Bernard Lawrence Madoff is a U.S. businessman
and former chairman of the NASDAQ stock
exchange. He started the Wall Street firm Bernard
L. Madoff Investment Securities LLC in 1960 and
was its chairman until December 11, 2008, when
he was charged with perpetrating the largest
investor fraud ever committed by a single
individual.
At 8.30 a.m. on December 11, 2008, Federal
Bureau of Investigation agents arrested Madoff
and charged him with one count of securities
fraud. On the day prior to his arrest, Madoff told
his senior executives at the firm that the
management and advisory segment of the
and former chairman of the NASDAQ stock
exchange. He started the Wall Street firm Bernard
L. Madoff Investment Securities LLC in 1960 and
was its chairman until December 11, 2008, when
he was charged with perpetrating the largest
investor fraud ever committed by a single
individual.
At 8.30 a.m. on December 11, 2008, Federal
Bureau of Investigation agents arrested Madoff
and charged him with one count of securities
fraud. On the day prior to his arrest, Madoff told
his senior executives at the firm that the
management and advisory segment of the
required to handle the purchase and redemption of these items, which were of
extremely low cost and were sold individually, would have exceeded the gross profit.
The stories caused a panic run on the Securities Exchange Company. Ponzi paid out $2
million in three days to a wild crowd outside his office. He canvassed the crowd,
passed out coffee and donuts, and cheerfully told them they had nothing to worry
about. Many changed their minds and left their money with him.
On top of that, Barron noted that Ponzi told newspapers he invested his own cash in
real estate, stocks, and bonds like any normal investor. Barron pointed out the obvious
question here: if Ponzi had this failsafe scheme in which he could make a 50% profit,
why was he putting his own money into plain old investment instruments that would
give him (maybe) a 5% return? Those certainly didn’t sound like the actions of a
financial genius.
Barron’s conclusions ran as front-page news in the Boston Post in July 1920, which
would have been damning for most cons. Ponzi was such a charismatic force of
nature, though, that many people chose not to believe the paper’s report. Few believed
that their hero, the man who had “tripled” their life savings, was anything less than
100% legitimate. In fact, the morning that the Post ran Barron’s report, investors lined
up around the block outside of his office in an attempt to give him more money – even
after they’d been told that they’d been scammed. Ponzi later boasted that he’d taken in
a million dollars in new investments the day the report ran.
On August 10 1920 federal agents raided the Securities Exchange Company and shut it
down. There was no large stock of postal reply coupons. On August 12 Ponzi was
under arrest, with a Federal indictment. His liabilities were estimated at $7 million.
Since Ponzi had used the mail to notify his marks of how their “investments” were
extremely low cost and were sold individually, would have exceeded the gross profit.
The stories caused a panic run on the Securities Exchange Company. Ponzi paid out $2
million in three days to a wild crowd outside his office. He canvassed the crowd,
passed out coffee and donuts, and cheerfully told them they had nothing to worry
about. Many changed their minds and left their money with him.
On top of that, Barron noted that Ponzi told newspapers he invested his own cash in
real estate, stocks, and bonds like any normal investor. Barron pointed out the obvious
question here: if Ponzi had this failsafe scheme in which he could make a 50% profit,
why was he putting his own money into plain old investment instruments that would
give him (maybe) a 5% return? Those certainly didn’t sound like the actions of a
financial genius.
Barron’s conclusions ran as front-page news in the Boston Post in July 1920, which
would have been damning for most cons. Ponzi was such a charismatic force of
nature, though, that many people chose not to believe the paper’s report. Few believed
that their hero, the man who had “tripled” their life savings, was anything less than
100% legitimate. In fact, the morning that the Post ran Barron’s report, investors lined
up around the block outside of his office in an attempt to give him more money – even
after they’d been told that they’d been scammed. Ponzi later boasted that he’d taken in
a million dollars in new investments the day the report ran.
On August 10 1920 federal agents raided the Securities Exchange Company and shut it
down. There was no large stock of postal reply coupons. On August 12 Ponzi was
under arrest, with a Federal indictment. His liabilities were estimated at $7 million.
Since Ponzi had used the mail to notify his marks of how their “investments” were
terms). A frenzy was building, and Ponzi began to hire agents to take in money from all
over New England and New Jersey. At that time investors were being paid impressive
rates, encouraging yet others to invest. By May 1920 he had made $420,000 ($4.59
Million in 2008 terms). By July 1920 he had made millions. People were mortgaging
their homes and investing their life savings. Most did not take their profits, but
reinvested. At his peak, Ponzi was raking in $250,000 a day
At first Ponzi issued notes of different colors depending on the denomination, but
beginning in March, 1920, all notes were yellow with the dollar amount written in. Later
problems with forgers raising the face value of notes showed the advantage of the multi-
color scheme.
Ponzi was bringing in cash at a fantastic rate, but the simplest financial analysis would
have shown that the operation was running at a large loss. As long as money kept
flowing in, existing investors could be paid with the new money. In fact, new money
was the only source Ponzi had to pay off those investors, as he made no effort to
generate legitimate profits.
Eventually smarter financial heads started looking at Ponzi’s business. Clarence Barron,
owner of the Wall Street Journal and founder of the financial magazine that bears his
over New England and New Jersey. At that time investors were being paid impressive
rates, encouraging yet others to invest. By May 1920 he had made $420,000 ($4.59
Million in 2008 terms). By July 1920 he had made millions. People were mortgaging
their homes and investing their life savings. Most did not take their profits, but
reinvested. At his peak, Ponzi was raking in $250,000 a day
At first Ponzi issued notes of different colors depending on the denomination, but
beginning in March, 1920, all notes were yellow with the dollar amount written in. Later
problems with forgers raising the face value of notes showed the advantage of the multi-
color scheme.
Ponzi was bringing in cash at a fantastic rate, but the simplest financial analysis would
have shown that the operation was running at a large loss. As long as money kept
flowing in, existing investors could be paid with the new money. In fact, new money
was the only source Ponzi had to pay off those investors, as he made no effort to
generate legitimate profits.
Eventually smarter financial heads started looking at Ponzi’s business. Clarence Barron,
owner of the Wall Street Journal and founder of the financial magazine that bears his
envelope was an international reply coupon (IRC), something which he had never seen
before. He asked about it and found a weakness in the system which would, in theory,
allow him to make money.
The purpose of the postal reply coupon was to allow someone in one country to send it
to a correspondent in another country, who could use it to pay the postage of a reply.
IRCs were priced at the cost of postage in the country of purchase, but could be
exchanged for stamps to cover the cost of postage in the country where redeemed. As
exchange and postal rates fluctuated, though, there was an opportunity to make a
profit. You only had to purchase postal reply coupons cheaply in some foreign country,
send them back to the U.S. to swap them out for American stamps of a higher value,
then sell these stamps.
Inflation after the First World War had much decreased the cost of postage in Italy
expressed in U.S. dollars, so that an IRC could be bought cheaply in Italy and
exchanged for U.S. stamps to a higher value. Ponzi claimed that the net profit on these
transactions, after expenses and exchange rates, was in excess of 400%. This was a
form of arbitrage, or profiting by buying an asset at a lower price in one market and
immediately selling it in a market where the price is higher, which is not illegal. Ponzi
started buying and selling postal reply coupons using agents in his native Italy, and he
was making a good living doing it.
before. He asked about it and found a weakness in the system which would, in theory,
allow him to make money.
The purpose of the postal reply coupon was to allow someone in one country to send it
to a correspondent in another country, who could use it to pay the postage of a reply.
IRCs were priced at the cost of postage in the country of purchase, but could be
exchanged for stamps to cover the cost of postage in the country where redeemed. As
exchange and postal rates fluctuated, though, there was an opportunity to make a
profit. You only had to purchase postal reply coupons cheaply in some foreign country,
send them back to the U.S. to swap them out for American stamps of a higher value,
then sell these stamps.
Inflation after the First World War had much decreased the cost of postage in Italy
expressed in U.S. dollars, so that an IRC could be bought cheaply in Italy and
exchanged for U.S. stamps to a higher value. Ponzi claimed that the net profit on these
transactions, after expenses and exchange rates, was in excess of 400%. This was a
form of arbitrage, or profiting by buying an asset at a lower price in one market and
immediately selling it in a market where the price is higher, which is not illegal. Ponzi
started buying and selling postal reply coupons using agents in his native Italy, and he
was making a good living doing it.
He should be put away for the rest of his life, or locked in a room with the people he
defrauded. Dan Schlesinger
N.B . No, he should be locked in a room with the wives whose husbands he
defrauded. That would teach him a lesson!
*****
Somehow I missed out on that one as I suppose he was looking for folks who actually
had money to invest Kitty Huddleston
*****
As long as there is someone who believes in getting something for nothing these things
will proliferate. Just look at the seemingly intelligent people who fall for those Nigerian
scams. Marilyn Hamill
N.B. You mean they are scams.......???
*****
What was it that P.T. Barnum said..? "There is a sucker born every minute." (That was
back when there was an average of one person born per minute, e.g. everyone is a
sucker!) If the investors were a little smarter and a less trusting, then I doubt if the toll
would have been $50B. John Chulick
*****
The quiz was so much fun. There has been so much news coverage of the
unconscionable acts of Madoff, it was the first thing that popped into my head when I
read the questions. Tina Kowis
*****
You can buy a framed image of Ponzi in his pjs online from Life magazine. He is
sawing wood and looking quite pleased. Get the images at Google Images by searching
on "Charles Ponzi" -- he does look quite pleased with himself. Judy Pfaff
*****
The old saying goes: "You can't cheat an honest man". Those expecting unrealistic
returns probably thought something was up; considering Madoofs background.
Jim Kiser
*****
This is an extremely evil man who destroyed many good works. Madoff was turned in
by his two sons. Susan Fortune
*****
Mr. Ponzi doesn't look too uncomfortable in this photograph...apparently, sometimes
crime does pay and we are all suffering for the greed and dishonesty of Mr. Madoff
and others like him! Great quiz; I had no idea there was a person who gave the scheme
it's name. Barbara Battles
*****
Incredible! Mary South
*****
Interesting picture to see him posing (in pajamas) in front of a mailbox! This photo
was in Life Magazine in 1942. Linda Dean
*****
The scum [Bernard Madoff] is now living in his Manhatten Penthouse. He needs to go
to Rykers, or however you spell that, and spend the rest of his life in solitary
confinment. Sharon Martin
defrauded. Dan Schlesinger
N.B . No, he should be locked in a room with the wives whose husbands he
defrauded. That would teach him a lesson!
*****
Somehow I missed out on that one as I suppose he was looking for folks who actually
had money to invest Kitty Huddleston
*****
As long as there is someone who believes in getting something for nothing these things
will proliferate. Just look at the seemingly intelligent people who fall for those Nigerian
scams. Marilyn Hamill
N.B. You mean they are scams.......???
*****
What was it that P.T. Barnum said..? "There is a sucker born every minute." (That was
back when there was an average of one person born per minute, e.g. everyone is a
sucker!) If the investors were a little smarter and a less trusting, then I doubt if the toll
would have been $50B. John Chulick
*****
The quiz was so much fun. There has been so much news coverage of the
unconscionable acts of Madoff, it was the first thing that popped into my head when I
read the questions. Tina Kowis
*****
You can buy a framed image of Ponzi in his pjs online from Life magazine. He is
sawing wood and looking quite pleased. Get the images at Google Images by searching
on "Charles Ponzi" -- he does look quite pleased with himself. Judy Pfaff
*****
The old saying goes: "You can't cheat an honest man". Those expecting unrealistic
returns probably thought something was up; considering Madoofs background.
Jim Kiser
*****
This is an extremely evil man who destroyed many good works. Madoff was turned in
by his two sons. Susan Fortune
*****
Mr. Ponzi doesn't look too uncomfortable in this photograph...apparently, sometimes
crime does pay and we are all suffering for the greed and dishonesty of Mr. Madoff
and others like him! Great quiz; I had no idea there was a person who gave the scheme
it's name. Barbara Battles
*****
Incredible! Mary South
*****
Interesting picture to see him posing (in pajamas) in front of a mailbox! This photo
was in Life Magazine in 1942. Linda Dean
*****
The scum [Bernard Madoff] is now living in his Manhatten Penthouse. He needs to go
to Rykers, or however you spell that, and spend the rest of his life in solitary
confinment. Sharon Martin
| 1. I became a millionaire through fraudulent investments involving postal reply coupons. Who am I? 2. How does my scam work? 3. Why was such a scam in the news recently? |
 |  |  |  |
| If you have a picture you'd like us to feature a picture in a future quiz, please email it to us at CFitzp@aol.com. If we use it, you will receive a free analysis of your picture. You will also receive a free Forensic Genealogy CD or a 10% discount towards the purchase of the Forensic Genealogy book. |
 |  |  |  |
| Answers: 1. Charles Ponzi 2. Money from later investors is used to pay profits to earlier investors. When the scheme collpases, there is nothing left to use to pay later investors. 3. In Dec 2008, Bernard Madoff was accused of pulling off a $50B Ponzi scheme. |
| ********** |
| Answer to Quiz #190 - 28 December 2008 |
| ********** |
| ********** |
| If you enjoy our quizzes, don't forget to order our books! Click here. |
| Quiz #190 Results |
| The idea for this quiz was submitted by Quizmaster Extraordinaire Stan Read. |
| ********** |
| Something to Think About Submitted by Jim Kiser |
| Congratulations to Our Winners Teresa Yu Bill Utterback Tamura Jones Don Draper Norm Smith Gene Glass Dan Schlesinger Dennis Brann Helen Davis Christopher Tennant Sandy Thompson Maureen O'Connor Wayne Douglas Mike Dalton Brian Kemp Anna Farris Carol Darrow Deborah Campisano Lydia Sittman Douglas Smith Sandra McConathy Carl Blessing Don Haase Edee Scott Tina Kowis Milene Rawlinson Mary Hurley Marilyn Hamill Robin Depierto Karen Kay Bunting Kitty Huddleston Nancy Lear John Chulick Judy Pfaff Diane Burkett Susan Fortune John Sims Gary Sterne Barbara Battles Tom McEntee Mary South Mike Swierczewski Paula Harris Joshua Kreitzer Richard Cleaveland Beth Long Jim Kiser Robert Edward McKenna, QPL Carolyn Cornelius Kelly Fetherlin Linda Dean Karen Petrus Sharon Martin |
| Bernard Madoff |
business was "basically, a giant Ponzi scheme". Madoff was arrested based on a tip-off
from his sons, Andrew and Mark. Five days after his arrest, Madoff's assets and those
of the firm were frozen and a receiver was appointed to handle the case. According to
federal charges, Madoff himself admitted that his firm has "liabilities of approximately
US$50 billion." Banks from outside the U.S. have announced that they have potentially
lost billions in U.S. dollars as a result. Some investors, journalists and economists have
questioned Madoff's statement that he alone is responsible for the large-scale operation,
and investigators are looking to determine if there were others involved in the scheme.
Madoff's firm, which is in the process of liquidation, was one of the top market maker
businesses on Wall Street (the sixth-largest in 2008), often functioning as a
"third-market" provider that bypassed "specialist" firms and directly executed orders
over-the-counter from retail brokers. The firm also encompassed an investment
management and advisory division that is now the focus of the fraud investigation.
Madoff was also a prominent philanthropist who served on the boards of nonprofit
institutions, many of which entrusted his firm with their endowments. The freeze of his
and his firm's assets significantly affected businesses around the world and a number
of charities, some of which, including the Robert I. Lappin Charitable Foundation, the
Picower Foundation, and the JEHT Foundation, have been forced to close as a
consequence of the fraud.
from his sons, Andrew and Mark. Five days after his arrest, Madoff's assets and those
of the firm were frozen and a receiver was appointed to handle the case. According to
federal charges, Madoff himself admitted that his firm has "liabilities of approximately
US$50 billion." Banks from outside the U.S. have announced that they have potentially
lost billions in U.S. dollars as a result. Some investors, journalists and economists have
questioned Madoff's statement that he alone is responsible for the large-scale operation,
and investigators are looking to determine if there were others involved in the scheme.
Madoff's firm, which is in the process of liquidation, was one of the top market maker
businesses on Wall Street (the sixth-largest in 2008), often functioning as a
"third-market" provider that bypassed "specialist" firms and directly executed orders
over-the-counter from retail brokers. The firm also encompassed an investment
management and advisory division that is now the focus of the fraud investigation.
Madoff was also a prominent philanthropist who served on the boards of nonprofit
institutions, many of which entrusted his firm with their endowments. The freeze of his
and his firm's assets significantly affected businesses around the world and a number
of charities, some of which, including the Robert I. Lappin Charitable Foundation, the
Picower Foundation, and the JEHT Foundation, have been forced to close as a
consequence of the fraud.
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| Comments from Our Readers |
| FOOLING SOME OF THE PEOPLE ALL OF THE TIME "Tell ya' what I'm going to do" Said Charles Ponzi, of pyramid fraud fame, "I will double your money in no time at all, And your life will never be the same!" Using International reply coupons (IRC), In the 1930's used to buy stamps for reply, Pocketing the difference in the value of postage, He had a plan for an easy money supply. Bernard Madoff of recent scam fame, Used a "Ponzi" type scheme for personal gain, Fooling his church, family and friends, Causing much institutional and person pain. Robert Edward McKenna Quiz Poet Laureate ***** Hi Robert, Your poem this week is very clever, Describing people who say they'd never invest in something so foolish and mean As Mr. Charles Ponzi's IRC scheme! But recently greed was all over the news Thanks to Mr. Madoff and all of his crew. He bilked all - from famous down to empty nesters Making them think they were lucky investors! Colleen Fitzpatrick Quizmaseter General Understudy to Quiz Poet Laureate Robert Edward McKenna |
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| Charles Ponzi (3 March 1882 - 18 January 1949) http://en.wikipedia.org/wiki/Charles_Ponzi http://www.mark-knutson.com/Ponzi/theScheme.html http://blogs.static.mentalfloss.com/blogs/archives/20995.html |
Charles Ponzi was an Italian immigrant to the
United States who became one of the greatest
swindlers in American history. The term "Ponzi
scheme" is a widely known description of any
scam that relies on a "pyramid" of "investors"
who contribute money to a fraudulent
program. He promised clients a 50% profit
within 45 days, or 100% profit within 90 days,
by buying discounted postal reply coupons in
other countries and redeem them at face value
in the United States as a form of arbitrage
Ponzi was probably inspired by the scheme of
William Miller, a Brooklyn bookkeeper who in
1899 used the same pyramid scheme to take in
$1 million.
On November 15, 1903 he arrived aboard the
S.S. Vancouver in Boston. By his own
account, Ponzi arrived in the United States in
1903 with two dollars and fifty cents in his
pocket,
United States who became one of the greatest
swindlers in American history. The term "Ponzi
scheme" is a widely known description of any
scam that relies on a "pyramid" of "investors"
who contribute money to a fraudulent
program. He promised clients a 50% profit
within 45 days, or 100% profit within 90 days,
by buying discounted postal reply coupons in
other countries and redeem them at face value
in the United States as a form of arbitrage
Ponzi was probably inspired by the scheme of
William Miller, a Brooklyn bookkeeper who in
1899 used the same pyramid scheme to take in
$1 million.
On November 15, 1903 he arrived aboard the
S.S. Vancouver in Boston. By his own
account, Ponzi arrived in the United States in
1903 with two dollars and fifty cents in his
pocket,
| Charles Ponzi c. 1910 |
having gambled away the rest of his life savings during the voyage. "I landed in this
country with $2.50 in cash and $1 million in hopes, and those hopes never left me," he
later told the New York Times. He quickly learned English and spent the next few years
doing odd jobs along the East Coast, eventually taking a job as a dishwasher in a
restaurant, where he slept on the floor. He managed to work his way up to the position
of waiter, but was fired for shortchanging the customers and theft.
In 1907 Ponzi moved to Montreal, Quebec, and became an assistant teller in the newly
opened Banco Zarossi, a bank started by "Louis" Luigi Zarossi to service the influx of
Italian immigrants arriving in the city. Zarossi paid 6% interest on bank deposits -
double the going rate at the time - and was growing rapidly as a result. Ponzi found out
that the bank was in serious financial trouble because of bad real estate loans, and that
Zarossi was funding the interest payments not through profit on investments, but by
using money deposited in newly opened accounts. The bank eventually failed and
Zarossi fled to Mexico with a large portion of the bank's money.
country with $2.50 in cash and $1 million in hopes, and those hopes never left me," he
later told the New York Times. He quickly learned English and spent the next few years
doing odd jobs along the East Coast, eventually taking a job as a dishwasher in a
restaurant, where he slept on the floor. He managed to work his way up to the position
of waiter, but was fired for shortchanging the customers and theft.
In 1907 Ponzi moved to Montreal, Quebec, and became an assistant teller in the newly
opened Banco Zarossi, a bank started by "Louis" Luigi Zarossi to service the influx of
Italian immigrants arriving in the city. Zarossi paid 6% interest on bank deposits -
double the going rate at the time - and was growing rapidly as a result. Ponzi found out
that the bank was in serious financial trouble because of bad real estate loans, and that
Zarossi was funding the interest payments not through profit on investments, but by
using money deposited in newly opened accounts. The bank eventually failed and
Zarossi fled to Mexico with a large portion of the bank's money.
In the next few years, Ponzi was
caught working several more
scams in Canada and the US, for
which he served a total of five
years in prison. But it was not
until about 1918 when he was
living again in Boston that he got
the idea for his most famous
scam.
Ponzi received a letter in the mail
from a company in Spain asking
about the catalog. Inside the
| International Reply Coupon (IRC) |
| Norman Braman, former owner of the Philadelphia Eagles; New York Mets owner Fred Wilpon; New Jersey Senator Frank Lautenberg, who entrusted his family's charitable foundation to Madoff; Foundations tied to Nobel prize winner Elie Wiesel and Academy Award Winning Director Steven Spielberg; Mort Zuckerman, owner of the New York Daily News, estimated his charity lost $30 million; Clients and shareholders in Europe's biggest banks and hedge funds, who had investment accounts with Madoff, lost billions; The Robert I. Lappin Charitable Foundation, a charity that financed trips for Jewish youth to Israel immediately terminated its staff. |
| Prominent Victims of Bernard Madoff's Ponzi Scheme |
Ponzi canvassed friends and associates to back his
scheme, offering a 50% return on investment in 45
days. The great returns available from postal reply
coupons, he explained to them, made such incredible
profits easy. He started his own company, the
"Securities Exchange Company", to promote the
scheme.
Some people invested, and were paid off as
promised. The word spread, and investment came in
at an ever-increasing rate. Ponzi hired agents and
paid them generous commissions for every dollar
they brought in. By February 1920, Ponzi's total take
was US$5,000, (approximately US$54,000 in 2008
dollars).
By March he had made $30,000 ($328,000 in 2008
scheme, offering a 50% return on investment in 45
days. The great returns available from postal reply
coupons, he explained to them, made such incredible
profits easy. He started his own company, the
"Securities Exchange Company", to promote the
scheme.
Some people invested, and were paid off as
promised. The word spread, and investment came in
at an ever-increasing rate. Ponzi hired agents and
paid them generous commissions for every dollar
they brought in. By February 1920, Ponzi's total take
was US$5,000, (approximately US$54,000 in 2008
dollars).
By March he had made $30,000 ($328,000 in 2008
| Charles Ponzi c. 1910 |
name, realized Ponzi must have been a huckster
and went on the offensive. While Barron
conceded that there probably was a way for a
person to make a small amount of quick cash
on the postal reply coupon scheme, he figured
that Ponzi would have to be moving 160 million
coupons around to raise the cash he needed to
support the business. Since there were only
27,000 postal reply coupons circulating in
the world, Ponzi's story didn’t check out.
(Things only got worse when the Postal Service
reported that there wasn’t a huge flow of the
coupons from one country to the other.) The
gross profit margin in percent on buying and
selling each IRC was colossal, but the overhead
and went on the offensive. While Barron
conceded that there probably was a way for a
person to make a small amount of quick cash
on the postal reply coupon scheme, he figured
that Ponzi would have to be moving 160 million
coupons around to raise the cash he needed to
support the business. Since there were only
27,000 postal reply coupons circulating in
the world, Ponzi's story didn’t check out.
(Things only got worse when the Postal Service
reported that there wasn’t a huge flow of the
coupons from one country to the other.) The
gross profit margin in percent on buying and
selling each IRC was colossal, but the overhead
performing, he faced serious mail fraud
charges; in total, the government brought 86
charges against him in two separate
indictments. Ponzi pled guilty to one of these
charges in exchange for a light sentence of
five years.
He served around three and a half years, then
got his release to face state charges, for which
he received a sentence of nine more years. But
before he could go back to jail, he jumped bail
and tried to start new scams in Florida and
Texas. Eventually, though, his time on the lam
ran out, and he served his whole sentence.
charges; in total, the government brought 86
charges against him in two separate
indictments. Ponzi pled guilty to one of these
charges in exchange for a light sentence of
five years.
He served around three and a half years, then
got his release to face state charges, for which
he received a sentence of nine more years. But
before he could go back to jail, he jumped bail
and tried to start new scams in Florida and
Texas. Eventually, though, his time on the lam
ran out, and he served his whole sentence.
Upon his release, Ponzi was deported to Italy and spent the rest of his life in poverty.
He had a stroke in 1948, and died in a charity hospital in Rio de Janeiro on January 18,
1949. By then he was blind in one eye and partially paralyzed. Charles Ponzi was buried
in a pauper’s grave.
In the charity hospital, Ponzi granted one last interview to an American reporter, and
commented about the wild ride he had given Bostonians: "Even if they never got
anything for it, it was cheap at that price. Without malice aforethought I had given them
the best show that was ever staged in their territory since the landing of the Pilgrims! It
was easily worth fifteen million bucks to watch me put the thing over."
He had a stroke in 1948, and died in a charity hospital in Rio de Janeiro on January 18,
1949. By then he was blind in one eye and partially paralyzed. Charles Ponzi was buried
in a pauper’s grave.
In the charity hospital, Ponzi granted one last interview to an American reporter, and
commented about the wild ride he had given Bostonians: "Even if they never got
anything for it, it was cheap at that price. Without malice aforethought I had given them
the best show that was ever staged in their territory since the landing of the Pilgrims! It
was easily worth fifteen million bucks to watch me put the thing over."
| ********** |
| Young Chuck moved to Texas and bought a donkey from a farmer for $100.00. The farmer agreed to deliver the donkey the next day. The next day he drove up and said, Sorry son, but I have some bad news, the donkey died.' Chuck replied, 'Well, then just give me my money back.' The farmer said, 'Can't do that. I went and spent it already.' Chuck said, 'Ok, then, just bring me the dead donkey.' The farmer asked, 'What ya gonna do with him?' Chuck said, 'I'm going to raffle him off.' The farmer said, 'You can't raffle off a dead donkey!' Chuck said, 'Sure I can Watch me. I just won't tell anybody he's dead.' A month later, the farmer met up with Chuck and asked, 'What happened with that dead donkey?' Chuck said, 'I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $998.00.' The farmer said, 'Didn't anyone complain?' Chuck said, 'Just the guy who won. So I gave him his two dollars back.' Chuck now works for the government. |
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| Click here to read NPR article about Bernard Madoff and to hear NPR's report on his fraud investigation and arrest. NPR 16 December 2008 |
| See the Wall Street Journal list of top Madoff investors who lost their investments in his Ponzi scheme. Click here. |