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By Root 373 0

He had been so busy he had yet to read the morning papers. Ponzi picked up a copy of the Post and scanned Barron’s comments—the first public criticism of him and his company. He was outraged and, although he would not show it, afraid. He knew the disparaging words of a financial legend would goad public officials into immediate action, even overreaction. “The situation was especially dangerous,” Ponzi concluded, “because a man in public office generally runs amok the moment he becomes the target of printed criticism. Under the spur of what he believes to be a public opinion, he is apt to do almost anything. Except keep quiet.”

“Within the day, within the next hour or so, some proceedings might be instituted against me,” Ponzi told himself. “Without any doubt, I had a battle on my hands.” His biggest fear was a court injunction that would shut him down immediately, short-circuiting his plans to switch businesses and go straight. With his trademark flair, Ponzi decided to go on the offensive and do what his enemies least expected.

Ponzi reached for the phone in Chmielinski’s office and told the operator to call the United States district attorney, the Massachusetts attorney general, and the Suffolk County district attorney—the federal, state, and local authorities Ponzi considered his greatest threats. “Tell them I want to talk to them,” Ponzi said. “Give me the calls as they come in.”

First to answer was Dan Gallagher, the United States district attorney for Massachusetts. A graduate of Boston College, Gallagher was an undistinguished lawyer and local leader of the Knights of Columbus who had been appointed federal prosecutor by Woodrow Wilson. He was forty-seven, married with four children, with an impassive, doughy face and wavy light-brown hair parted in the middle.

After exchanging pleasantries and mentioning the Post story, Ponzi got down to business. “It occurs to me,” he said, “that it is rather unfair for them to criticize public officials for their alleged laxity. Personally, I resent the criticism because of its implications. I am going to demand a showdown. I am going to offer you and the other officials an opportunity to investigate my business. Would you be willing to join the attorney general and district attorney at a conference with me, in order that the details of such an investigation may be arranged?”

Gallagher immediately agreed—a target of inquiry inviting himself to a prosecutor’s office was about as common as a mouse chasing a cat. Ponzi got the same positive response from Boston’s county prosecutor, Suffolk District Attorney Joseph Pelletier, a friend and political ally of Gallagher’s. Judging from his past history, Pelletier’s most likely motive for agreeing to see Ponzi was to gauge whether he could squeeze money from the financier.

Pelletier was forty-eight, a lumbering ruin of a man, physically and morally. Like Gallagher, Pelletier was a Boston College grad—Pelletier had won the college debate prize a year before Gallagher did. Though his prosecutorial domain was limited to Boston and its surrounding suburbs, Pelletier occupied a small role on the national stage as supreme advocate of the Knights of Columbus. But Pelletier adhered to none of that organization’s high-minded ideals. He had grown thoroughly corrupt during his decade as district attorney. The price he charged to quash an indictment varied by the crime, but his real specialty was blackmail and extortion. His favorite fleece was the sexual entrapment con known as the badger game. A wealthy man, usually married, would be lured into a compromising position with a comely young woman in a hotel room, apartment, or taxicab. Just when things were getting interesting, another man would burst in and claim to be a policeman, the woman’s husband, her father, or a Justice Department agent, depending on which variation of the scheme had been decided upon. The wealthy pigeon would be informed that he faced public exposure, an alienation-of-affection suit, and criminal charges. He would be advised to hire a politically connected lawyer. That