Profile of Carlo Ponzi
Carlo (or Charles) Ponzi was an Italian immigrant who bilked millions of dollars out of thousands of hopeful investors in the 1920s, in what has since become known as a Ponzi Scheme. Ponzi arrived in the U.S. in 1903, then made his way to Canada by 1908. After a jail term for forgery, Ponzi was arrested for smuggling aliens into the U.S. and ended up in a federal prison in Atlanta, Georgia. He settled in Boston and worked as a dishwasher for years before coming up with a plan to get rich. In 1919 he formed the Securities Exchange Company (SEC), promising financial success by converting foreign postage coupons into U.S. currency. Ponzi promised returns too good to be true. And they were: early investors were paid off with money from new investors; there was no real investment going on, just cash distribution. (The approach is also known as a "pyramid scheme.") Beginning in late 1919 and early 1920, Ponzi moved as much as $15 million from thousands of investors, eventually using 35 branch offices. The scheme fell apart eight months later and Ponzi was convicted of embezzlement. His legal troubles dragged on for more than a decade and he was in and out of jail in the U.S. until 1934, when he was deported to Italy. He worked briefly for Benito Mussolini and then landed a job running an airline in Brazil, where he died destitute in 1949.
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