AllFreePapers.com - All Free Papers and Essays for All Students
Search

Charles Ponzi

Autor:   •  April 14, 2019  •  Essay  •  328 Words (2 Pages)  •  66 Views

Page 1 of 2

Charles Ponzi was an Italian born immigrant who arrived at the U.S in 1903. He began his search for riches by working various odd jobs along the east coast. Eventually, he landed in Boston where he married a younger woman named Rose Gnecco. He ran her father’s business into the ground and continued his search for riches. The idea appeared to him in the form of a postal reply coupon, a small note that is attached to a letter sent in the mail and is redeemable for reply postage. Ponzi realized that this note which could be bought in a foreign country (in his case Spain) and could be exchanged for a U.S stamp for a small profit. He set his plan in motion and started his business known as the Securities Exchange Company. He sold the idea to thousands of investors. He kept the specifics secret but promised investors huge return as much as 50 percent. There was no real postal exchange, “A final audit of his company's assets after the whole business was over turned up $61 worth of the coupons” (Darby). Ponzi was able to appease investors by repaying them with new investors money. The scheme began this way and it only required a steady stream of investors to continue the con. This is when he began to offer commission to people who brought in new investors. If old investors were being paid, new investors were convinced their turn would come as well. Federal authorities and the post office began to investigating Ponzi and his too-good-to be true investment business they determined “…losses totaled $20 million — about $225 million in today’s dollars”(Herwick). They prosecuted him with mail fraud and sentenced him to five years of which only three and a half were served. After his release, Massachusetts prosecuted him as well this time giving him 9 years. After his release he was deported back to Italy and eventually died in Brazil in 1949.

...

Download as:   txt (1.8 Kb)   pdf (30.4 Kb)   docx (7.2 Kb)  
Continue for 1 more page »