As long as Rose remained by his side, Ponzi kept smiling, even after his business closed and his legal troubles began.
The Boston Globe
EPILOGUE
Ponzi settled quickly into his new home: Cell 126 at the Plymouth County Jail, a concrete monolith with a million-dollar view of the Pilgrim landing site at Plymouth Harbor and, beyond that, Cape Cod Bay. He returned to the jailhouse routine familiar to him from Montreal and Atlanta: wake at dawn, dress in prison grays, work in the prison library, lights out at 8:30 P.M. Still, he retained his refined tastes, ordering engraved stationery—“Charles Ponzi, Plymouth, Mass.”—as if the jail were his summer home by the sea.
A few days after Ponzi’s guilty plea, a New York Times editorial offered a remarkably balanced epitaph on the affair. First, it poured on the condemnation, decrying him as “an egregious falsifier and a wholesale betrayer of simple confidences.” But the Times recognized that there was more to Ponzi. “There was something picturesque, something suggestive of the gallant about him, and it is almost possible, though not quite, to believe that he was as credulous as his victims and deceived himself as much as he did them,” the Times mused. “Perhaps the disinclination for being harsh in characterizing Ponzi is due to lack of any sympathy for those whom he robbed. . . . They showed only greed—the eagerness to get much for nothing—and they had not one of Ponzi’s redeeming graces.”
When New Yorkers went to the polls a few weeks later, election officials came across the names of two unexpected write-in candidates for state treasurer: John D. Rockefeller and Charles Ponzi. It was the company he had always hoped to keep.
Rose became a regular visitor to the prison, though she needed to get lifts and ride the trolley because authorities confiscated the Locomobile. She filled her lonely days caring for Ponzi’s mother and their Lexington home. “The house was never as clean and tidy when we had servants around as it is now,” she preened. Soon the job would get easier; bankruptcy trustees moved to seize and sell the elegant house to help defray the losses of thousands of clamoring creditors. The sale included an auction of all furnishings except a bedroom set the Ponzis had brought from their Somerville apartment. Ponzi’s erstwhile chauffeur, John Collins, stood among the auction crowd that trampled the lawn on Slocum Road. He won the bidding for the music rolls from the Ponzis’ player piano, as a memento of the glory days.
Some of Ponzi’s other friends and associates had problems of their own to keep them busy. Several Ponzi agents not only had to worry about customers to whom they had sold notes, they also had to hire defense lawyers. Although Ponzi’s guilty plea ended the federal investigation, that did not satisfy Attorney General J. Weston Allen. He insisted that the state seek punishment, too. Allen filed charges against Ponzi and several of his top agents, including his brother-in-law Rinaldo Boselli; cousins John A. and John S. Dondero; Henry Neilson; Harry Mahoney; and Ponzi’s old Montreal cellmate, extortionist Louis Cassullo. All but Cassullo turned themselves in.
The last time anyone saw Cassullo, in August 1920, he was cleaning out one of Ponzi’s safe-deposit boxes in the midst of the furor. Some said he fled to Italy. Wherever he went, Cassullo was never heard from again. Another of Ponzi’s old Montreal pals was not so successful in avoiding prosecution. The attention surrounding Ponzi prompted authorities to renew their search for Antonio Salviati, who had skipped out on larceny charges relating to the Zarossi bank failure. Salviati was arrested in late August 1920 in New York, living in a cheap hotel under the alias Dongello Buccini.
In the aftermath of Ponzi’s plunge, furniture dealer Joseph Daniels learned that turnabout is fair play. When the profits were rolling in, Daniels had demanded that he be treated as Ponzi’s partner, filing the million-dollar lawsuit that had triggered Ponzi’s downfall. After Ponzi’s arrest, Daniels sang a different tune: He insisted he was wholly unconnected to the Securities Exchange Company. Eventually he was forced to disgorge the money Ponzi had paid him to settle the lawsuit, leaving him no richer from his Ponzi adventure. Ponzi’s imitators fared even worse. The copycats from the Old Colony Foreign Exchange Company were shut down immediately after Ponzi’s arrest and soon found themselves behind bars.
The banks where Ponzi did business came under closer scrutiny than ever. In late September, the Cosmopolitan Trust Company followed Hanover Trust into failure. Bank Commissioner Joseph Allen had begun focusing on Cosmopolitan when its panicked depositors had made heavy withdrawals in the wake of Hanover Trust’s collapse. When he looked closely, Allen found that Cosmopolitan president Max Mitchell and his cohorts were so reckless with depositors’ money that they would have embarrassed even Ponzi. Oddly enough, just a week before Allen seized the bank, Mitchell had publicly hailed the bank commissioner for his “fairness, skill and courage.” The Fidelity Trust Company failed three days after Cosmopolitan, in part because of unsound practices but largely because of a run of withdrawals by nervous depositors. Simon Swig’s Tremont Trust also suffered a run. Several months later it failed, too. Swig, Mitchell, and Henry Chmielinski, president of Hanover Trust, not only lost their banks; all three ended up in bankruptcy court.
Joseph Allen remained bank commissioner until 1925, seeing Massachusetts through the worst banking crisis in decades. He left the state’s financial institutions on solid, solvent footing and took a job as vice president of the American Trust Company. He returned to Springfield and resumed the quiet life he craved. Calvin Coolidge, who by then had ascended to the presidency, remarked that of all the appointments he’d made as Massachusetts governor, his choice of Allen made him the most proud.
Ponzi and his former publicity agent, William McMasters, continued their feud in court. Despite the money he was paid for the Post exposé, McMasters sued Ponzi for $4,067.50 he claimed he was still owed for his publicity work. Outraged, Ponzi pressed forward from jail with his lawsuit seeking return of fourteen hundred dollars he had paid McMasters for ads that were never placed. Ponzi gained a small measure of satisfaction when he won both suits. McMasters went on to a career writing fiction, including novels and plays, one of which, The Undercurrent, played on Broadway in 1925. He ran unsuccessfully for governor in 1936, and taught journalism at Mount Ida College in Newton, Massachusetts, before his death in 1968.
Clarence Barron continued to revel in his role as a living legend of financial journalism, though the years after his clash with Ponzi were marked by a losing battle with his already expansive girth. He became a regular visitor to the celebrity weight-loss clinic at the Battle Creek Sanitarium in Michigan, where he died, at age seventy-three, in 1928. His death deprived him of covering the biggest financial news story of the century, the stock market crash of 1929.
One year after Ponzi’s arrest, his lawyer Dan Coakley and Suffolk County District Attorney Joseph Pelletier faced the music for their long-running sexual extortion scheme. Both were disbarred along with a third member of their ring, Middlesex County District Attorney Nathan Tufts. Pelletier died soon after in what was widely believed to be a suicide triggered by his humiliation. Federal prosecutor Daniel Gallagher, whose closeness to Pelletier tarred him by association, faded from public view.
Meanwhile, although disbarred, the irrepressible Coakley successfully defended himself against criminal charges related to the extortion scheme. He ran unsuccessfully for mayor of Boston, but bounced back to win election to the Executive Council, which confirmed gubernatorial appointments and performed other vague duties. That cushy job ended in 1941 when Coakley was removed from office for selling pardons to criminals. He died, unrepentant, in 1952.
Attorney General J. Weston Allen never achieved his dream of higher office. He ran for governor as a Republican in 1922 but was defeated by Channing Cox, lieutenant governor under Calvin Coolidge. Allen later served as a special adviser in the trial of Sacco and Vanzetti and in several appointed positions for the U.S. Justice Department. He spent the last days of his life as a psychiatric patient at McLean Hospital, where he died in 1941. His top assistant on the Ponzi case, Albert Hurwitz, was named acting district attorney in Suffolk County after Pelletier’s removal. Later, Hurwitz became a leader in Jewish philanthropic circles, and his one hundredth birthday was declared Albert Hurwitz Day in Massachusetts.
In the aftermath of Ponzi’s arrest, Boston newspapers told a handful of stories of people who had lost money in the mania, though reporters’ interest in individual victims was scant and short-lived. The stories were written without including investors’ names, almost certainly to spare them further embarrassment. A veteran who had twice been gassed in the Great War told how he had hoped to parlay his seven hundred dollars of savings into enough to move to Arizona, where the government had opened a health clinic. Instead he was stuck in Boston with a persistent cough. A Revere woman described how she had mortgaged her home for eight thousand dollars and lost it all. A young couple lamented having trusted Ponzi with twenty-six hundred dollars that they had intended to send to relatives in Italy.
After the collapse, hundreds of Ponzi investors swamped the Massachusetts State House, some weeping and others crying out for blood, to register their names with authorities in hopes of getting at least some of their money back. Yet some among them were philosophical. A tailor told a reporter how his hunger for what he called “unearned increment” caused him to give Ponzi eight hundred dollars against his wife’s wishes: “ ‘Jake,’ she said, ‘you know yourself you never had any luck. Why, if you were to bet on the sun coming up in the morning, it would be just your luck to have Gabriel blow his horn before daylight. You keep your money in the bank.’ ” He ignored his wife. “I gave it to Ponzi. Of course he failed. It’s just my luck.”
On the other side of the ledger, a handful of Ponzi winners—those who’d collected their 50 percent interest before the collapse—turned over the money voluntarily. First among them was Joseph Pearlstein, who had learned about the Securities Exchange Company from Rose Ponzi when he’d sold her luggage. “This is dirty money,” Pearlstein said. “I don’t want it.”
For the most part, Ponzi’s investors suffered their losses, licked their wounds, and moved on with their lives. For the next ten years they received small reminders of their gullibility and greed each December. Trustees appointed by the bankruptcy court sent small holiday-season payments to Ponzi’s creditors until the money ran out and the case closed at the end of 1930. All told, twenty thousand people who had held Ponzi notes at the time of the collapse received refunds equal to 37.5 percent of their investments.
The aftermath of Ponzi’s story kept the Post and its reporters busy for years, not that there was any shortage of other news. Just a month after Ponzi’s fall, the nation learned that players on the Chicago White Sox had taken bribes to lose the 1919 World Series in a scheme hatched by a Boston gambler, Joseph “Sport” Sullivan. The Post covered it as closely as any Boston newspaper, though Herb Baldwin was distracted by a series of immensely popular stories he was writing about the fictitious exploits of the newsroom cat, known as Von Hindenburg, “Hindy” for short.
Before moving on to the cat beat, Baldwin had a brief encounter with Ponzi. During an arraignment in federal court, Ponzi caught sight of the reporter who had gone to Montreal in search of his past. “You did a fine job on me,” Ponzi admitted to Baldwin. “If it hadn’t been for that story in the Post, maybe things would have been a lot different for me today.” Baldwin eventually rose to night city editor of the Post before taking a public relations job with the Boston & Maine Railroad. He died in 1973.
Eddie Dunn remained city editor of the Post for thirty-five years. When he left in 1953 to open a public relations firm, the Boston Herald hailed him as “one of the ablest editors in his craft.” Twice during his Post tenure he refused appointment as Boston police commissioner, preferring the city room to the squad room. Though he had helped to engineer Ponzi’s downfall, Dunn had a soft spot for his old foe. They exchanged letters now and then, and more than once Ponzi urged Rose to seek out Eddie Dunn if she ran into any problems. When he died in 1961, Dunn was remembered as a friend to three presidents, Theodore Roosevelt, Calvin Coolidge, and John F. Kennedy, and as the city editor who’d overseen the Post’s Ponzi coverage.
P. A. Santosuosso left the Post a year after the Ponzi story to launch a weekly newspaper called the Italian News. He chose a sly location for his new business, one he knew would be available—196 Hanover Street, the empty office of Ponzi’s North End branch. On the tenth anniversary of the Italian News, Santosuosso was presented with a purse of gold coins by Boston’s Italian-American community. He gave the money to the Home for Italian Children, the orphanage that had never received the $100,000 donation promised by Ponzi.
Richard Grozier remained in daily control of the Post while his father continued his convalescence. Clear proof that Edwin Grozier had placed his newspaper in steady hands came in May 1921, when the Post’s investigation of Ponzi was awarded the Pulitzer Prize gold medal for public service, the highest honor in American journalism. The occasion marked the first time the Pulitzer—endowed by Edwin Grozier’s mentor at the New York World—had gone to a Boston newspaper.
The Post made news of the prize its lead page 1 story on May 30, 1921, under a headline as big and bold as the ones it had used nine months earlier to assail Ponzi. The story, rich in self-congratulation, recounted the long odds and lonely road the Post had faced at the start of its campaign, including the support Ponzi enjoyed from public officials, police, other newspapers, and, most of all, readers. The story told how the paper had been swamped with letters of protest in the early days of its Ponzi coverage, and how many staffers in the Post newsroom feared that taking on Ponzi would mean the paper’s death. Finally, the story detailed Richard Grozier’s unwavering “courage and fine sense of newspaper honor” and hailed him for having “stuck to his guns when the outlook was dark indeed.”
The young acting editor tried to deflect the attention. He ordered his reporter to write that, as far as Richard Grozier was concerned, he “had merely been carrying out the general instructions which had been given to him by his chief, the editor and publisher, Mr. Edwin A. Grozier, his father.” Richard then heaped praise on Post editors and reporters for “securing evidence of Ponzi’s past career in Montreal and elsewhere which pricked the bubble and exposed the fraud.”
In a signed editorial two days later, Edwin Grozier set the record straight. He bestowed upon his son the approval Richard had long craved, doing so in the way they both knew best: in black ink on a newspaper page. Edwin Grozier disclosed that he had been away from Boston and incommunicado during the entire episode, and that his managing editor had also been absent the previous summer from Newspaper Row.
“The entire office, editorial, business, and mechanical, was in the sole charge and responsibility of my son, Mr. Richard Grozier,” Edwin Grozier wrote with evident pride. “It is to him personally, assisted by an exceptionally loyal staff, that the entire credit . . . was due.” In closing, Edwin Grozier offered a rare, awkward window into his emotions: “We encounter in this life many difficulties and many compensating pleasures, and not the least of the latter in my case is to publicly give credit where credit is fairly due in this important and conspicuous case.”
Edwin Grozier’s homage to his son was ratified soon after when Richard Grozier was profiled as a newspaper hero on the cover of Editor & Publisher, a highly regarded trade magazine. It said the judges of the Pulitzer had honored Richard for “public spirit, courage, and persistence.” The deans who had tried to kick him out of Harvard must have been surprised.
Edwin Grozier never regained his health. For the next three years, he was confined to his home while Richard ran the Post. When Edwin Grozier died in 1924, his will named Richard as the paper’s new owner and offered some final fatherly words of advice: “I urge my son, in whose integrity and ability I have full confidence, to conduct The Boston Post . . . not as a mere money-making enterprise, but primarily and zealously in the interests of the people of Boston and New England.”
In his first few years as editor and publisher, Richard exceeded his father’s high expectations, continuing the Post’s aggressive news coverage and driving circulation up above 600,000 copies a day—50 percent more than at the height of his father’s reign. In 1929, when he was forty-two, Richard married a beautiful secretary at the Post, Margaret “Peggy” Murphy. In quick succession they had two sons, Richard Jr. and David. But in 1933, Peggy Grozier died giving birth to a daughter, Mary. Richard Grozier fell into a paralyzing depression from which he never recovered.
He hired a nurse, Helen Doherty, to care for his children, and he married her the next year. But it did little to mend what his children called his broken heart. He became increasingly housebound, overseeing the Post from his Cambridge mansion. He read to his children, taught them chess, and occasionally he would take walks with his sons around the Cambridge reservoir. But as the years passed he ventured out less and withdrew further into his sadness. When depression finally consumed him, his family had him committed to McLean Hospital, where he died in 1946. He was fifty-nine. Of all the tributes he received, it is likely Richard Grozier would have been most touched by a plaque presented to his widow by the printers in the Post’s composing room, the very men he was most concerned about losing money during Ponzi’s run. Inscribed on the plaque were expressions of sorrow and “deep gratitude for the fairness and generosity of Mr. Grozier as an employer and our admiration for his qualities as a man.”
Richard Grozier’s long, slow decline took a heavy toll on the newspaper. By the early 1950s, the Post was struggling to survive. Joseph P. Kennedy, the father of a young U.S. senator with presidential aspirations, offered to buy the Post and the Globe, but only if he could own both. The Globe was not for sale, and so the Post limped further into debt. The paper eventually fell into the hands of an arrogant, shady operator named John Fox, who never paid the Grozier family the $4 million he had promised. By the mid-1950s, nothing was left of the paper Edwin and Richard Grozier had built. The Post published its last edition on October 4, 1956.
The Boston Globe bought the Post’s library and its name, lest someone try to capitalize on the paper’s glory days. Indeed, during the thirty-five years between the Post’s winning the Pulitzer for the Ponzi story and the paper’s demise, it held an enviable distinction: No other Boston newspaper was awarded the gold medal for public service.
While Ponzi was serving his federal prison term, Massachusetts authorities pressed forward with plans to try him on state charges. Ponzi fought the efforts, claiming double jeopardy, but the state prevailed. In October 1922 he was back in court, his small frame thinner and his dark hair grayer than in his heyday. But he still had style, flashing his grin for reporters and sauntering into court in a blue serge suit, a dark tie, and gray spats. His fine clothes notwithstanding, Ponzi was too broke to hire a lawyer, so he acted as his own advocate, in a strange way fulfilling his mother’s dream that he would follow their ancestors into the legal profession. To the dismay of his prosecutors, Ponzi proved remarkably able, grilling witnesses for the state and charming the jury. The crux of his defense was simple yet clever: A promise of profits is not larceny, it is merely a promise; when it comes to investments, promises may be broken when circumstances change. Rose was a courtroom fixture, leaning over the rail each morning to kiss her husband and wish him luck.
For six weeks, the all-male jury—a leather sorter, a rubber worker, an engineer, and assorted other workingmen—heard the extraordinary story of Ponzi and the Securities Exchange Company. To hedge their bets, the prosecutors decided to try Ponzi on only a dozen of the indictments against him, six for larceny, five for being an accessory before the fact to larceny, and one for conspiracy to commit larceny. Among the star witnesses were disbarred lawyer Dan Coakley and Ponzi’s former bookkeeper Lucy Meli. Ponzi gently guided her through an account that roamed from their early days in the School Street office to the chaos of August 1920. Meli had faced some legal threats as well, but they had been dropped after it became clear that she had suffered investment losses of her own as a result of her blind faith in Ponzi.
Rose took the stand at one point, weeping as she told her version of the meteoric rise and fall. Ponzi testified in his own defense, regaling the jury with his life story and insisting that he had done just what he had advertised, trading in International Reply Coupons purchased in Europe by his agent Lionello Sarti. Under questioning he acknowledged that he had no proof, claiming that he had destroyed all correspondence with Sarti. One of Ponzi’s investors, Carmela Ottavi, was called to the stand by prosecutors but ended up benefiting Ponzi. During Ponzi’s cross-examination, she declared firmly that she still believed in him, despite her losses. He thanked her.
By the end of the trial, the jury was sold. Ponzi and his co-defendants were all found innocent. When the foreman called out the final “not guilty,” Ponzi bowed his head and began to sob. Rose rushed to him and threw her arms around his neck. Together they wept for joy. Massachusetts officials dropped the cases against his agents, but they were not finished with Ponzi—with the Post egging them on, prosecutors immediately began making plans for trial on the remaining ten indictments.
In the meantime, Ponzi was returned to the Plymouth jail to complete his federal sentence. While there, he faced surgery at Massachusetts General Hospital for the painful ulcers that had tormented him for years. Doctors warned him that he might not survive, so he sat in his cell and wrote Rose a passionate letter to be opened only in case of his death. “I do hope that I may live,” he wrote, “because as long as I have you, life seems sweet regardless of our present sorrows. . . . I am leaving you forever, but I am bringing with me a most wonderful recollection of your wonderful self, and I am leaving with you kisses of lips which will close with your name firmly impressed upon them, and with a smile of eternal love for you.” Ponzi survived the surgery, and Rose eventually opened the letter. She saved it among her treasures, along with several dozen other letters he wrote to her over the years.
Though Ponzi’s health improved after the surgery, even more trouble lay ahead.
In August 1924, Ponzi was released from the Plymouth jail, having served nearly four years of his five-year federal sentence, with the remainder waived for good behavior. He spent several months as a free man, enjoying his reunion with Rose. But by November, the state had him back on trial, this time on five of the remaining indictments. Once again Ponzi acted capably as his own lawyer, and the case ended with the jury hopelessly deadlocked. Still the state was not finished. A third trial on state charges was held in February 1925, and Ponzi’s luck ran out. The state prosecutors had learned from their errors at the earlier trials, and they had honed their responses to Ponzi’s arguments. When the jury foreman pronounced the verdict “guilty,” Ponzi took the news stoically. Rose burst into tears. As she left the courtroom she collapsed, injuring herself when her head slammed against the stone floor.
Several months later, Ponzi was sentenced to seven to nine years in state prison as “a common and notorious thief.” The sentence was stayed pending Ponzi’s appeal, and he remained free on bail. Granted that reprieve, Ponzi began plotting his comeback, determined to repay all his creditors and regain his fortune.
For a few months he earned money doing a vaudeville act—a corny reprise of the impromptu stage show he had done at Keith’s Theater—but he knew the real money was in large-scale investments. In September 1925 he and Rose headed south to a huckster’s version of paradise, joining the tail end of the Florida land boom.
To avoid unwanted scrutiny, he at first adopted the alias Charles Borelli. But his ego could not quite stand the anonymity. He named his company the Charpon Land Syndicate—“Charpon” being an abbreviation of his real name. When Ponzi’s true identity was revealed, he decided to make the most of his notoriety. He offered investors a better return than from the Securities Exchange Company: 200 percent in sixty days. The promise of such immense profits was based on Ponzi’s far-fetched plan to sell ten million tiny lots of property around Jacksonville.
With money borrowed from his few remaining friends, Ponzi began the scheme by buying a hundred acres of land for forty dollars an acre. The property was in an area Jacksonville officials called “desolate and lonely,” and at least some of it was waterlogged. Ponzi named it the Rose Maria tract after his wife. The Oreste and Imelde tracts would follow to honor his parents. He divided each acre into twenty-three puny lots he planned to sell for ten dollars each. That meant every acre would yield a profit of $190, or nearly 500 percent of Ponzi’s original investment. Ponzi also intended to sell shares in his new company for investors more focused on profits than land. But his impossible dream was short-lived. Goaded into action by newspaper reports, Florida and Massachusetts officials quickly shut down the Charpon Land Syndicate. Ponzi beat charges of land fraud but was sentenced to a year in jail for violating Florida’s securities laws. He was allowed to remain free pending an appeal.
Two months later, in June 1926, a dejected Ponzi decided he could not bear a return to prison. With Massachusetts authorities clamoring to bring him north to begin his seven- to nine-year prison term, and the yearlong Florida sentence looming as well, he disappeared. Eluding a nationwide manhunt, Ponzi made his way to Tampa, where he hoped to land a berth on an Italian freighter at the port. For several days he waited, and then he spotted a ship fittingly called the Sic Vos Non Vobis. The ship’s name translates from the Latin as “Thus not for yourselves,” a phrase used by the poet Virgil to decry those who profit unduly from the labors of others.
Ponzi called himself Andrea Luciana and signed aboard as a waiter and dishwasher, relying on skills he had honed during his early days in America. The ship left Tampa bound for Houston, and during the trip Ponzi disguised himself by shaving his head, growing a mustache, and outfitting himself in overalls and a sailor cap. Before he’d left, he’d added to the intrigue by faking his suicide, asking friends in Jacksonville to place some of his clothing on a beach with a note apologizing to his wife and mother for taking his life. But Ponzi made the mistake of revealing his identity to a shipmate, and word spread to a deputy sheriff named George Lacy. The deputy followed the ship to Galveston and then New Orleans, where Lacy confirmed Ponzi’s identity and placed him under arrest. The only good that came of it for Ponzi was the five hundred dollars he earned by selling an account of his capture to the Post.
Flanked by authorities, Ponzi prepares for extradition to Boston after his flight from justice and arrest in Texas.
Boston Public Library, Print Department
Ponzi appealed to Calvin Coolidge, sending the president an urgent telegram claiming persecution and proposing his own deportation to avoid more prison time: “May I ask your excellency for official or unofficial intervention in my behalf? The Ponzi case has assumed the proportions of a national scandal fostered by the state of Massachusetts with the forbearance of the federal government. But, for the best interests of all concerned, I am willing to submit to immediate deportation. Will your excellency give his consideration of the eventual wisdom of my compromise?” Coolidge ignored the plea.
Desperate, Ponzi sent a cable to Italy appealing to the dictator Benito Mussolini. No help there either, making Ponzi one of the rare topics on which Coolidge and Mussolini agreed. Ponzi was returned to Texas to await extradition, a process he fought for months. While Ponzi battled, Rose accompanied Imelde Ponzi home to Italy, where she wanted to spend her final years.
Finally Ponzi was returned to Boston in February 1927 to begin his sentence in the Massachusetts State Prison in Charlestown. His prison job was sewing underwear. Ponzi sought a pardon in April 1930 when he learned that his mother was on her deathbed, but the request was denied. Ponzi maintained that Imelde Ponzi died without knowing the trouble he was in, but that was certainly wishful thinking.
When the final payment to Ponzi’s creditors was made in December 1930, Time magazine took note of it. “Glittering in the archives of financial fraud is the record of Charles Ponzi, duper extraordinary, personification of quick riches,” the item began. It went on to recount his aliases and his occupation—“thief”—and to claim that in his prime Ponzi slept in lavender pajamas. Ponzi wrote a lengthy, jocular reply from his cell, which the magazine gleefully printed. First he set the record straight on his sleepwear, insisting that he never wore purple nightclothes, “nor pink ribbons on my night shirt. Fur coat and overshoes on extremely cold nights have been my limit.” In his letter, Ponzi mused about challenging the editor of Time to a duel, then thought better of it. “You know,” he wrote, “I like you in spite of your jabs because you have given me an opportunity of spending an hour writing this letter. If you come over to Boston after I am out, I have a damned good mind to buy you a drink. Two if you can stand the gait. Will you libate with me?”
Ponzi was released on parole in February 1934 with seventy dollars he had earned in prison. He declined the customary free suit of clothes given to departing prisoners. Outside the walls, he stepped into a clutch of reporters. Balding and thicker around the middle, he was still Ponzi. “It’s great to see you boys,” he said, posing for photos. Though Ponzi’s debt to society was paid, U.S. officials had still not forgiven him.
After completing his state prison term, Ponzi is escorted up the gangplank of S.S. Vulcania for his deportation to Italy in 1934.
Boston Public Library, Print Department
Ponzi had never obtained citizenship, so federal authorities moved immediately to deport him. Ponzi, Rose, and Dan Coakley pleaded for mercy and a pardon, even enlisting Ponzi’s old nemesis publicity man William McMasters. At one point Ponzi went to the Post, hoping to persuade his former pursuers that he had suffered enough for his misdeeds. On his way into the newsroom, Ponzi walked past the Pulitzer Prize on display. He strolled over to Eddie Dunn’s desk. The two shook hands and talked quietly about the old days. But there was nothing Dunn or anyone else could do. Appeals to the governor for a pardon were denied. Ponzi was deemed an undesirable alien.
On October 7, 1934, Ponzi’s three-decade American adventure came to an end. At times crying softly, the fifty-two-year-old Ponzi was escorted to the S.S. Vulcania for deportation to Italy. He carried a suitcase filled with newspaper clippings, wore a new brown suit Rose had bought him, and in his pocket carried five hundred dollars she had given him. “I am not bitter,” he told reporters. “I have met with much kindness. . . . I’m afraid I’m not a credit to this country but I hope to do better in the future. . . . I went looking for trouble and I got it, more than I expected.” Asked what he would do differently if he were just arriving in the United States as a young man, he said ruefully, “I’d cut my hands off. And my head, too, I guess.” When a reporter asked about Rose, Ponzi’s eyes brimmed with tears. “No, she won’t be here,” he said. “I saw her for the last time last night.”
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 the 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.