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After the film crew left, Ponzi, Rose, and Imelde went for a drive. As they passed by the Lynnway airfield, Ponzi had an inspiration: He wanted to fly. On a whim, Ponzi clambered into a biplane, hired pilot L. W. Tracy, and told him not to do anything tricky. Once they were airborne an exhilarated Ponzi changed his mind. Tracy jumped at the chance to strut his stuff, putting the plane into two loop-the-loops and an “Immelmann turn,” a daring half loop named for a German World War I ace. Tracy also executed a graceful maneuver called a “wingover.” It began like Ponzi’s business, with a dramatic heavenward climb. As the plane soared skyward, the engine stalled, and it seemed to hang motionless for a moment. Then it fell into a frightening nosedive.

But before they plummeted to the ground in a death spiral, the power returned. Tracy steered the plane onto its normal flight path, level with the ground. If only Ponzi could do the same with the Securities Exchange Company. He had experienced the climb and the stall; now he hoped to regain momentum and level things off without crashing. Ponzi enjoyed the trick so much he asked Tracy to do it again. A half hour later Ponzi returned to earth delighted. He paid Tracy thirty dollars, gave him a ten-dollar tip, and declared that he would return another day.

While Ponzi relaxed and took flight, the Post was preparing to publish its biggest and most damaging story yet on the case, from a source Ponzi had never suspected.

William McMasters had been suspicious of his new boss since the previous Monday, when he’d accompanied Ponzi to the meetings with investigators. Several times McMasters had thought he’d heard Ponzi contradict himself from one meeting to the next, as though the fast-talking financier was making it up as he went along. If Ponzi turned out to be a fraud, McMasters feared, his own credibility and career would go down in flames. He was forty-six, with a young wife and a seven-year-old daughter to support. His loyalty was to them, not Ponzi.

McMasters dusted off the skills he had used years earlier as a reporter for the Post, before he’d become a mouthpiece for Fitzgerald, Curley, Coolidge, and now Ponzi. He began nosing around the School Street office, searching for clues to determine whether it was a real investment house or a Peter-to-Paul scheme. By late Saturday he had reached his conclusion. He called Richard Grozier and offered the Post an inside look at Ponzi’s operations that would expose the man and his company as frauds. Grozier had been frustrated for days by the sight of Ponzi’s relentlessly smiling face staring out at him from the pages of his own newspaper, refusing to surrender quietly. Newspapers from around the country had picked up on the Ponzi story, and every day the Post was in danger of losing its lead position. McMasters’s account could be decisive; the Post would have an exclusive its competitors would kill for.

If what McMasters said was true, Grozier told the publicity man, the Post wanted the story and would pay dearly for it. Grozier offered McMasters the fabulous sum of five thousand dollars, with a thousand-dollar bonus if the story were borne out by later developments. The next day, McMasters drove to the Post building on Washington Street and went to work. The story ran the following morning, Monday, August 2, under a headline stripped across the top of page 1, each letter two inches tall:

DECLARES PONZI IS NOW HOPELESSLY INSOLVENT

The subhead explained:

Publicity Expert Employed by “Wizard” Says He Has Not Sufficient Funds to Meet His Notes—States He Has Sent No Money to Europe nor Received Money from Europe Recently

The story, under McMasters’s byline and copyrighted to prevent its immediate theft by the Post’s afternoon competitors, began with a self-congratulatory note: “After this edition of The Boston Post is on the street there will be no further mystery about Charles Ponzi. He is unbalanced on one subject: his financial operations. He thinks he is worth millions. He is hopelessly insolvent. Nobody will deny it after reading