Saturday , January 16 2021

The beautiful life of Italian businessman Carlo Ponzi, who invented the pyramid scheme




Thanks to the fraud of the pyramid, Carlo Ponzi became a millionaire in a few months Credits: Getty Images

When hundreds of people were anxiously awaiting their money, they had to disappoint at the house when they announced that they would continue to be disappointed. Thereafter, these Italian settlers who settled in the United States with almost empty pockets became millionaires.

Carlo Ponzie told the New York Times in late 1920 that "I have come here with the hope of $ 2.50 in US and $ 1,000,000 in cash and I have never left it in the hope".

In those days, the Karisma practitioner was involved in a great controversy: the authorities started investigating about his company, the Securities Exchange Company, to understand that during the seven-month period, Ponzi had received millions of dollars and thousands of investors, and how over 90 days 50% interest can be offered.

Information about the opening of the investigation was a move in Boston. When people tried to break the company's office to demand compensation for their funds, they were buried there and some were also injured.

Thousands of hard investor began covering each morning against Ponzi offices, who silenced the water in less than a week and converted suspicion into security and sympathy.

Trusted Overdose

But how did he do it?


When citizens found out that Ponzi Company's investigations were opened, thousands of investors tried to recover their money.
When citizens found out that Ponzi Company's investigations were opened, thousands of investors tried to recover their money. Credits: Getty Images

When the authorities announced the investigation of Ponzi's business on that day, the professional appeared in public in front of the district attorney, he said that he will fully support the process and guarantee that he will pay every amount.

At the first moment, he estimated his company's debt of about $ 3,500,000 and said he had collected assets of $ 8,500,000, so he claimed – there was enough money to cover the investment and still there is good fortune.

He explained that his business was based on the benefit of the difference in the price of some international mail mail coupons, which were sold in different countries. It was the idea of ​​converting dollars earned from investors into a divisive currency such as Lira in Italy and buying money for coupons at a lower price.

This was sent with a strong currency where they were exchanged for stamps – the cost used was higher than the original coupon was paid – which in turn was converted into cash.

He assured that the whole cycle of operation has been around for 45 days and at that time, it can make up to 400% profit.

Public relations magician

During the running days of Bullfight against his company, Ponzi was the most expensive car for awhile, armed with his morning on the lamomobile.

With a big smile, he congratulated the people in the queue and told them not to be disappointed, because they all can collect their money, not just because those who paid the bill, but who want to recover their investments without waiting for 90 days Were there. The word

In his statements, he warned the investors not to come in the hands of "speculators", who, taking advantage of the current nerve, want to buy their promissory notes at reduced price and then collect them and also interest 50%.

In addition, Ponzi spoke to large financial institutions and announced a plan to bring revolution in the sector, which gave 50% to dividend investors and 50% to the savior.


With a friendly smile and apparently carefree attitude, Ponzi retrieved investors' confidence in a few days
With a friendly smile and apparently carefree attitude, Ponzi retrieved investors' confidence in a few days Credits: Getty Images

He After receiving citizenship, it also showed the possibility to enter politics to help unsafe. He said that if he earns 100 million US dollars he will keep only one million and will donate the rest to the rest.

He was obviously impressed with small gestures too. In those days, when thousands of people stood up to lift money from their company, they ordered the waiters to deliver free hot dogs and coffee. Thereafter, many decided to leave their money in Ponzi's hands and leave until 90 days of agreeing.

In less than a week, the queue of people keen to regain their investments flourished and the practitioner became a celebrity.

"After a week's research on Ponzi, public interest and its actions change in man, then people on the street are seen there on the street and congratulate them as heroes," he said on August 1, 1920. The New York Times.

"Even though the federal audit of its accounting records has begun rarely, its fans have found that it has already been claimed and is eager to regain the fund.

"Department stores, factories and large plants have raised their money and in 45 days they were waiting for an opportunity to invest money with Ponzi in their 50-day plan."

The name of the fraud

But a quiet short time will last.

Two weeks later, the federal audit announced that the security exchange company had to face at least $ 7,000,000 in debt.


After several weeks of investigation, Ponzi admitted that he could not pay off his debts and was sentenced to jail
After several weeks of investigation, Ponzi admitted that he could not pay off his debts and was sentenced to jail Credits: Getty Images

Ponzi claimed that he claimed to be US $ 4,000,000, he acknowledged being able to cope with the debt.

Then, the authorities accused them that, from the beginning, they knew they could not pay, and in fact, they did not negotiate with international mail coupons.

On December 15, 1919, Ponzi started with a reception of around $ 870 during the month of about $ 870, which led to a massive increase in funding in the wake of the operation that estimated $ 250,000 in one day and that 16,000 people of the Securities Exchange Company And employment to 16 individuals accused of keeping income collection in the cabinet and in the waste basket.

It was estimated that approximately 40,000 investors have given it $ 15,000,000 and $ 20,000,000 (some of the current $ 251 million dollars for some inflation arrangements).

Many of these nationalities and life levels went to the prosecutor's office to get justice by giving "every last penny" of their savings.

According to the authorities, Ponzi's "business" was to fund the interests of old investors, with a new type of deposit, in a kind of pyramid fraud, since then it has been named globally by its name "Ponzi Scheme".

Two days later, "businessman" went to jail, who was killed by one of the many angry investors demanding his head.

Emotions of criminals

Ponzie was sentenced to five years in federal prison, from which he served only for three and a half years. During that time, he used to send Christmas cards to his thousands of lenders, who promised to return the money after receiving their independence. When that time came, he was waiting for a new trial in Massachusetts for a great rigidity.

After conviction, he appealed the punishment and took advantage of his freedom to travel to Florida, where he tried to sell the swamp land. Because of this, he tried again and convicted of fraud.


After the scandal in Boston, Ponzi went to Florida to try to sell Swamp land
After the scandal in Boston, Ponzi went to Florida to try to sell Swamp land Credits: Getty Images

Ponzi escaped to Texas, but he was caught and sent back to Massachusetts, where he was in prison until 1934, when he was sent to Italy. After that, we know at least as far as, their criminal career that did not begin in the United States but started in Canada.

Between 1911 and 1912, Ponzi spent 20 months in Montreal Prison to forge a check in episodes, in which apparently there are some signs about what will happen next.

His biographer Michelle Zukf says that when Ponzi arrived in Boston in 1903, Ponzi was unlikely to succeed in the new part. At that time I was 20 years old, I did not know English that I did not have the best skills and to make matters worse, I believed in not honoring his life on the same day.

Ponzi grew up in the city of Lugo in northern Italy, at an expense of sacrificing to save his father's income share – to send mail and sell stamps – managed to send Rome to the University of Rome.

Instead of studying, young Carlo devoted himself to participate and soon to return home without a title or money. Then, his family agreed to send him to the other side of the Atlantic.

After spending the early years working as a waiter or dishwashcher in various cities on the east coast, Ponzi took a job in an Italian-owned bank in Montreal. According to Zakuzh, at that time he started thinking about "other roads" to earn money.


In 1934, Ponzi was released from prison but was waiting for the deportation process instead of independence
In 1934, Ponzi was released from prison but was waiting for the deportation process instead of independence Credit: Beatman

After being convicted of making a check, he was sent to jail, where he worked at the post office. Who was his supervisor, described him as a very intelligent and merciful young man who gifted for the number. However, he also pointed out that he had "passion for making a financial blow".

Apparently, when Ponzi went to work for an Italian airline in Brazil, he was able to remove the defect in the final years of his life. After the start of World War II the company was shut down, and after that, he tried to make the failed Hot Dog Sales Stall alive.

Thereafter, he taught some income English and French, which gave enough to sustain them.

18 decades, 1949, seven decades ago, he died in the charity ward of a hospital in Rio de Janeiro. It was 66 years old and broke


Angel Bermudes


BBC World


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