Bank Commissioner Joseph C. Allen

The Boston Globe

Attorney General J. Weston Allen

The Boston Globe

Financial journalist Clarence Barron

The Boston Globe

United States District Attorney Daniel J. Gallagher

The Boston Globe

Suffolk County District Attorney Joseph Pelletier

The Boston Globe

CHAPTER TWELVE

“MONEY MADNESS”

When the crowd drawn to 27 School Street by the Post story had gone home, Ponzi returned to Lexington to share the news of the day with Rose. There was plenty to tell. The phone was ringing ceaselessly with well-wishers and would-be investors hoping for a moment of the great man’s time.

Meanwhile, the reporters and editors at the Post were working well into the night preparing a story to run the next day, Sunday, July 25. The magnitude of what was happening around the corner from the newspaper’s offices had caught Grozier, Dunn, and their reporters off guard. For a journalist, the only things worse than being surprised are being scooped and being wrong, and the Post might soon experience both. The city’s other papers might be preparing follow-up stories of their own, and one might develop information significant enough about Ponzi’s operations, negative or positive, to wrest front-runner status from the Post. The clear goal for Grozier and Dunn was to remain in control of the Ponzi story without overreaching.

To strike that balance, the story in the Boston Sunday Post was built around a straightforward account of the excitement at the Securities Exchange Company on Saturday. It recounted the opening of the rival business down the hall that claimed to match Ponzi’s rate of return; the ballyhoo man trying to lure away Ponzi’s customers; Ponzi’s anger at his competitors; and the excitement of his investors. The headline, in the lead position on the top right side of the page, was more than twice the size of the one on Saturday:

PONZI HAS A RIVAL NEXT DOOR TO HIM

The headline spanned five of the eight columns across the top of page 1 and was accompanied by five photographs: a portrait of Rose and Imelde Ponzi outside the Lexington home on page 1, and on an inside page photos of the home itself, Ponzi alighting from his Locomobile with an armed guard, a “head shot” of Ponzi, and the scene at 27 School Street.

Beyond the report of what had happened a day earlier, from the crowds to Ponzi’s summoning of police against the rival Old Colony Foreign Exchange Company, the Sunday story dripped with skepticism. Ominously for Ponzi, it began with the report that a federal investigation “is being pushed with vigor.” The story added no specifics but breathlessly told readers that Boston’s federal prosecutor, United States District Attorney Daniel J. Gallagher, “has set in motion all the government machinery to learn whether Ponzi is telling the truth when he asserts that he is able to pay such enormous profits by juggling of International Reply Coupons in Europe.”

But if the Post wanted its readers to doubt claims that seemed to be too good to be true, the paper was sending a very mixed message. A few pages past the report on Ponzi’s business appeared the headline TO MAKE OLD WOMEN YOUNG. The story described the amazing work of Dr. Serge Veronoff and his wife and assistant, Madame Evelyn Veronoff, who had recently arrived in America from Paris to promote the good doctor’s success in implanting young chimpanzee glands in aged humans “to make them vigorous and hale again.” The reporter, Marguerite Mooers Marshall, guilelessly asked, “Will women be made young in the sense of recovering the beauty and charm of youth, of banishing their wrinkles and gray hair?” Madame Veronoff answered: “It is not inconceivable that fresh, lovely facial tissues should take the place of those that are worn and lined—that even the color of the hair should be changed.” Marshall was sold. “It will be a wonderful thing for women!” she wrote.

Meanwhile, the other Boston papers were silent about Ponzi on Sunday. The closest any of them came was an item buried in the Boston Sunday Herald about the finances of Lawrence millworkers that blandly mentioned how some put their money “in various other forms of ‘get-rich-quick’ speculation that promises a maximum of return in a minimum of days.” The Herald, the Globe, and Boston’s other papers were paying more attention to an attempt to raise bail for Bartolomeo Vanzetti and the sensational murder trial of dashing undertaker Byron M. Pettibone, accused of poisoning his wife with strychnine so that he could marry a beautiful nurse.

Even though Ponzi remained overlooked by the other papers, the combined effect of back-to-back page 1 stories in the Post was to instantly make him the most talked-about, sought-after man in New England. People began calling Ponzi “a wizard of finance.” Like most overnight sensations, he had spent decades laying the groundwork for his triumph, and now he wanted to milk it for all it was worth. He would get no rest this Sunday, and that was fine with him.

The telephone began ringing at daybreak. Western Union delivery boys—“Telegram for Mr. Ponzi!”—soon followed. Ponzi basked in the attention: “Every one of them anxious to get on the right side of me. Because I was a multimillionaire. I received more congratulations than a president-elect!” The Post photo of Ponzi’s house was accompanied by a caption placing it on Slocum Road, so the quiet lane became a destination for a steady stream of motorists taking Sunday drives in the country.

A Post reporter dropped by the house and ran into Ponzi’s lawyer, Judge Frank Leveroni.

“As a judge of the Juvenile Court,” the reporter asked, “do you think it a proper thing for a concern of that kind to accept loans from fourteen-year-old boys?” It was a clear reference to Frank Thomas, the errand boy in short pants who had praised Ponzi to a Post reporter a day earlier on his way to invest ten dollars.

“Mr. Ponzi,” Leveroni replied, “has given me assurance that his promises to pay are good. I believe him, and on that score I consider it perfectly proper for him to accept loans tendered by anyone.”

Two men came to the house with a plea: “Will you pose for us?” They were movie men certain that the public would clamor to see newsreel footage of the elegant financier, his family, and their gracious home. Ponzi was only too happy to oblige. He, Rose, and his mother, dressed in their Sunday best, ambled back and forth in front of the house while the cameraman shot several hundred feet of film.

Out of view of the camera, Ponzi and Leveroni strategized on how best to respond to the threat posed by Ponzi’s imitator, the Old Colony Foreign Exchange Company. Stealing Ponzi’s customers by opening an office down the hall at 27 School Street was bad enough, but Ponzi’s real fear was that his rival would bring additional heat down upon him just as he was racing to go legitimate. And if government officials took a hard look at the men behind Old Colony, “none of them had either the courage or the ability to hold their own in a match of wits. They would have been exposed in no time.” Ponzi could not tell Leveroni or anyone else how he knew, but he was certain the outfit was a rob-Peter-to-pay-Paul scam. That meant Old Colony “constituted for me a greater menace than all of the government agencies put together.”

To himself, Ponzi rationalized the difference between his Securities Exchange Company and copycat upstarts: “Perhaps my activities were not entirely within the law,” he allowed. “But my intent was honest. I was in a critical position and I had fallen into it without any intention to do wrong. Now that I was in it, I was trying my hardest to pull myself out of it, without hurting my investors. The means I was resorting to, in order to swim out of the hole, might not have been sound and might not have been entirely legitimate. But I felt that the end justified the means, and the end, my purpose, was not dishonest.”

He had been paying agents of the Pinkerton National Detective Agency to provide security for himself and his business. Now he had a new job for the agency’s Boston manager: Find out all you can about every man and woman associated with Old Colony. “Follow them everywhere—to China, if necessary,” he ordered. “Spare no expense. I want you to land those people in jail.” He instructed the agents to send one copy of their findings to him and another to the county prosecutor, District Attorney Joseph Pelletier. Ponzi was angling for a two-bank shot to eliminate the threat: quickly knocking Old Colony out of business while positioning himself as a friend of justice.

Ponzi also spent part of the day making plans to open a new Boston office. The hordes on Saturday convinced him that he had outgrown 27 School Street, so he made arrangements to move to a second-floor office next door to Hanover Trust on Washington Street, even closer to the Post building.

When he crawled into bed alongside Rose that night, Ponzi was exhausted. Afterward, he remarked: “That Sunday was the busiest day in all my life I ever put in doing nothing!”

While one Post reporter spent part of Sunday in Lexington watching Ponzi soak up the limelight, other Post reporters were working overtime trying to nail him. Boston’s other newspapers were still ignoring the story, so Richard Grozier and city editor Eddie Dunn sought to press their paper’s advantage—but carefully. One step was to shore up the Ponzi reporting staff. Joining P. A. Santosuosso was Herbert L. Baldwin, a bookish Harvard graduate selected for his knack with financial stories and features. The previous Saturday, Baldwin had written a lively profile of one Lucius Dodge, a man who had meticulously recorded nearly every penny he had spent during the previous thirty years.

The next step was to advance the story. But it was Sunday, and nothing much was happening beyond the commotion at Ponzi’s house. The Securities Exchange office was closed, as were the government offices managing the investigations. Not wanting to lose momentum, the Post staff engaged in the time-honored journalism practice of consulting an outside expert. They did not have to look far.

Clarence Walker Barron was a Bostonian who, as the Post put it, was “recognized internationally as among the foremost financial authorities of the world.” At sixty-five, Barron was called “the father of American financial journalism.” Abundantly bearded, with bright blue eyes, and carrying 330 pounds on a five-foot-five frame, Barron looked like a cross between a sea captain and Saint Nicholas. Born in the city’s North End in a stone house covered with vines and overrun with cats, he was the son of “Honest Henry Barron,” a teamster who worked at the wharves and warehouses of Commercial Street. Some of his earliest memories were of tugging at the dress of his mother, Elana, as she stood at the door of their house talking to peddlers and tradesmen about President Abraham Lincoln, slavery, and the latest news. By fifteen, he had resolved to become a newspaperman and had taught himself stenography, which he put to use with a temporary job on the Boston Daily News. By twenty-one he had found work at the Evening Transcript, where he gravitated to financial reporting and soon inaugurated the paper’s financial section, which he boasted was responsible for increasing circulation by 15 percent.

In 1887, at thirty-two, he founded the Boston News Bureau, having concluded that Boston’s State Street, at the time a rival to New York’s Wall Street, needed financial news delivered more often than once with the morning papers and once with the evening papers. For the exorbitant sum of a dollar a day, Barron promised the city’s business elite that he would provide them with news as fast as he could report it, printing his stories himself on a hand-fed press in a basement office, then dispatching two messenger boys to deliver the goods. Barron was a gifted writer and an intrepid reporter. His rough-printed handbills were soon essential reading for the bankers, brokers, and business leaders of Boston. In 1902 he expanded to New York by buying control of the Wall Street Journal and its parent, Dow Jones & Company.

His success allowed him to keep a permanently reserved suite at the Ritz-Carlton in New York and to buy a grand town house on Beacon Street with views of the Charles River, a yacht named the Hourless, and a huge, seaside country home he called “The Oaks” in the South Shore town of Cohasset. He also was a gentleman farmer, raising prized Guernsey cows on a perfect swath of pasture and willingly selling their milk at a loss to nourish Boston’s sick children.

A demanding taskmaster, thorough in his reporting, he was unafraid to wade into unpopular territory if he considered something unjust. This was the same Barron who had successfully pleaded the case of Ponzi’s old Atlanta prison mate Charles Morse, the “Ice King.” Nevertheless, Barron would caution his reporters, “If you must fight, pick only worthy adversaries.” He instantly placed Ponzi in that category: Invited by the Post to give his opinion of Ponzi’s business, Barron emptied both barrels.

“No man of wide financial or investment experience would look twice at a proposition to take his money upon a simple promise to pay it back with a 50 percent increase in three months,” Barron said. He zeroed in on Post stories from that morning and the day before that said Ponzi had placed his profits from the enterprise in bank stocks, real estate, government bonds, and other conventional investments.

“If Mr. Rockefeller, the richest man in the world, should offer even 50 percent for money and be found to be putting his own money into 5 percent bonds, there would not be much money offered to him by financial people,” Barron scoffed.

Barron understood fluctuating currency rates better than most, and he acknowledged that “there is now probably opportunity for people to deal in a small way under these postal arrangements so as to make money out of the fall in foreign exchange. But it is unreasonable to ask anybody to believe that any large amount of money can be so invested.”

Even if it were possible, Barron said, it would be “immoral” because it would be profiting at the expense of a government. “When a man gets money from the government without performing a service,” he said, “it is just the same as when a man takes money from an individual without performing a service for that money.”

The Post printed Barron’s attack the next morning, Monday, July 26, as its lead story at the top of the front page, under a headline more cautious than Barron’s comments: QUESTIONS THE MOTIVE BEHIND PONZI SCHEME; the subhead added, “Barron Says Reply Coupon Plan Can Be Worked Only in Small Way.” Still, the message the Post was sending its readers was clear, and the story began with the ominous claim that the foreign countries where Ponzi was supposedly operating were expected to report to United States authorities by the next day. But if Grozier, Dunn, and their staff expected pronouncements from the Zeus of State Street to dissuade Ponzi investors, they were in for a shock.

When Ponzi arrived at work on Monday morning, School Street was teeming with people desperate to trust their money to the Securities Exchange Company. It was as if Barron had endorsed the idea as foolproof. The street was so jammed police closed it to traffic; only two cars were allowed to pass: Ponzi’s and Mayor Peters’s.

A conga line of would-be investors, four abreast, snaked around the block from the City Hall Annex, up City Hall Avenue, down School Street, and into the Niles Building. Ponzi counted a half dozen mounted policemen in the street, then found more than a dozen others afoot keeping order inside the building. When Ponzi stepped from his Locomobile, he was greeted by three cheers. After the din died down, Ponzi called back, “And three groans for the Post!” The crowd answered with laughter and more cheers. Eddie Dunn, the Post’s city editor, had walked around the corner from his office to watch the spectacle. “Pigs being led to the slaughter,” he said before returning to work.

Ponzi did not entirely disagree with Dunn, but he rhapsodized about what he saw and sensed: “The air was tense with ill-suppressed excitement. Hope and greed could be read in everybody’s countenance, [or] guessed from the wads of money nervously clutched and waved by thousands of outstretched fists! Madness, money madness, the worst kind of madness, was reflected in everybody’s eyes!”

Ponzi was at once exhilarated yet oddly repulsed. It struck him as an “exhibition of reckless mob psychology, entirely too susceptible to the fatal spell of misguided or perverted leadership!” But the notion that he was solely responsible for the “misguided or perverted leadership” was soon replaced by intense satisfaction.

“I was the realization of their dreams,” he exulted, his grandeur growing with each new thought. “The idol. The hero. The master and arbiter of their lives. Of their hopes. Of their fortunes. The discoverer of wealth and happiness. The ‘wizard’ who would turn a pauper into a millionaire overnight!” He became intoxicated by the sight of the madding crowd and became certain it spelled the success he had always imagined: “Nothing could stand in the way of the most complete achievement of my ambitions. I had won!”

It was difficult to argue. By noon he would take in several hundred thousand dollars from all his branches—in his recollections, he rounded it off to one million. The new office he opened that morning around the corner on Washington Street collected more than ten thousand dollars an hour during its first three hours of operation. All told, in July alone Ponzi had taken in nearly $6.5 million, from more than twenty thousand investors, for an average of $325 each. In the remarkable seven months since it had opened for business, the Securities Exchange Company had amassed thirty thousand investors and $9.6 million. All Ponzi had to do to keep them satisfied was to pay them nearly $15 million in return.

But for all his excitement, all his satisfaction about his success, Ponzi knew it could not continue. That reality became inescapable after he waded through the crowds outside 27 School Street, walked around the corner to the Hanover Trust, and slipped into Henry Chmielinski’s private office for a moment of peace. He had been so busy he had yet to read the morning papers. Ponzi picked up a copy of the Post and scanned Barron’s comments—the first public criticism of him and his company. He was outraged and, although he would not show it, afraid. He knew the disparaging words of a financial legend would goad public officials into immediate action, even overreaction. “The situation was especially dangerous,” Ponzi concluded, “because a man in public office generally runs amok the moment he becomes the target of printed criticism. Under the spur of what he believes to be a public opinion, he is apt to do almost anything. Except keep quiet.”

“Within the day, within the next hour or so, some proceedings might be instituted against me,” Ponzi told himself. “Without any doubt, I had a battle on my hands.” His biggest fear was a court injunction that would shut him down immediately, short-circuiting his plans to switch businesses and go straight. With his trademark flair, Ponzi decided to go on the offensive and do what his enemies least expected.

Ponzi reached for the phone in Chmielinski’s office and told the operator to call the United States district attorney, the Massachusetts attorney general, and the Suffolk County district attorney—the federal, state, and local authorities Ponzi considered his greatest threats. “Tell them I want to talk to them,” Ponzi said. “Give me the calls as they come in.”

First to answer was Dan Gallagher, the United States district attorney for Massachusetts. A graduate of Boston College, Gallagher was an undistinguished lawyer and local leader of the Knights of Columbus who had been appointed federal prosecutor by Woodrow Wilson. He was forty-seven, married with four children, with an impassive, doughy face and wavy light-brown hair parted in the middle.

After exchanging pleasantries and mentioning the Post story, Ponzi got down to business. “It occurs to me,” he said, “that it is rather unfair for them to criticize public officials for their alleged laxity. Personally, I resent the criticism because of its implications. I am going to demand a showdown. I am going to offer you and the other officials an opportunity to investigate my business. Would you be willing to join the attorney general and district attorney at a conference with me, in order that the details of such an investigation may be arranged?”

Gallagher immediately agreed—a target of inquiry inviting himself to a prosecutor’s office was about as common as a mouse chasing a cat. Ponzi got the same positive response from Boston’s county prosecutor, Suffolk District Attorney Joseph Pelletier, a friend and political ally of Gallagher’s. Judging from his past history, Pelletier’s most likely motive for agreeing to see Ponzi was to gauge whether he could squeeze money from the financier.

Pelletier was forty-eight, a lumbering ruin of a man, physically and morally. Like Gallagher, Pelletier was a Boston College grad—Pelletier had won the college debate prize a year before Gallagher did. Though his prosecutorial domain was limited to Boston and its surrounding suburbs, Pelletier occupied a small role on the national stage as supreme advocate of the Knights of Columbus. But Pelletier adhered to none of that organization’s high-minded ideals. He had grown thoroughly corrupt during his decade as district attorney. The price he charged to quash an indictment varied by the crime, but his real specialty was blackmail and extortion. His favorite fleece was the sexual entrapment con known as the badger game. A wealthy man, usually married, would be lured into a compromising position with a comely young woman in a hotel room, apartment, or taxicab. Just when things were getting interesting, another man would burst in and claim to be a policeman, the woman’s husband, her father, or a Justice Department agent, depending on which variation of the scheme had been decided upon. The wealthy pigeon would be informed that he faced public exposure, an alienation-of-affection suit, and criminal charges. He would be advised to hire a politically connected lawyer. That lawyer was none other than Daniel Coakley, who had proved so useful to former mayor James Michael Curley in blackmailing John “Honey Fitz” Fitzgerald in 1913. Coakley, who had served as Pelletier’s campaign manager, also was an intermediary between Pelletier and Curley when the district attorney chose not to prosecute then-councilman Curley.

When the pants-around-the-ankles mark had paid Coakley an exorbitant retainer, Coakley would pretend to use his adroit legal mind and close relationship with District Attorney Pelletier to make all charges, lawsuits, despoiled women, and angry husbands miraculously disappear. Pelletier would take a cut of the money from Coakley, and the game would begin again with a new victim. Pelletier and Coakley had even enlisted Daniel Gallagher in at least one shakedown before Gallagher became a federal prosecutor. Coakley ran the same racket with the district attorney of a neighboring county. Devoted to Rose, Ponzi was immune to sexual shenanigans. But given what Pelletier had read about his millions in the Post, Ponzi might be the district attorney’s biggest score yet.

While old pals Gallagher and Pelletier welcomed a joint conference, Attorney General J. Weston Allen declined. He preferred to go it alone rather than join forces with two Boston College buddies from the lower social and political classes. Ponzi decided to spend the rest of the day meeting with each one separately, starting with Pelletier and making Allen wait until last.

With his publicity man, William McMasters, in tow, Ponzi made the three-block walk from the bank, past City Hall, to the granite mountain that was the Suffolk County Courthouse on Pemberton Square. En route, Ponzi looked more like a man going to a cotillion than to the gallows, having dressed that morning as sharply as ever in white flannel trousers, silk shirt and socks, white bucks, and a blue coat with a handkerchief poking from the breast pocket. A large diamond pin glinted from the center of his cravat, and a silver-topped walking stick was tucked under his arm. He felt as good as he looked; he believed he was entering the darkness just before dawn. It would take every ounce of his intelligence, creativity, and moxie, not to mention split-second timing and preternatural coolness under fire. But where another man would have seen threats to his livelihood and freedom, Ponzi saw opportunity. This was the moment to begin making his big move.

Ponzi and McMasters entered the courthouse through the Great Hall, walking past marble statues and under a five-story vaulted ceiling adorned by frescoes. They entered Pelletier’s office at eleven o’clock and made themselves comfortable. Pelletier began the meeting brusquely, criticizing Ponzi over a false rumor that Pelletier was a Ponzi investor to the tune of twenty thousand dollars. Given his nature, it was entirely possible that, for all his protests, Pelletier mentioned that figure to signal to Ponzi where the bidding for his services should begin. Ponzi made what McMasters considered a cringing apology, then shifted the conversation to say that he was happy to cooperate with authorities despite the fact that no criminal or regulatory complaints had been made against him or his business.

After explaining the postal reply coupon business, overlooking the fact that he was in no such business, Ponzi maneuvered Pelletier into an extraordinary agreement: He would open the books of the Securities Exchange Company to an auditor to be selected by Pelletier and the other authorities. The auditor would establish the extent of his liabilities, after which Ponzi’s only requirement would be to prove that he had enough assets to meet them. If Ponzi could do that, he would be declared solvent and all investigations would cease. Ponzi still had not figured out how he would gather enough assets to offset his liabilities, but that would come later. At the moment, what he needed most was to stay in control of his business and buy some time.

Pelletier could see no downside to the deal—it would look as though he had the public interest at heart. He had no proof of wrongdoing by Ponzi, so his leverage was limited. This was probably the best deal Pelletier was going to get, and both he and Ponzi knew it.

Then Ponzi sprang an ingenious trap, a risky but potentially viable way for him to begin his transition out of the postal coupon business for good.

“Mr. District Attorney,” Ponzi said, “it occurs to me just now that it might be an impossible task for an auditor to determine my liabilities, if I should continue to issue notes every day throughout the investigation.”

“I guess it would be, at that,” Pelletier agreed, taking the bait. “Couldn’t you stop issuing those notes?”

“I could,” Ponzi said, as though the thought had never occurred to him. “But I haven’t had the time to consider whether it would be expedient for me to do so. However, the suggestion has an appealing feature. Because it offers me the opportunity to spike certain insinuations which are being made by the press, I will do it.”

“You will stop issuing notes?” Pelletier asked. “When?”

“Right now,” Ponzi said. “May I use your phone?”

Ponzi called his School Street office, and Lucy Meli answered. He told her to post signs inside and outside their office announcing that, effective immediately, the Securities Exchange Company would take no new deposits but would continue redeeming matured notes with the promised 50 percent interest. Worried investors who did not want to wait for their notes to come due could receive refunds of their initial investments, without interest. Ponzi instructed her to wire or phone the same instructions to all their agents and subagents.

From the courthouse Ponzi and McMasters took the short walk to 85 Devonshire Street, the offices of the United States district attorney. They spent the next two hours in Gallagher’s ninth-floor office with the federal prosecutor and two postal inspectors who had been making regular visits to Ponzi’s office. The conversation was largely a repeat of the meeting with Pelletier, and Gallagher agreed to consider Ponzi’s offer to abide by the findings of a single auditor selected by investigators.

At one point, Gallagher asked why Ponzi had continued to invite the public to invest with him when he had already amassed a personal fortune.

“I don’t need the money, but eventually I will need the people,” Ponzi said.

Gallagher asked why and Ponzi said, “I don’t know. It is possible I may want to run for office.” Surprised, Gallagher asked Ponzi if he was a citizen. “Almost,” Ponzi replied, when in fact he had never taken out naturalization papers, knowing that his past prison terms might well disqualify him.

Ponzi also spun for the federal prosecutor a tale of his plans for a profit-sharing banking system and hinted at his shipping company idea. He told Gallagher that he intended to make Boston the largest import and export center in the country. Ponzi mentioned casually that he anticipated profits of $100 million, though he added magnanimously that he intended to keep only $1 million for himself and to spend the rest on philanthropy.

Next they headed toward the State House to see Attorney General Allen, but on the way Ponzi wanted to look in on what was happening at 27 School Street. Word was just getting out that Ponzi would accept no new deposits. Scores of nervous investors had begun lining up to cash in their notes well before their maturity dates. Ponzi knew the storm of withdrawals would intensify by the next morning, after news of his stoppage was spread by reporters and by a notice he’d agreed to place on the front page of the Post. As a precaution, Ponzi called the Pinkertons to provide added crowd control.

The meeting with the attorney general and his staff took nearly three hours, with no resolution. He was not under oath, so Ponzi tossed out a welter of confusing, exaggerated figures and claims, from how he operated his business to which banks he used to move money in and out of the country, all of which a stenographer duly recorded. Through it all, J. Weston Allen remained uninterested in the auditing deal that Ponzi had made with Pelletier and was likely to be accepted by Gallagher. Instead, the attorney general seemed intent on pressing ahead with his own investigation.

When Ponzi left the State House, a clutch of reporters was waiting for him. No longer would the Post be alone on the Ponzi story; competition had arrived en masse. Official action had been taken, and now Ponzi and the Securities Exchange Company were fair game. Not only were reporters from several other Boston papers there, the news had also attracted stringers for out-of-town papers, including the New York Times. But if the reporters expected their prey to be frightened or flummoxed by his ordeal, they found the opposite. He merrily waved a slip of paper showing his $1.5 million certificate of deposit in the Hanover Trust Company and airily promised that he had more than enough money to meet all obligations.

“He was the same Ponzi of the day before,” one reporter marveled, “just as debonair, just as dapper, just as smiling.” When the reporters shouted questions to Ponzi, McMasters dragged him away.

“I can’t say anything now—I’m hungry,” Ponzi called breezily over his shoulder.