People lined up hundreds deep outside his office, cash in hand. When he left the premises, crowds gathered around him, cheering. They couldn’t be deterred even after the government announced they were launching an inquiry to make sure everything was on the up and up.
It was the dawn of the Roaring Twenties and there was a spirit of excess and opportunity in the air. Social class and bank account limits were no longer cemented at the time of one’s birth. Everything seemed possible, and no one wanted to miss out on the chance to embrace the spirit of the day. But first, they had to get rich quick.
And so, Bostonians pulled their savings out of banks and out from under their mattresses and entrusted them to the man who promised financial success on a level never before heard of. Within 90 days, he would deliver a 50-percent return on their investment, he said. Those who had gotten in early were reporting that the reality was even better: Charles Ponzi was nearly doubling their fortunes in just a month and a half.
As the long history of financial fraud has taught us, when something seems too good to be true, it is. Charles Ponzi did not run the first ever Ponzi scheme, but his was the first that was so outrageous in size and scope that long after he died nearly penniless, the practice of taking money from new investors to pay off old would still be associated with his name.
Carlo Ponzi was born in 1882 in Italy into a family that had once been well-to-do, but had fallen…
