Boston Globe
United States District Attorney Daniel J. Gallagher
The Boston Globe
Suffolk County District Attorney Joseph Pelletier
The Boston Globe
CHAPTER TWELVE
“MONEY MADNESS”
When the crowd drawn to 27 School Street by the Post story had gone home, Ponzi returned to Lexington to share the news of the day with Rose. There was plenty to tell. The phone was ringing ceaselessly with well-wishers and would-be investors hoping for a moment of the great man’s time.
Meanwhile, the reporters and editors at the Post were working well into the night preparing a story to run the next day, Sunday, July 25. The magnitude of what was happening around the corner from the newspaper’s offices had caught Grozier, Dunn, and their reporters off guard. For a journalist, the only things worse than being surprised are being scooped and being wrong, and the Post might soon experience both. The city’s other papers might be preparing follow-up stories of their own, and one might develop information significant enough about Ponzi’s operations, negative or positive, to wrest front-runner status from the Post. The clear goal for Grozier and Dunn was to remain in control of the Ponzi story without overreaching.
To strike that balance, the story in the Boston Sunday Post was built around a straightforward account of the excitement at the Securities Exchange Company on Saturday. It recounted the opening of the rival business down the hall that claimed to match Ponzi’s rate of return; the ballyhoo man trying to lure away Ponzi’s customers; Ponzi’s anger at his competitors; and the excitement of his investors. The headline, in the lead position on the top right side of the page, was more than twice the size of the one on Saturday:
PONZI HAS A RIVAL NEXT DOOR TO HIM
The headline spanned five of the eight columns across the top of page 1 and was accompanied by five photographs: