Ponzi's Scheme
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He merrily waved a slip of paper: “Ponzi Stops Taking Money, Awaits Audit,” Boston Globe, July 27, 1920, p. 1.
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“He was the same Ponzi”: “Ponzi Closes; Not Likely to Resume,” Boston Post, July 27, 1920, p. 1.
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“I can’t say anything now”: Ibid.
Chapter Thirteen: “Master of the situation”
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refining a daring survival plan: Ponzi, pp. 157–58. In his autobiography, Ponzi says he came up with the idea to “borrow” Hanover Trust’s assets on the ride home the night before. He no doubt was still refining the plan en route to work that morning.
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“master of the situation”: Ibid., p. 157.
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“Every time I refunded the principal”: Ibid.
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“He wasn’t likely to make any trouble”: Ibid.
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“unless I happened to have”: Ibid.
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“The investigation would have ended right there”: Ponzi, p. 158.
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its lead headline triumphantly predicting: “Ponzi Closes; Not Likely to Resume,” Boston Post, July 27, 1920, p. 1.
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PUBLIC NOTICE: Paid notice on page 1 of the Boston Post, July 27, 1920.
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Ponzi suspected that the officials: Ponzi, p. 156. Ponzi’s chronology is slightly compressed on this point. He places the withdrawal of the police as occurring the afternoon of July 26, immediately after he struck his deal with Pelletier. The Post more credibly reported that the police disappeared the next day. See “Million Is Paid Back by Ponzi,” Boston Post, July 28, 1920, p. 1.
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Ponzi told Dunn that the newspaper: Kenny, p. 196, and Ponzi, pp. 160–61. Neither Kenny nor Ponzi specifies when Ponzi made his threat to Dunn, but it stands to reason Ponzi would have done so immediately upon seeing the story as he marshaled his resources to confront the run of withdrawals.
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A lawyer for one of his investors: “Suit Filed Against Ponzi, but Quickly Withdrawn,” Boston Evening Globe, July 27, 1920, p. 2; “Withdraws Bill to Enjoin,” Boston Evening Transcript, July 27, 1920, p. 5; “Million Is Paid Back by Ponzi,” Boston Post, July 28, 1920, p. 1; Ponzi, pp. 159–60. Biographical information on Alton Parker from 1920 U.S. Census.
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“one of those lawyers”: Ponzi, p. 160.
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Dan Coakley: Beatty, pp. 100, 137–39, 265; “Daniel H. Coakley, Dead at 87; Long Political Figure,” Boston Herald, September 19, 1952; “Dan Coakley Has Been Teamster, Conductor, Reporter and Politician,” Boston Traveler, September 30, 1921; Albert Hurwitz, “The Ponzi Bubble,” Boston Sunday Herald Magazine, August 30, 1970, p. 13.
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Ponzi adored Coakley: Ponzi, p. 160.
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There was no letup: The scene at Ponzi’s office on July 27, 1920, was taken from multiple sources, including: “Million Is Paid Back by Ponzi,” Boston Post, July 28, 1920, p. 1; “Ponzi Has World Scheme,” Boston Evening Transcript, July 27, 1920, p. 1; “Exchange ‘Wizard’ Is Paying Claims,” New York Times, July 28, 1920, p. 13; “Ponzi Pays Money Back to Hundreds,” Boston Globe, July 28, 1920, p. 1; and “Six Women Faint in Crowd at School St. Building Seeking to Redeem Notes,” Boston Herald, July 28, 1920, p. 1. Elements of the scene also came from a photograph found in the files of the Boston Globe stamped July 27, 1920, and captioned “Crowd Outside of Ponzi’s Office, 27 School Street.” A note written in red pencil ordered that the photo be saved for Ponzi’s eventual obituary.
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Perhaps hoping to reassure: “Ponzi Has World Scheme,” Boston Evening Transcript, July 27, 1920, p. 1.
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arrangements to take over: “Exchange ‘Wizard’ Is Paying Claims,” New York Times, July 28, 1920, p. 13.
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“a case of ‘heads I win’: Ponzi, p. 160.
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At the end of the day: “Million Is Paid Back by Ponzi,” Boston Post, July 28, 1920, p. 1.
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Ponzi quietly took a precaution: Annual Report of the Massachusetts Commissioner of Banks, 1921, pp. vii–viii.
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To allay his concerns: Ibid.
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Ponzi turned to a waiting Post photographer: Photo captioned “Charles Ponzi as He Appeared Yesterday,” Boston Post, July 28, 1920, p. 20.
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bigger news in the Post: Front page of the Boston Post, July 28, 1920.
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another cutting attack by Clarence Barron: “Seeking Source of Big Profits,” Boston Post, reprinted from the Boston News Bureau, July 28, 1920, p. 20.
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the swarm of people: “Ponzi Puts Wealth at $24,000,000; Pays Out $750,000 More,” Boston Herald, July 29, 1920, p. 1.
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“Bankers and businessmen can easily understand: “Exchange ‘Wizard’ to Fight Bankers,” New York Times, July 29, 1920, p. 15.
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Ponzi upped his estimate: “Ponzi Puts Wealth at $24,000,000; Pays Out $750,000 More,” Boston Herald, July 29, 1920, p. 1.
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“Now please don’t think that I’m boasting”: “Exchange ‘Wizard’ to Fight Bankers,” New York Times, July 29, 1920, p. 15.
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“As I told Ponzi the other day”: “Uncle Sam to Get the Facts of Ponzi’s Case,” Boston Post, July 29, 1920, p. 1.
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Ponzi relieved the tedium, hunger, and thirst: “Exchange ‘Wizard’ to Fight Bankers,” New York Times, July 29, 1920, p. 15.
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James Francis Morelli: “Receivers Searched Bank Officers’ Boxes,” Boston Globe, September 4, 1920. Also, copies of several of Morelli’s poems were preserved in the library files of the Boston Globe.
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an association called the Ponzi Alliance: “Exchange ‘Wizard’ to Fight Bankers,” New York Times, July 29, 1920, p. 15.
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half to three-quarters of a million dollars: “Uncle Sam to Get the Facts of Ponzi’s Case,” Boston Post, July 29, 1920, p. 1.
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sign written cheerily in crayon: “Ponzi Makes Big Profits from ‘Run,’ ” Boston Daily Globe, July 29, 1920, p. 1.
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company outing at a resort: “Mass of Ponzi’s Papers Found on Junk Heap May Give New Clue to Assets,” Boston Herald, September 2, 1920, p. 1.
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banquet where he was the guest of honor: “McNary Hailed Ponzi as ‘Financial Genius,’ ” Boston Post, August 15, 1920, p. 12.
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William McNary: Congressional biography, found online at http://bioguide.congress.gov/scripts/biodisplay.pl?index=M000584.
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Calvin Coolidge: “Uncle Sam to Get the Facts of Ponzi’s Case,” Boston Post, July 29, 1920, p. 1.
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the Post’s first editorial on Ponzi: “It Cannot Last,” Boston Post, July 29, 1920, editorial page. Editorials were unsigned, but this was clearly the work of Richard Grozier, who wrote it either himself or in collaboration with another writer. Regardless, it was fully his responsibility as the paper’s acting editor and publisher, and he certainly knew that any resulting cost would be borne by him.
Chapter Fourteen: “Even his cows couldn’t give milk.”
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The door to the Bell-in-Hand: “Ponzi to Start ‘Bank’ in New York,” New York Times, July 30, 1920, p. 1.
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time with his new lawyer: “Pelletier Begins to Audit Ponzi’s Books,” Boston Herald, July 30, 1920, p. 1.
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a large revolver lying menacingly: Ibid.
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One young man, sweat dripping: Ibid.
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Just after the four o’clock closing time: “Ponzi to Start ‘Bank’ in New York,” New York Times, July 30, 1920, p. 1.
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When the inevitable question a
rose: Ibid.
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“And then I found my inspiration”: “Exchange ‘Wizard’ to Fight Bankers,” New York Times, July 29, 1920, p. 1.
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McMasters seemed intent on antagonizing them: “Officials Balked by Ponzi Puzzle,” Boston Post, July 30, 1920, p. 1.
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his old nemesis: “Governor Acts in Ponzi Case,” Boston Evening Globe, July 29, 1920, p. 1.
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an investigation of Ponzi’s rival: “Officials Balked by Ponzi Puzzle,” Boston Post, July 30, 1920, p. 1.
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a tantalizing bit of information: Ibid. Ponzi, pp. 161–62.
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EXTRA: “Coupon Plan Is Exploded,” Boston Post, July 30, 1920, p. 1.
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The Post also turned to ridicule: “Plenty of Opportunity,” editorial cartoon printed in the Boston Post, July 30, 1920, p. 11.
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The Boston Traveler ran a sports column: “Old Scout Jim Compares Babe Ruth with Financier Ponzi,” Boston Traveler, July 30, 1920.
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quoted a North End banker: “Ponzi Pays $1,450,000 in 3 Days,” Boston American, July 30, 1920, p. 1.
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Ponzi’s secret formula for wealth: “N.Y. Man Tells How Ponzi May Get His Millions,” Boston American, July 30, 1920, p. 2.
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In the Friday edition: “Both Barron and Ponzi Give Talk,” Boston Post, July 31, 1920, p. 5.
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“Ponzi or anyone else”: Ibid.
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“From the several articles”: Ibid.
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the temperature approaching eighty degrees; Ponzi stepped outside: “May Enter Politics,” Boston Post, July 31, 1920, p. 5; “Ponzi Gives Aid to Federal Agents,” New York Times, August 1, 1920, p. 10. The temperature comes from a chart on the front page of the Boston Post, July 31, 1920.
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gleefully told reporters: “Federal Officials Begin Ponzi Inquiry,” New York Times, July 31, 1920, p. 2; “May Enter Politics,” Boston Post, July 31, 1920, p. 5.
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“I am not a Red”: “Ponzi Gives Aid to Federal Agents,” New York Times, August 1, 1920, p. 10.
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Pelletier withdrew from the probe: “Allen Guiding Ponzi Inquiry,” Boston Daily Globe, July 31, 1920, p. 1; “Federal Officials Scout Ponzi Claims,” Boston Post, July 31, 1920, p. 1; “Ponzi Sues C. W. Barron for $5,000,000; Pelletier Drops Case; U.S. Audit Begins,” Boston Herald, July 31, 1920, p. 1; “Federal Officials Begin Ponzi Inquiry,” New York Times, July 31, 1920, p. 2; “Ponzi Gives Aid to Federal Agents,” New York Times, August 1, 1920, p. 10.
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a meek-looking fellow named Edwin L. Pride: “Starts Audit of Ponzi’s Books,” Boston Evening Globe, July 30, 1920, p. 1; “Audit on Ponzi Accounts,” Boston Traveler, July 31, 1920, p. 1; “Federal Officials Scout Ponzi Claims,” Boston Post, July 31, 1920, p. 1.
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Ponzi joined Pride for a meeting: “Federal Officials Scout Ponzi Claims,” Boston Post, July 31, 1920, p. 1.
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“There can be but one result.”: Ibid.
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impossible for Ponzi to have made a fortune: “Washington Authorities State He Could Not Possibly Have Made Huge Fortune Dealing in Reply Coupons,” Boston Post, July 31, 1920, p. 1.
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scolded Attorney General Allen: “New Hampshire Taking a Hand in Ponzi Case,” Boston Sunday Post, August 1, 1920, p. 1.
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tapping Ponzi’s telephones: Albert Hurwitz, “The Ponzi Bubble,” Boston Sunday Herald Magazine, August 30, 1970, p. 13. As an assistant attorney general on the Ponzi case, Hurwitz had firsthand knowledge of the telephone taps.
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Allen also sent one of his assistants: “Atty Gen Allen Trying to Get Interview with Ponzi,” Boston Globe, August 2, 1920, p. 2; Albert Hurwitz, “The Ponzi Bubble,” Boston Sunday Herald Magazine, August 30, 1970, p. 13.
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Barron seconded the Post’s conclusion: “Dazzling Future with Limousines Rolling on Coupon Carpet,” Boston Herald, August 1, 1920, p. 8. Reprinted from the Boston News Bureau, which used the headline “ ‘Ponzied’ Finance.”
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Boston American was crowing: “Wife Tells of Ponzi’s Plans,” Boston American, July 1, 1920, p. 1.
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Mr. and Mrs. Charles Ponzi: “Ponzi Promises $100,000 to Home for Children,” Boston Herald, August 1, 1920, p. 1; “New Hampshire Taking a Hand in Ponzi Probe,” Boston Sunday Post, August 1, 1920, p. 1.
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Ponzi got more good publicity: “Ponzi the New Emancipator,” Boston Herald, August 1, 1920, p. 8.
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Ponzi spent a relatively quiet Sunday: “Ponzi Investigation Goes on Day and Night,” New York Times, August 2, 1920, p. 3; “Film Men Keep Ponzi Busy; Ponzi Home Mecca of Curious; Ponzi Takes Flight,” Boston Post, August 2, 1920, p. 6.
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With the cameras rolling: Muriel Caswall, “Ponzi Enjoys Himself Before the Camera,” Boston Sunday Post, August 8, 1920, p. 39. Although the story was published on August 8, it describes a scene that took place a week earlier.
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Ponzi had an inspiration: “Film Men Keep Ponzi Busy; Ponzi Home Mecca of Curious; Ponzi Takes Flight,” Boston Post, August 2, 1920, p. 6.
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He was forty-six, with a young wife: 1920 U.S. Census data on William McMasters and family.
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He called Richard Grozier: “McMasters Loses Both the Ponzi Suits,” Boston Globe, February 11, 1921.
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Grozier offered McMasters the fabulous sum: Kenny, p. 196; “McMasters Loses Both the Ponzi Suits,” Boston Globe, February 11, 1921.
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The story, under McMasters’s byline: “Declares Ponzi Is Now Hopelessly Insolvent,” Boston Post, August 2, 1920, p. 1.
Chapter Fifteen: “You discovered the money!”
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Anxious investors began gathering in Pi Alley: “Great Run on Ponzi Continues Until Office Is Closed for Day,” Boston Post, August 3, 1920, p. 1; “Mobs Flock to Ponzi’s Office,” Boston Post, August 3, 1920, p. 2; “Ponzi Absolutely Denies He Is Insolvent—Alleges Malice,” Boston Evening Globe, August 2, 1920, p. 1; “All Demands Met by Ponzi, Investigators Still at Sea,” Boston Daily Globe, August 3, 1920, p. 1; “Big Run on Ponzi, but All Get Cash,” New York Times, August 3, 1920, p. 15; Hundreds Paid by Ponzi,” Boston American, August 2, 1920, p. 1; “Ponzi Pays, Smiling, as Pi Alley Rages and Mob Beats Door,” Boston Herald, August 3, 1920, p. 1.
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Ricardo Bogni: “Sub-Agent Is Sure State Ruined Ponzi,” Boston Traveler, November 2, 1922; “Defence to View Ponzi Documents,” Boston Post, November 2, 1922.
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De Masellis gathered his belongings: “Ponzi Manager Returns $10,000,” Boston Post, August 26, 1920, p. 1; “Coakley to Testify in Ponzi Court Fight,” Boston Traveler, August 26, 1920, p. 1.
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twirling his snappy walking stick: “Ponzi Absolutely Denies He Is Insolvent—Alleges Malice,” Boston Evening Globe, August 2, 1920, p. 1.
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“My hat is in the ring”: “Great Run on Ponzi Continues Until Office Is Closed for Day,” Boston Post, August 3, 1920, p. 1.
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Ponzi responded true to form: Ponzi’s response to reporters on August 2, 1920, was pieced together from the following: “Great Run on Ponzi Continues Until Office Is Closed for Day,” Boston Post, August 3, 1920, p. 1; “Mobs Flock to Ponzi’s Office,” Boston Post, August 3, 1920, p. 2; “Ponzi Absolutely Denies He Is Insolvent—Alleges Malice,” Boston Evening Globe, August 2, 1920, p. 1; “All Demands Met by Ponzi, Investigators Still at Sea,” Boston Daily Globe, August 3, 1920, p. 1; “Big Run on Ponzi, but All Get Cash,” New York Times, August 3, 1920, p. 15; “Hundreds Paid by Ponzi,” Boston American, August 2, 1920, p. 1; “Ponzi Pays, Smiling, as P
i Alley Rages and Mob Beats Door,” Boston Herald, August 3, 1920, p. 1; “Storm Ponzi for Money,” Boston Traveler, August 2, 1920, p. 1.
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“as calm and undisturbed as a mill pond”: “Ponzi Absolutely Denies He Is Insolvent—Alleges Malice,” Boston Evening Globe, August 2, 1920, p. 1.
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an impassioned poem: James Francis Morelli, “Chas. Ponzi Says: ‘My Dog Never Leads Me.’ Who Is the Dog?” An undated copy of the poem was found in the Ponzi clip files of the Boston Globe.
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Gary Johnson of Houston wrote: “All Demands Met by Ponzi, Investigators Still at Sea,” Boston Daily Globe, August 3, 1920, p. 1.
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Ponzi wandered outside: The scene is told in several papers, but the best version is in “All Demands Met by Ponzi, Investigators Still at Sea,” Boston Daily Globe, August 3, 1920, p. 1. The Globe spells her name Percheck, but that is almost certainly a phonetic spelling, as Mrs. Perchek, according to the reporter, was illiterate. When asked to sign her name, she could only make a mark, which Ponzi had one of his clerks cosign as a witness.