The OG of Ponzi Schemes Carlo Ponzi

The OG of Ponzi schemes

Ponzi schemes are named after Italian-born Carlo (or, Charles) Ponzi. Ponzi came to the United States in 1903. In December of that year, Ponzi established a firm called the Security Exchange Company, advertising a 50% return on investors’ money in 90 days. Ponzi’s 50% returns sparked a feeding frenzy for buyers. In fact it was not uncommon to see people waiting in lines outside the firm’s offices waiting to purchase Ponzi’s promissory notes. The notes usually ranged from $10 to $50,000, with the average valued at around $325. Ponzi didn’t invent this type of scam, but he took in so much cash that he became nationally known, making him somewhat of a celebrity not unlike Scott Rothstein. Reports of the day said that Ponzi and his associates were bringing in a million dollars a week, and every space in the office from bookshelves to filing cabinets and desk drawers were filled with investors’ hard earned cash. Ponzi was arrested in 1920, and spent the next fourteen years in and out of prison. He was eventually deported back to Italy, and died in 1949, broke, in Rio de Janeiro, Brazil. -2d2gc