The Man, The Myth, The Scheme: The Financial Fraud Empire of Charles Ponzi

We are taking a wild ride back to the 1920s to meet the man whose name is now synonymous with financial fraud: Charles Ponzi. Born Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, he was an ambitious Italian immigrant who arrived in America and turned a simple idea into a record-breaking financial deception.

• The International Reply Coupon (IRC): Ponzi's scheme was deceptively simple, and he based it on an obscure piece of international mail: the International Reply Coupon (IRC). Ponzi claimed he could buy these coupons cheaply in foreign countries and redeem them for higher-value stamps in the United States, exploiting the difference in currency exchange rates.

• The Promise: Ponzi guaranteed his investors an impossible 50% return in just 45 days, or 100% in 90 days. Because early investors were paid off using money from new investors—the definition of a Ponzi scheme—his operation appeared wildly successful, drawing in massive crowds of eager Boston investors.

• The Collapse: At the height of his operation in 1920, Ponzi was bringing in over $250,000 per day. However, a financial review revealed that he needed over 160 million IRCs to cover the outstanding certificates, when, in reality, there were only about 27,000 in existence.

• The Aftermath: The scheme collapsed, devastating thousands of investors, many of whom lost their life savings. The resulting panic in Boston was one of the worst financial meltdowns of the era, and it cemented Charles Ponzi's name in the lexicon of global crime.

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TRANSCRIPT:

[00:00:00] He turned postage stamps into promises and broke records for how fast you can set money on fire. Today we're taking a wild ride through the life of one of history's most infamous scammers. I'm talking about the man whose name is now shorthand for You're probably gonna lose all your money. A man who could sell swamp land in Florida and actually did.

The Man is Charles Ponzi.

Hey guys, and welcome to the Moms and Mysteries podcast. A True Crime Podcast featuring myself, Mandy, and my dear friend Melissa. Hi Melissa. Hi Mandy. How are you? I am doing well. We are getting ready for Crime Con here in about, I don't even know how many weeks I'm trying to, uh. I'm trying to do the math in my head right now.

Yeah, but only about three weeks. Uh, yeah. Oh gosh. So we are super excited for that. Crime Con is, uh, in Denver this year. If you have heard us talking about it, then you obviously already know that, but we would love to see you all [00:01:00] there. So if anybody is been on the fence and was thinking about going to Crime Con but maybe hasn't, uh, taken that leap and bought their ticket yet, you can still get your standard badge, uh, for 10% off if you use R Code moms.

So check that out and we hope to see you guys there. Yay. So let's get into the story for this week. I am super excited to talk about this one. Melissa. You know, this is a case I've been saying like we should cover the Charles Ponzi story. Um, I've been saying it forever and just, yeah, I have been lazy and not gotten around to actually looking into it until now, and I'm so glad that I finally did it because this story is really something.

Did you know much about the Charles Ponzi story or did you just know what a Ponzi scheme was? I knew what a Ponzi scheme was and never bothered to look into it. Same. So I can't really judge you there. Uh, so Well, thank you. I appreciate that. So, born with a name that sounds like an Italian opera. Carlo Pietro.

Giovanni Gu Elmo, [00:02:00] Aldo Ponzi. That's a lot that is. But this charming con man pulled off one of the boldest financial frauds the world had ever seen. His name truly lives on an infamy, and that is honestly probably his proudest legacy. This isn't just a boring history lesson today, though, we are actually talking.

Ambition lies, dollar signs everywhere, and dollar the kind of misplaced confidence that only a broke man with a dream could possibly conjure up. So, buckle up. We're going all the way back to the beginning where it all started. Not in a Wall Street boardroom like you might think, but actually in the dusty hills of Italy.

Charles Ponzi was born on March 3rd, 1882, and depending on who you ask, he either came from Parma or Lugo, Italy. Ponzi himself told the New York Times that he was from Parma, so we'll just go with that. His family was once very wealthy, but by the time Little Carlo came around, their fortune had dried up.

But his mom still kind of [00:03:00] clung to that distinguished woman energy, and she kept her fancy title of Donna even when the bank account said otherwise. Now, Charles had a few jobs early on, including one as a postal worker, which is actually kind of hilarious in hindsight, as you'll see as we get into it.

But eventually. He ended up at the University of Rome and that sounds very prestigious and you know, yeah, like he must have been a, a real genius. But it wasn't because he was a scholar, it was just because he needed something to do while he was kind of swindling away his family's last few dollars in bars and opera houses.

Imagine just being like, I need to do something. I'm kind of bored. Let me just go to school. I guess, I mean, I wish more dont have that kind of drive. Right, exactly. No. I'm like, I can just spend more money doing other things. Yeah. Well, he didn't, but good for him, I guess. True. So he didn't take it very seriously though.

He called it a four year vacation, and no surprise he left without a degree. But Ponzi still held that classic American [00:04:00] dream. He kept hearing stories about these Italian immigrants who would make it big in the US and with his mom kind of pushing him out the door at this point. Like, please go somewhere else and be rich.

He set Sail for America. On November 15th, 1903, he arrived in Boston on the SS Vancouver and in what might be his most honest quote ever, he told a reporter I landed in this country with $2 and 50 cents in cash and $1 million in hopes. I mean, same. Yeah, I would. I would love that. But we're about the same on that $2 and 50 cents right now.

I don't know what the equivalent is, but I see. I see it, Charles. Yeah, for sure. Those hopes, unfortunately, did not turn into a paycheck for him anytime soon. Charles learned English really fast and started working odd jobs. He was a dishwasher, then a waiter, but then he got fired for stealing from customers, which is a real Charles Ponzi classic, as you'll soon find out.

So in [00:05:00] 1907, Charles headed north to Montreal thinking that maybe Canada would be the vibe. He got a job at Bonko Zai, a bank that catered to Italian immigrants, and that's actually where he got his first taste of financial fraud. It was kind of like a twisted mentorship program. So the bank was offering 6% interest, which was actually double the norm and for a while.

It really looked like a smashing success, but the surprise is they weren't making legit profits. They were paying old investors with money from new ones. And at this point, it should sound familiar that Ponzi schemes may have had a different name, but they've kind of always been around. So eventually the bank tanked and the owner actually fled to Mexico with people's savings.

Charles Ponzi actually stuck around, and he even stayed in his boss's old house for a bit, but eventually he got desperate. He ended up forging a check and he got caught because of course he [00:06:00] did, and he ended up in prison. Fun fact, his mom knew he was in prison, but she actually thought he was working as a warden.

In reality, he was Inmate number 6, 6 6 0, which. Okay. Okay, Charles. But I love that he's like, I'm just working at the prison. Don't worry, I'll send you money, Donna, uh, for Miss Donna for your stuff. But he's like actually just sitting in prison and coming up with this next scheme. We can only assume. So after three years in a Canadian prison and still somehow managing to send his mom fake job updates, like he was on LinkedIn and this was just, you know, the boom.

Charles was actually released in 1911. So you'd think that maybe enough prison time would scare someone straight, but not for Charles fresh out and full of not je quois, we'll call it confidence. He [00:07:00] immediately jumps into another sketchy venture and that smuggling Italian immigrants across the US border.

Not exactly that fresh start that you'd hoped for, but Charles wasn't exactly big on learning from mistakes. Naturally though he gets caught again and he sentenced to another two years. This time though, in hot Atlanta. Now here's where things get extra spicy. While in Atlanta, Charles worked as a translator for the prison warden, and this job gives him access to all kinds of inmate correspondence, including letters from a, a notorious mobster named Ignacio the Wolf Lupo, which.

Sounds like a Batman villain, but that was his, I wouldn't say it was his God-given name, but it was his name. That's his call sign. Yeah. There you go. So Charles managed to cozy up to the wolf, but even more importantly, he crossed paths with another inmate who would become his personal fraud inspiration, if you will.

And that's Charles W. [00:08:00] Morse. So Morse was a wealthy Wall Street swindler who. Get this faked being deathly ill to get an early release from prison. So imagine watching that from your bunk and thinking, huh, good idea. I'm gonna, I'm gonna put that in the back of my head for later. So it was like a crash course in manipulation 1 0 1, and Charles took mental notes after that sentence.

He was finally back in Boston, and despite the multiple felonies on his record, Charles was still out there trying to make his American dream happen. So he bounced around from job to job. He worked as a nurse at a mining camp, which that doesn't that feel, feel like Mad Libs nurse at a mining camp. Yeah. I don't get it.

I don't get it. And I also am like, were you a nurse? I don't think you were right. No, he, that's a weird pon scheme. Didn't leave college with a degree. I don't understand how, oh, I forgot the nursing job. I mean, it's in a mining camp. They're probably like anyone [00:09:00] that's just going to apply, I guess. Come on in.

Right. But he also dreamed up a utility company and even had one weirdly touching moment. Very weird. Touching when we get into it. He donated, I don't know how this works, 122 square inches of his own skin to help save a badly burned nurse named Pearl Goed. What gave her like a skin? Did he take it off of himself?

I have never heard of that. Of his own skin. Skin. Maybe I'm crazy. Skin graft skin. I mean, I've heard of skin grafting. Yeah, but usually it's your own, it comes from your own body. Yeah. Like they take it off your butt and put it on your elbow or something. Right. This is ugh I to, so I wouldn't wanna wear Charles Ponzi skin, but in the 19 hundreds, I guess I just wouldn't think that would be possible then.

Right, right. It seems a very, like a very extensive procedure for the time Uhhuh and it's probably really the only time he [00:10:00] wasn't trying to swindle someone and of course not swindling someone almost. Killed him literally because he developed PL from this procedure and ended up jobless again. I would love, love to know.

Why he did this, like who Pearl was to him, because it seems like there had to be something. I don't feel like he does anything outta the goodness of his heart. No. Yeah, there's definitely gotta be more of a story there. Yeah. And we will get into so much more in this story after a quick break to hear.

We're from this week's sponsors and we are back so far in our story. Charles Ponzi has managed to flunk outta college, lie to his mom from prison and learn the art of the con from both mobsters and Wall Street scammers. All before turning 30. He's been fired for theft, arrested for forgery, and he somehow thinks his big break is just still right around the corner, but just when you think his life couldn't get any more chaotic, enter Rose Maria Neko.

A Boston [00:11:00] stenographer who must have really been patient and wildly optimistic because she met and fell in love with Charles Ponzi, and in 1918, the two of them got married. It's kind of sweet until you remember. She's about to unknowingly become the first lady of financial fraud. So married life didn't magically turn Charles into a model citizen.

He was still bouncing between odd jobs, including one at his father-in-law's grocery store, and he was still desperately chasing that big, big break and wouldn't you know it, he found it sort of that aha moment came in the form of what sounds like the world's least exciting object. An international reply coupon or an IRC, which sounds boring, outdated, and was truly not something I even really knew I know much about.

But to Charles Ponzi, this was pure liquid gold to him. So here's how IRCs worked. Let's say someone in Spain wants to mail a letter to the US but they don't want the American recipient to have to pay for return [00:12:00] postage. So they would include an IRC with the letter and the recipient could exchange it for US stamps of equivalent value.

So this is like simple, convenient, very 19 hundreds. Uh, but Ponzi was like, mm-hmm this right here, this is how I'm gonna make it big. So thanks to post World War I inflation, the exchange rates between countries were an absolute mess, and that meant someone could buy IRCs super cheap in one country and then redeem them in the US for way more in postage.

Postage is money. So this. Really is what's known as arbitrage or buying an asset where it's cheaper, and then, uh, selling it in a location where it's more expensive. This is technically legal, super duper clever, and for once wasn't really an outright crime for Charles Ponzi to be doing this. At least not yet.

Not at this stage, but if you're wondering if the plan actually worked, the answer is yeah, maybe a little bit in theory. It really could net a nice profit. Some sources claim Ponzi was getting over 400% [00:13:00] returns on these coupon exchanges, but the logistics are an absolute nightmare, and there's no real way to scale it without this massive upfront investment.

So what did our friend Charles Ponzi do? He sold the dream. If there's one thing he's good at. One thing he can do better than pretty much anyone. It's to convince people that he's cracked the code to making easy money. This is unreal. So you have to assume that people just cannot freaking wait to mail something to someone to really make this work.

Like, and I understand that at the time, obviously that's the way people are communicating and, and things are going, but it is kind of wild to be like, I am going to like the, the. Way at which he goes about this, it, it, it blows my mind. Yeah. Like he really did have something special in his personality.

Right. And about himself to make this work. It's true. Yeah. It really is true. So as it turned out, you know, his promises were really unworkable, just. You know, he just, it wasn't gonna work. Like you said, you, you're depending [00:14:00] on a lot of factors that don't really make a lot of sense and aren't likely, but to service just his first 18 investors who put in around $1,800 total, Charles would've needed something like 53,000 postal coupons.

Like you're saying, like it's not logical. Um, it's not really feasible in reality. It's like on paper is one thing, but like in practice. It's not really, it's not dual. It's kind of like buying a bunch of, uh, remember when Forever Stamps first came out? Yeah. And people like, especially, uh, maybe the older community got really obsessed and like bought a ton of them, but I think people really thought they would be saving like millions of dollars by this time.

And it feels like that's kind of right in a way, sort of what he is selling. Like, yeah, you, you're gonna save a few cents, but. Not as much as like, not enough for the upfront investment. Right. Yeah. It just, it doesn't make a lot of sense. Um, and like I said, with only 18 investors, he would need like, you know, tens of thousands of postal [00:15:00] coupons.

But as this operation scales to like. Hundreds and thousands of investors, he would've needed what they said in one, uh, one source, Titanic sized ships. Unreal to be able to transport enough IRCs to make good on those returns. So clearly it wasn't just like improbable. This is like now becoming physically impossible to actually do.

Oh my gosh. So by December, 1919, Charles set up his shop, which literally he has a shop under the very legit sounding name, securities exchange company. Mandy, this sounds like one of those things where you get a text message and you know that's like totally wild and you're like, what is this? But it kind of sounds legit, but you're like, I don't really know.

I didn't like the toll. The toll, uh, things that you get now I get those all the time. You mean like the emails we get sometimes on the podcast where they're like, we can help your podcast make $1 million next a month or whatever, and we're like, yeah, okay. They'll send seven emails in a row where they're finally [00:16:00] like, just say yes if you want this.

And I just reply, no, no. Um, can I tell you something very funny? I did this week and I think I. It's a suggestion for people. If you get a lot of like spam texts, like I get the ones sometimes that are just like, Hey, how are you? Or good to see you like, and you know you don't know the person, right? Well, they caught me on a bad day and I literally said, you caught me on a bad day.

'cause I was like, I'm about to take out my wrath on this person. They wrote back like, well, oh, I'm sorry. What's wrong? And then like, I literally listed things in my life that were wrong, like just one of those days. And the person literally wrote me back and said, I'll be praying for you, and didn't write me again.

Oh my God. Like I cracked the code. I cannot believe I got a scammer to be like, we can't mess with her. Her look at what's going on.

So that's the trick though, that maybe that everybody just, my gosh, needs to tell them like, uh, tell them the truth. Tell them truth. I was like, this is the cheapest therapy ever. I [00:17:00] just tell them all my problems and literally said, we'll, pray for, I'll pray for you. And I was like, thank you. I was both proud and like really sad with how the state of affairs in my life.

So anyway, the name Securities Exchange Company gives the impression of like Wall Street vibes, but it's basically just Charles. A desk and a very ambitious mustache. So here is the pitch. Invest your money with Charles. You get 50% return in 45 days, or you can wait the whole 90 days and he double your money.

This was really unheard of at the time, and actually it's still unheard of because it's not a real thing that's actually gonna work.

But Charles's confidence was magnetic. He's charming, he's well dressed, and he made it sound like he was doing some kind of fancy international finance wizardry and like I can see. Thinking like, oh, this is a thing. He has a desk. He has an [00:18:00] office. People are literally lining up. That's all it takes to convince you.

You're like, he has a desk, he has an office. I know I should have asked the scammer, are you writing this from a desk? And then I would've been like, great, what do you need from me? So people are lining up. By early 19, 20, the word was out. And everyday people are actually flooding into his tiny little office with bags of cash.

And we're not talking like. Wall Street investors, people in suits, things like that. We're talking housewives and factory workers, and people cashing out their savings or even pawning their wedding rings, and they're all chasing the same dream, which is fast, easy money. But Mandy, here's the kicker. He wasn't actually using the money to buy IRCs Way.

I know you, you're surprised way. That was just the cover story. But what he was doing was the exact same thing he saw at Bonko Za Rossi, which was taking money from new investors to pay off old ones. So it's like this [00:19:00] financial hamster wheel that's just spinning faster and faster, but he cannot get off of.

And his plan worked at least for a while. And by mid 1920, Charles was pulling in. An unbelievable amount of money that I would've never guessed. $250,000 a day in 1920. In 1920, and we're talking cash. We're talking cash, money records. We're talking like actual physical bills because that's what they're having to use, and I just cannot even imagine.

Can't, that isn't terrifying. Everyone knows where your freaking office is. I'd be afraid if it's gonna be robbed all the time. With this money, Charles buys a mansion in Lexington, Massachusetts, complete with air conditioning and a heated pool, which were both basically science fiction. In 1920, he wore custom suits, he drove fancy cars, and he had a whole staff to help him count the cash, which came [00:20:00] in by the sack.

I, I don't know that we've ever covered anyone rich enough to hire people to count their money. No. Unreal. So at his peak, he lived in a 12 room mansion in Lexington. He hired servants. He drove a custom limousine and he owned gold, handled walking canes and a macaroni and wine company. Okay. Very Italian.

Uh, Charles even brought his mother over in first class to show off his success, and then he promised a $100,000 donation to an Italian children's home. Her honor, that's where I'm like, you're going too far. Like you are going to lose some of this money. You're not gonna have money counters forever. I don't believe you.

Like his mom should have known. Yeah. Like I raised you. Right. You're not gonna do this. I know who you are. Yeah, exactly. There were accounts that he literally kept millions of dollars in overflowing, basically trash cans at his office. And at one point, Boston cops had to disperse the crowds that were waiting [00:21:00] outside and.

Charles even went full Costco and started handing out hot dogs and coffee to people just to calm them down. I was like, you imagine hot dogs, right? I have millions of dollars in here. Please do not hurt me, rob me or anything. I'll give you a hot dog. Yeah, here's a hot dog. And also give your money, get back in line, right?

You have your hot dog nugget in line, but a hot dog and coffee together sounds ew. Absolutely miserable. But. That's just me. But people really adored Charles Ponzi. He was kind of like this Robinhood and pinstripes, except that he kept all of the money he wouldn't get, in which case he's not like Robinhood at all.

Um, but investors would like give him their money and shake his hand, and they were thanking him. He would be somebody that would go out and tip extravagantly, he gave to charity, and he even pays. Paid off of some of his wife rose's family's debts. So he wasn't just selling this scheme, he was selling hope, which I think is like the most dangerous thing you can sell, right?[00:22:00] 

Mitchell Zuckoff, who wrote the fantastic book Ponzi scheme, even suggests that at the heart of it all, Charles wasn't just chasing money, he was trying to make his wife Rose proud, which is. Kind of swes, um, but also kind of terrible that he, uh, literally had people selling their wedding rings knowing they were never gonna get their money back.

But of course, none of it's real, and it's only a matter of time before the wheels fully come off. So everything seemed perfect and it was almost too perfect, which if true crime or just living your everyday life has taught us anything, it's that something that sounds too good to be true. Absolutely is a hundred percent.

And that's when we see the Boston Post come into the picture. So in the summer of 1920, there were a few skeptical voices that started poking holes in Charles' story, and people around town were whispering things like, Hey, how exactly is this man making all this money? But instead of [00:23:00] giving a logical explanation, Charles just responded with vague answers and kind of waved his hand about, you know, like, oh, you wouldn't understand.

This is very complicated, international finance business, foreign stuff, postage. Like, there's no way you're gonna understand any of this. So the Boston Post sent a reporter to dig around and look into it. Now, if this were a movie, this is a part where the camera would like slowly zoom in and the music turns ominous.

And Charles Ponzi starts like sweating through his collar because they're really closing in on him. And he eventually sued a Boston financial writer for libel and won $500,000 in damages because they were really like onto him and like starting to point fingers. Say things about him. So at the time, Massachusetts libel law forced the writer to prove ponzis claims were false.

And that kind of effectively silenced the critics, like even while he's still running a scam, because the law says like, unless you have proof of this, like solid proof, you can't write about it. You can't slander this man's name. So one of the first red flags though, was that no one could [00:24:00] confirm that these IRCs even existed in these large quantities that Ponzi claimed.

In fact, when reporters contacted the US Postal Service to ask how many international reply coupons were even in circulation, the number was shockingly low, and it was nowhere enough to support Ponzis alleged operations. Definitely not enough to explain how he was promising millions of dollars in returns, right?

And then came to Avalanche. A former financial journalist named Clarence Barron did a full deep dive into Charles Ponzis books and realized something shocking. Ponzi wasn't investing the money at all. He wasn't doing anything with it except moving it around kind of the old Rob Peter to pay Paul thing.

So what was even worse is that it was discovered that while Charles was raking in millions from the public, he wasn't investing a single dime of his own money into the company. And that doesn't really exactly spark confidence. No. So at this point, people started getting a really uneasy feeling in their [00:25:00] guts.

They had that itchy little, oh no. Like voice starting to whisper, and they're kind of starting to think like, Hey, maybe Charles isn't really a genius. Maybe we've been had, maybe. And then just like that, the whole stampede began. Uh, as the Boston Post kept printing stories, investors started panicking more and more.

What had once been aligned to give Ponzi money quickly flipped into a frenzy to get it back. They were like owed. This is terrible. So people were showing up outside his office in mobs. They were, they had receipts in their hands. They're demanding their cash investments back. They want it back in cash and they want it now.

It was literally like a, it's my money and I want it now. Right. Real life situation. Um, kind of like Black Friday meets Wall Street, but with a lot more crying. Although, I don't know. Black Friday does get a little wild these days. Not anymore. I don't think it's that exciting. No, no. Bring back chaos. Bring back, tickle me, Elmo.

Those were the days for sure. Now to his credit, Charles did try to hold it together. He [00:26:00] even paid some people back early to keep up appearances. But of course, there's only so long you can juggle flaming swords before something catches on fire and it was about to all burn down. And we're gonna get into the rest of this story after one last break to hear a word from this week's sponsors.

So before the break, Charles Ponzi has found his golden goose in something that sounds just about as exciting as waiting for water to boil, and that's international reply coupons or IRCs. He spun a boring little postage loophole into a full blown empire promising investors double their money in just 90 days, and people actually believed him.

Like by the thousands, and he wasn't just cashing checks, he was living large. We're talking mansions, limos, people who actually counted money for him and literal sacks of money that were piling up in the office for a minute there, Charles Ponzi looked like a financial genius, but as we're about to see that glossy empire, it was really built on air and [00:27:00] it wouldn't take long for someone to come along and pop the whole thing.

On August 11th, 1920, federal agents raided Ponzis offices. The very next day, Charles Ponzi was arrested and charged with 86 counts of mail fraud. And if there's anything I've learned in true crime, mail fraud is like one of the worst things you can do is somehow, it's like the worst of the worst. They take it very seriously, very, you don't mess with the postal service.

So at the time of his arrest, Charles Ponzi owed his investors around $7 million. And remember, this is 1920s money adjusted for inflation. We're talking well over a hundred million dollars today. I, I can't even imagine that amount of money. It's just so, it just doesn't ever seem real. When I hear large amounts of money like that, I can't even picture it.

Like I can't imagine what it that much money is even like. No, uh, not at all. Like, it doesn't make any sense to me, but all this money just evaporated into the ether of his charm and his empty [00:28:00] promises, and basically he's facing this avalanche of evidence. And Charles Ponzi ends up pleading guilty. He serves three and a half years of his federal sentence, but.

Don't think the story ends there. As soon as he finishes that stretch, Massachusetts shows up and the state charges him with 22 counts of larceny. He was sentenced to an additional nine years in prison with these cases of larceny. I actually cannot believe you can steal a hundred million dollars and go to prison for three years.

No, that's not a good lesson to learn, right? I maybe we've started handing down harsher sentences, this's stuff since then. Let's so, yeah, let's hope so. But by the time he got out in 1934, the world had changed. Charles was broke and his reputation was beyond ruined. First of all, his wife Rose, had actually divorced him in 1937, and if you've been paying attention, you know that she was really the motivating factor behind most of his mischief.

No more money, [00:29:00] no more marriage, no more mansion, just. Charles Ponzi alone and unemployed. But between prison time and his eventual deportation, Ponzi had just one more con in him. This time. In 1925, Charles Ponzi took his talents to the Sunshine State, right in the middle of the infamous Florida Lambo. At the time, everyone in their cousin was buying up property down here.

Convinced they were getting in early on. The next big thing, Charles Ponzi launched the Charin Land Syndicate, which sounds about as real as his last business. And he claimed to be selling valuable land near the booming city of Jacksonville. But what was he actually selling? Swamp land. Literal swamp land.

Most of it completely underwater. But he told the investors they double their money in 60 days. And because this is America. And maybe he had hot dogs. People believed him. He raised around $7,000 before state authorities started sniffing around, and that's when [00:30:00] Ponzi decided it was time for his most dramatic stunt.

Yet he faked his own death. Yep. He left his clothes in a farewell note on a beach like he'd walked into the ocean to his doom. What Charles really did was he shaved his head. He used the alias Charles Borelli and boarded a merchant steamship as a dishwasher, which definitely feels like a real downgrade from gold handled canes and mansion life.

Unfortunately for Charles, he just couldn't keep his mouth shut and he confessed his real identity to another crew member before the ship could even leave. Port Federal agents swooped in and arrested him once again. At this point though, you have to wonder if he just enjoyed getting caught. He's pretty much been busted on every single con he's run.

After prison. The US really just had enough of this guy and they shipped him right back to Italy before he was deported. He told reporters, I went looking for trouble and I got it more than I expected. And you would think that [00:31:00] would be the end of it entirely, but it wasn't because. Even then, even after serving time and after the feds and the state and his wife had all cut him loose, Charles still tried to scam again.

I wonder what his teachers thought about him. Like did they vote him like most likely to succeed, most likely to scam, like, because he has tenacity. He really does have that. I don't know that mixed with he's, he deserves a few supportives. Uh, yeah. A lot of 'em, you're right. So in Italy he bounced around doing really odd jobs, and eventually he wound up in Brazil and in classic Charles Ponzi fashion, he tried to reinvent himself as an aviation promoter, which, uh, when I heard aviation, it kind of gave me the same vibes as nurse, uh, that he, the job job he had as a nurse at one point.

So I was like, where is he getting all these credentials? Like he doesn't know how to do any of this stuff. Yet here he is. So he went from postage stamps to airplanes and yeah, if nothing else, he really had range. But shocker, none of those schemes worked. And eventually the scams stopped [00:32:00] and so did the money.

He spent his final years in poverty, living alone in a hospital charity ward in Rio de Janeiro. When he died on January 18th, 1949, at the age of 66, he was flat broke and basically had been forgotten, which was of course a far cry from the man who once raked in millions and wore silk suits while tossing a hundred dollars bills around like confetti.

And yet, Charles Ponzis legacy still lives on, not because he was our hero, not because he changed the world in a meaningful way, but because his name is now literally synonymous with fraud. The Ponzi scheme, which is just. How we explain someone using new investors money to pay off earlier investors while still pretending this is all, you know, legitimate profit.

Um, this has been replicated thousands and thousands of times since then. It's been dressed up in different outfits, MLM, crypto scams, shady investment groups, even retirement funds. But at the core of it, it's all still just classic. [00:33:00] Ponzi schemes and sure. Charles Ponzi didn't exactly invent this concept.

Uh, remember our guy, za Rossi from the Montreal Bank that he worked for? Well, he was running nearly an identical scam before Charles Ponzi ever set foot in Canada. But Charles was the one who really took it big and made it famous, and he really put his branding on it. Maybe that is what makes him so fascinating because he wasn't really a mastermind or a genius.

He was just a broke immigrant with a quick smile and a really fast mouth who figured out that people wanted to believe in things like fast wealth and shortcuts and magic money still do So for a little while we still do, we still, and people still buy into these types, types of things Totally. Mm-hmm.

For the same exact reasons. That's what Charles Ponzi was selling. He was offering that, and he gave them that for a very little while until he couldn't do it anymore. So yeah, let this story be a lesson to us all. If someone promises you a hundred percent return in 90 days, maybe ask a few more [00:34:00] questions.

No kidding. His whole story kind of reminds me of what's this saying? Um, money talks, wealth whispers. Like if you are truly as wealthy as he is and he is got millions of dollars and all this, you're not as flashy. Typically you're, you know, it's more quiet and, and that sort of thing. But somebody like this, you've gotta see.

Oh, okay. Like why are you making this big show? Why is money seems so foreign to you that you have to spend every last penny? Like, it doesn't seem right, but I can see at the time being desperate and being like, yeah, absolutely. Let's buy an RIRC. Let's buy a few. I don't know what it is, and right. I guess people are dying to send us mail from overseas and let's make that happen.

Yeah. It, it's truly a wild concept. And for the time period, I guess I don't, why do I always think of people from like 19, 20, like as being like everyone was wholesome and nobody would ever scam like that. Like I don't know why I think that like it was such an innocent time when clearly scamming Hass been [00:35:00] around.

Forever people will be scamming. This was a fun story to do though, uh, just because like you was were saying in the beginning, neither of us really knew anything about him. So it's kind of cool to learn the genesis of a phrase we use so much, um, and a name we know without really knowing. Anything about him?

Yeah, this was definitely a cool story and I'm glad that we were able to get it out this week because, uh, actually next week, the story that we're gonna have on Tuesday is about a Ponzi scheme, a crazy one. So I'm excited to share that on Tuesday, especially after we've just shared the story of the man himself who made this, this.

This particular type of scamming thing, this legendary in its own way. Yeah. There you go. Well, awesome. I really enjoyed this. Me too. All right guys. Thanks for listening this week. We will be back next week. Same time, same place. New story. Have a great week. [00:36:00] Bye.