He spoke of sending for Rose once he got settled, but her home and family were in Boston. Even if she had wanted to join him in Italy, Ponzi could not support her. He barely scraped by doing odd jobs and working occasionally as a guide in Rome. For the next two years they corresponded regularly. Ponzi enlisted Rose in his vigorous, lengthy, unsuccessful attempts to find an American publisher for the autobiography he called The Rise of Mr. Ponzi.
The inevitable blow came in 1936, when after eighteen years of marriage, more worse than better, more apart than together, Rose decided she could no longer remain Mrs. Ponzi. Her feelings for him had not changed, but their separation seemed likely to be endless. It was time to move on. “When he was down, when he was in trouble, when he was in prison, I stuck to him,” she told a Post reporter. “When he had millions, when he had a mansion, when he had cars, I stuck with him. And now I feel that I have proved my loyalty through thick and thin, and I intend to secure a quiet divorce.”
Reached in Rome, Ponzi tried to bluff Rose into jealousy by telling a reporter that he had become engaged to an eighteen-year-old girl. Rose would not bite. She said simply that she hoped he was happy. Rose resolved for religious reasons that she would not remarry, and so she would never fulfill her dreams of motherhood. Ponzi sought to return to Boston to oppose the divorce but ultimately fought it in absentia and lost. The marriage ended in December 1936.
In 1939, Ponzi moved to Brazil to take a job with the Italian airline LATI. The job had been arranged by his cousin Attilio Biseo, an Italian air force colonel who commanded the Green Mice Squadron and was friendly with Mussolini’s son Bruno. Ponzi did well for a while, but eventually it fell apart. He became enmeshed in what he claimed were efforts to expose a smuggling ring operated within the airline. By 1942 he was out of a job. He made ends meet by running a small rooming house in Rio de Janeiro and teaching English in a private school. Soon the momentary millionaire was living on seventy-five dollars a month, though he optimistically called it “quite a tidy sum here.” His eyesight and his health began to fail, and he remained weakened from a heart attack that had struck him seven years to the day after his deportation.
In the meantime, Rose supported herself working as the bookkeeper and de facto manager of the Cocoanut Grove, a Boston nightclub partially owned by her divorce lawyer, Barnett Welansky. Rose found herself thrust unwillingly back into the headlines in November 1942, when a fast-moving fire claimed the lives of 492 people at the nightclub. Tired after a long day of work, Rose had resisted the urgings of friends to remain at the club that night for a party. Instead she’d gone home early, a decision that probably saved her life. Later, she became a key witness in the hearings to assess blame.
Even after the divorce, Ponzi and Rose corresponded with some regularity and with obvious affection. Ponzi sent her notes at Christmas and on her birthday, usually addressed to “My dear Rose” and signed “Your Charlie.” Sometimes he sent kisses, and sometimes she sent photos in return. In one 1941 letter, Rose coyly inquired if Ponzi was married. “Of course I am, in a way,” he answered. “I am married to you, even if it is a one-sided and long-distance affair.” When a Brazilian friend urged him to marry a forty-five-year-old woman who could nurse him through his last years, Ponzi scoffed: “If forty-five was my measure, I would rather take it in three installments of fifteen each.”
The nightclub fire seemed to draw the two closer. When he learned that Rose had survived, Ponzi poured out his heart. “I have missed you terribly,” he wrote. “I have thought you lost forever, and under circumstances more horrible than death itself. I don’t know how the shock did not kill me right then and there. I believe it was because somehow there still remained a dim ray of hope at the bottom of my heart: hope that the gods would not be so unmerciful to you.”
“Perhaps I made a mess of your life but it was not for lack of the necessary sentiment,” Ponzi continued. “Here I am, past sixty-one, thousands of miles away from you, physically separated from you these past nine years, legally a stranger to you, and yet feeling toward you the same as I did that night in June when I took you home from the first movies we saw together in Somerville Avenue.”
Their letters continued, and several times each tiptoed around the possibility of getting back together, either for a visit by Rose to Brazil or an attempt by Ponzi to return to the United States. “Dear Sweet Thing,” Ponzi wrote in 1947. “Decidedly you have lost all sense of morals and social behavior! What do you mean by suggesting that I come up there and make myself at home in your apartment? What would the people say of you . . . living with a strange man? I am just joking, dear, so as to forget the tragic side of the thing: the impossibility of going with it. As to your coming down here, it is entirely out of the question not only for the reasons you mention but also because life here would be unbearable for you.” They continued writing to each other, long letters that described daily life and the comings and goings of old friends Ponzi had not seen in decades. Once Ponzi tried to enlist Rose in a moneymaking idea involving the importation of trucks, pens, watches, radios, clocks, and other goods from the United States. But the deals evaporated with Ponzi’s diminishing finances and failing health, and their letters became less frequent.
By 1948, Ponzi was almost blind. A brain hemorrhage robbed him of control of his left leg and left arm. He lived in a small apartment with a young family and subsisted on a small pension from the Brazilian government. As his body weakened, he spent increasing amounts of time on the charity ward of a Rio hospital. A photograph of him there shows a man who looks much older than his years, his bald head propped on a pillow, his frail body swimming in an ill-fitting hospital gown. A reporter for the Associated Press found him there. Though the reporter showed no signs of realizing it, Ponzi took the opportunity of a final interview to unburden himself as never before. During his trials he had claimed innocence, and even in his memoirs Ponzi had danced around the true nature of his investment business. But with the reporter at his hospital bedside, Ponzi came clean.
Ponzi in bed in the charity ward of a Rio de Janeiro hospital in 1948.
The Boston Globe
“Well,” he began, smiling his old smile, “how much do you know about me? I was number one in those days before Al Capone. . . . Once I had fifteen million dollars. I used to carry a couple of million in my pockets in certified checks and cash. Look at me now. I guess a lot of people would say I got what I deserved. Well, that was twenty-eight years ago. A lot of water has gone under the bridge since. But I hit the American people where it hurts—in the pocketbook. Those were confused, money-mad days. Everybody wanted to make a killing. I was in it plenty deep, rolling in other people’s money.”
Then came the confession: “My business was simple. It was the old game of robbing Peter to pay Paul. You would give me one hundred dollars and I would give you a note to pay you one-hundred-and-fifty dollars in three months. Usually I would redeem my note in forty-five days. My notes became more valuable than American money. . . . Then came trouble. The whole thing was broken.”
Ponzi recounted the story honestly and without rancor. When he was finished, he told the reporter he was regaining his strength and hoped to have an operation soon to restore his sight.
Ponzi said as much in his final letter to Rose, dictated to a hospital employee: “I am doing fairly well, and in fact I am getting better every day and I expect to go back home for Christmas.” It was false hope, but that had always been his strength. Deep within the impoverished old man in the hospital bed remained the optimistic young dandy of 1920.
He was still Ponzi, and he still believed the triumphant words he had used to end his memoirs: “Life, hope, and courage are a combination which knows no defeat. Temporary setbacks, perhaps, but utter and permanent defeat? Never!”
Ponzi never left the hospital’s charity ward. He spent his last days flanked on one side by a patient with a hacking cough and on the other by an old man who stared at the ceiling. Ponzi died of a blood clot on t
he brain on January 17, 1949. He was sixty-six. He had seventy-five dollars to his name, just enough for his burial. Rose would have liked to have had his body returned to Boston for a proper funeral, but she had lacked the money to do so.
Ponzi’s death was reported by newspapers and magazines across the country, including a full page in Life magazine, giving reporters an opportunity to colorfully revisit the phenomenon he had created. They ran photos of Ponzi at the height of his popularity, and waxed poetic about his charm and moxie. Of course, the Peter-to-Paul scheme did not die with him. In the years that followed, reporters and fraud investigators began using Ponzi’s name as shorthand when describing similar investment scams. In 1957, the Encyclopaedia Britannica formally acknowledged that his name had become synonymous with swindle. Soon the language sentinels at the Oxford English Dictionary followed suit, entering it into the great book as “Ponzi scheme.” Its definition: “A form of fraud in which belief in the success of a fictive enterprise is fostered by payment of quick returns to first investors from money invested by others.” It was not how Ponzi had hoped to be remembered, but it would have to suffice.
In 1956, Rose was working as a bookkeeper at the Bay State Raceway in Foxboro, Massachusetts, when she married the track’s manager, Joseph Ebner. They had a good life together, regularly traveling back and forth between racetracks in Massachusetts and Florida. She died in 1993 at age ninety-seven, happily anonymous and beloved by her many nieces and nephews. After Rose died, her family went through her belongings and found Ponzi’s letters. Reading his words, his playful responses to the notes she had sent him over the years, their suspicions were confirmed.
Despite the divorce and the heartaches, despite their dashed dreams and decades apart, the one thing Ponzi had never lost was Rose’s love.
A NOTE ON SOURCES
This is a work of nonfiction. Though I have tried to bring Ponzi’s story to life by writing this book in narrative form, I have invented none of the dialogue, altered none of the chronologies, and imagined none of the scenes described herein. All thoughts and feelings ascribed to persons came from the persons themselves, based on spoken or written comments. Descriptions of what a person experienced through his or her senses came either from the person or from photographs, newsreel footage, detailed street and fire insurance maps, or accounts in newspapers of the day. When I wrote that Rose Ponzi blushed, for instance, it was because a reporter had witnessed and recorded it. Put simply, I employed no fictional devices under the umbrella of literary license.
This approach was important for several reasons. First, given the nature of the subject himself, it seemed essential to draw a bright line between real and fake. Second, the truth was better than anything I could have invented. Third, Ponzi’s true story was already at risk of being permanently obscured in misinformation as a result of a “fictionalized biography” and other imaginary tales. One writer referred authoritatively, and erroneously, to Ponzi’s brothers and sisters, and then let his fantasies run amok when describing Ponzi’s Lexington home: “Interior decorators charged him half-a-million dollars to make the home livable. One hundred thousand dollars went to stock his wine cellar with clarets and brandies from the 1870s. He had a house staff of fifteen employees including armed guards with orders to shoot any prowler on sight. The twenty-acre estate was surrounded by a brick wall topped with barbed wire.” And so on.
Important insight into Ponzi, as well as dialogue and certain scenes, came from his little-noticed autobiography, The Rise of Mr. Ponzi. Portions of his memoirs are, like the man himself, flawed by self-aggrandizement and unreliability. However, much of Ponzi’s account squares with verifiable facts. I have used Ponzi’s version primarily to illuminate his unique impressions of people and events, and I have been careful to avoid repeating his errors. Moreover, I have used expanded source notes in several places to sort through the more tangled or incredible aspects of his account. Finally, newspaper stories without page numbers came, almost without exception, from the archives of the Boston Globe, where clips were cataloged by date without notations of the pages on which they appeared.
NOTES
Prologue
xii
a gullible newspaper reporter: “Police Bring Back Money Magicians,” Boston Herald, August 27, 1920, p. 5. Also “Money ‘Made’ as Victims Looked On,” Boston Daily Globe, August 27, 1920, p. 1.
xii
In 1920, anything seemed possible: David E. Kyvig, Daily Life in the United States, 1920–1939: Decades of Promise and Pain, Greenwood Press, 2002. Also Frederick Lewis Allen, Only Yesterday: An Informal History of the 1920s, Harper & Row, 1931, and numerous newspaper stories.
Chapter One: “I’m the man.”
3
Locomobile: Information on the Locomobile was provided by Evan Ide, curator of the Larz Anderson Auto Museum in Brookline, Massachusetts, which displays one that belonged to General Pershing.
3
At the wheel: “Receiver for Ponzi Today,” Boston Traveler, August 17, 1920, p. 1.
5
holding copies of that morning’s: “Ponzi Has a Rival Next Door to Him,” Boston Sunday Post, July 25, 1920, p. 1.
5
On the left side of the front page: “Doubles the Money Within Three Months,” Boston Post, July 24, 1920, p. 1.
6
eclipsed two previous stories: “Dear Old ‘Get Rich Quick’ Pops out of Postal Guide,” Boston Traveler, June 9, 1920, p. 1; “Boston Man Is Sued for $1,000,000,” Boston Post, July 4, 1920, p. 1.
6
Three weeks earlier: Charles Ponzi, The Rise of Mr. Ponzi, originally self-published in 1937, republished by Inkwell Publishers, Naples, Florida, 2001. Pages cited here are from the Inkwell edition, pp. 105–6.
8
Cost of living figures are from various sources, including newspaper ads; JoAnne Olian, Everyday Fashions 1909–1920, Dover Publications, 1995; Harvard University treasurer’s statement, 1919–20, p. 174; and Kyvig.
8
would-be investors had begun assembling: Names of Ponzi investors, along with the dates and amounts they invested, as well as quotes from a few, were printed in the Boston Post during a two-week period in August 1920. Personal details about some of the investors were obtained from the 1920 census and the 1920 Boston City Directory. Also “Pearlstein Made $500—Now He Sets Good Example for All the Others Who Collected in Time,” Boston Globe, August 14, 1920, p. 2. John Collins did, indeed, add another $700 to his investment on July 26; his investments were included in the Post’s published list of investors on August 26, 1920. Names and dates of depositors were also found in numerous court documents, including Cunningham v. Brown, 265 U.S. 1 (1924), a case involving Ponzi that made it to the U.S. Supreme Court.
11
was five foot two: There are differing accounts of Ponzi’s height. Most put him between five foot two and five foot four. My decision to settle on five foot two was based on a detailed physical description contained in a “Wanted on Indictment” poster issued in 1926 by the Suffolk County, Massachusetts, District Attorney.
12
“the two million inhabitants”: Ponzi, p. 148.
12
blue steel pistol: “Ponzi Pays, Smiling, as Pi Alley Rages and Mob Beats Door,” Boston Herald, August 3, 1920, p. 1. Also Ponzi, p. 133.
12
Another pocket: “Ponzi Stops Taking Money, Awaits Audit,” Boston Globe, July 27, 1920, p. 1.
12
he stepped from the car: An account of the scene at Ponzi’s office on July 24, 1920, is contained in “Ponzi Has a Rival Next Door to Him,” Boston Post, July 25, 1920, p. 1. Although the story has no byline, the reporter’s knowledge of Italian and other details makes me suspect that it was written by P. A. Santosuosso, who also did significant later reporting on Ponzi for the Post.
12
a mellifluous tone: Although the newsreel movies made of him were silent, news accounts of the day noted the quality and tone of Ponzi’s voice and it
s almost complete lack of an Italian accent.
13
“a swirling, seething”: Mary Mahoney, “Ponzi Bothered None at All by Accounting: His Million-a-Week Business Carried Entirely on Handwritten Cards, No Ledgers,” Boston Traveler, July 29, 1920, p. 3.
14
a man named Frederick J. McCuen: “Agent’s Profit Large: McCuen Got $10,000 for 21⁄2 Days’ Commissions; Has Not Turned Back a Cent to Ponzi Estate; Left Ponzi to Engage with Rival Concern,” Boston Evening Transcript, October 26, 1922.
15
“would have made”: “Ponzi Has a Rival Next Door to Him,” Boston Sunday Post, July 25, 1920, p. 1.
15
“They had me”: Ponzi, pp. 146–47.
15
newly hired officers: Francis Russell, A City in Terror: 1919, the Boston Police Strike. New York: Viking Press, 1975, pp. 50, 112–13.
15
Several patrolmen even moonlighted: Reports of police acting as agents for Ponzi are contained in numerous stories in the Boston Post and other newspapers, as well as “Bursting Golden Bubble Wins Gold Medal,” Editor & Publisher, June 4, 1921, p. 1.
15
Captain Jeremiah Sullivan: “$100,000 Ponzi Gift to Charity,” Boston Sunday Advocate, August 1, 1920, p. 1.
15
Inspector Joseph Cavagnaro: “Reported Investor Denies Depositing with Ponzi,” Boston Herald, August 24, 1920, p. 8. The story focuses on the denial of Richard Engstrom but also mentions Cavagnaro’s refusal to comment about his investments. The inspector’s name was first revealed in a list of investors published a day earlier by the Boston Post.
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