AKA: Carlo Ponzi / Charles Ponci / Charles P. Bianchi / Charles Borelli
Born: March 3, 1882 / Lugo, Italy
Died: June 18, 1949 / Rio de Janeiro, Brazil
Position: Founder, Securities Exchange Company
Crime: In 1919, Ponzi established a one-man operation called the Securities Exchange Company in Boston, MA. Ponzi’s scheme involved purchasing international reply coupons (IRCs) through other nations at a cheap rate, and then sending them back to the United States to be swapped for American stamps at a higher value. In theory, this arrangement was perfectly legal, but Ponzi was promising investors a 50% profit on their investment in just 90 days. Ponzi was able to pay the first few rounds of investors within 45 days, and within two years, he had employees all over the country recruiting new takers for this foolproof investment strategy. In reality, the profit margin was so slim, it would take millions of IRCs to make just a few dollars, and Ponzi began taking investments without actually buying the IRCs. By the time the scheme collapsed, Ponzi’s income was estimated at $1 million per week.
Losses: $20 million ($225 million in today’s dollar), and responsible for five bank collapses.
Charges/Sentencing: Two federal indictments, charged with 86 counts of mail fraud, and faced a life sentence. Plead guilty to a single count and was sentenced to 5 years in federal prison (only serving 3 ½ before facing state charges of 9 years). Ponzi was deported in 1934.