Charles-Ponz, if you're not too familiar with the name, wouldn't it be a bit of an impression to switch to "Ponzi scheme"? This is considered to be the originator of all pyramid schemes today, and it was Charles Ponzi who created it.
One day in 1882, Charles Ponzi from Italy was born, for his origin, some legends say that his family is prominent, and some people say that he is from a humble background, in fact, Ponz, like many people, was born in an ordinary Jewish family, but the intelligence in his bones coupled with the social environment at that time made him unwilling to spend his life mediocre.
Decades later, his name resounded around the world, but the reason why he became famous was not very glorious.
Set foot in the Americas
In 1903, 21-year-old Ponzi came to the Americas from Europe on a long cruise, and his adventurous spirit was vividly reflected on the way, and at the cruise ship's gambling table, he lost his few entanglements early and set foot on American soil with the few dollars left. Although there is no money, Ponzi is not worried, in the world others describe, the United States is full of gold, and there are plenty of opportunities to make money, and if he wants, he can immediately have a lot of wealth.
However, "the ideal is very full, the reality is very skinny" was also vividly reflected at that time, Ponzi had no special skills other than the intelligence he thought he had, and he wandered for a long time, but he could not even find a decent job. In the years since he set foot on American soil, Ponzi has been in a state of displacement, selling his cheap labor everywhere on the east coast of the United States, living in free or cheap places with extremely poor conditions, and he has no other way to find any opportunity to "make a lot of money".
It has to be said that Ponzi is indeed smart, when he first arrived in the United States, he was not familiar with life, and the most important thing was the language barrier, but with more and more contacts, in just a few months, Ponzi has mastered local English and can skillfully use the local language to communicate with people.
"Regulars" in prison
From the United States to Canada, Ponzi has been a "frequent visitor" in prison.
Ponzi was smart, but his cleverness was never used in the right place, and the idea that he wanted to get money quickly sent him to jail several times.
When he was still working in the United States, a restaurant owner took a fancy to the smart Ponzi and recruited him to his restaurant as a waiter, Ponzi agreed, this is his first official job after coming to the United States, he has a fixed job, no longer need to wander around to do odd jobs.
However, these days did not last long, and Ponz's restless heart became restless again, and he began to take advantage of various opportunities to steal things from the store, and also took advantage of the opportunity to buy things to intercept goods and money. Often walking by the river where there are not wet shoes, as the things in the store often disappear inexplicably, the boss finally locked his eyes on him, and finally caught a current, thinking of feelings, the boss did not choose to call the police, but let him immediately roll up and leave, Ponzi had to start a wandering life again.
Soon after, Ponz, who felt that life was not satisfactory, came to Montreal, Canada. Here, he successfully applied for a job as a teller in a bank, and, with his intelligence and hard work, he was soon promoted to the position of manager. However, just when he thought he could stabilize, fate played another joke on him, and the bank he worked for turned out to be bankrupt!!
Ponz, who was again unemployed, had to continue to struggle for survival, and when all his savings were exhausted, he started to twist his brain, and with his experience working in a bank, he successfully forged a check and withdrew cash from the bank, in order not to attract attention, the check only had a few hundred dollars, however, before the money was hot in his pocket, the police found him, and he had to spend the next three years in Canadian prison.
In 1911, Ponzi was released from prison, and his reputation in prison made his life in Canada much more difficult, and he had to return to the United States.
Ponzi returned to the United States again, continuing to look for opportunities to "make a lot of money", by chance, he heard from others that helping people smuggle can make money, after understanding, he partnered with others to do this "business", this business does come with a lot of money, but high income is also accompanied by high risk, not long after, they were caught by the American police in the process of helping people smuggle immigrants, and he spent two years in prison in the United States.
Seek stability
The experience of being imprisoned many times made Ponzi notorious, and everyone around him avoided him, and Ponzi fell into loneliness.
After some reflection, Ponzi seemed to wake up, he changed his previous state of life, became positive and down-to-earth, and in the following years, he still worked everywhere, worked as a salesman, also worked as a salesman, and a variety of short-time workers, although life is still erratic and unstable, but he is active and willing to work, and slowly, people have begun to accept such a "painful change" Ponz.
It was also during this period that Ponzi ushered in love!
A girl named Ross Maria came together with Ponz, who loved the girl and was willing to work hard for her. However, at this time, Ponz's mother came forward to "destroy her relatives", and after contact with Maria, Ponz's mother, who knew what virtue her son was, did not want such a good girl to be burdened by Ponz, and she began to break them up, and she personally wrote a letter to Maria, in which she recounted Ponz's unbearable past in detail and advised her to carefully consider the major events in life.
However, after contacting the positive and optimistic Ponz, Maria believed that Ponzi had changed his ways, believing that he was hard working and responsible, so Ponz's mother's letter did not help, and in 1918, Ponzi married Maria.
Financial scams
After marriage, Ponzi was happy to be mediocre and work hard, and although life was dull, the family was happy to be in it.
However, the appearance of a letter broke this calm.
In fact, it was just a very ordinary letter, but Ponzi found a business opportunity in it, and his restless heart began to beat wildly again.
What attracted Ponzi was not the letter itself, but the notes attached to it.
At that time, European mail letters were popular with something called "European postal bills", which served as equivalent to today's "vouchers", and the sender gave the postal bill to the recipient, who could collect it or use it as a postage for reply.
At this time, Europe has long been chaotic into a pot of porridge, after the end of World War I, the European economy was in chaos, and the price standards of various countries varied greatly, and it was this phenomenon that allowed Ponzi to see business opportunities. After some deliberation, he decided to make a fortune with the "European postal bill" and the reality of price differences between countries.
Ponzi claimed that he had the means to sell postal bills bought in Europe to the United States at a high price and earn a large difference, so he "financed" the people around him, promising them a high return of 50% after 45 days. The high-profit pie immediately attracted people's attention, but people with no previous car experience did not dare to invest in it, but there were also people who tried to invest a small amount of money to "test the waters".
Of course, Ponzi had no "channels" at all, and the propaganda he made was only the beginning of his plan. In order to get people to believe him, he paid profits out of his own pocket for the first investors and agreed to the demands of those who wanted to get their principal back, returning the money to them.
Real money is the best publicity. As word came, more and more people began to believe in the "business empire" woven by Ponzi and gave Ponzi a large amount of savings to make profits. In less than a year, Ponzi received 40,000 investments totaling more than $15 million, which would amount to more than a billion by today's standards.
In fact, it is very simple to say, that is, to limit a period for all investors, in this period can not withdraw the principal, and then, he uses the money of the second batch of investors to advance the profits of the first batch of investors, and then uses the fact that the first batch of people make profits to attract the third group of investors to pay, and then uses the money of the third batch of investors to pay the profits of the previous investors. In our old saying, it is "tearing down the eastern wall to make up for the western wall".
For investors' money, Ponzi paid profits, and the rest of the big duty was squandered by him, and since the beginning of the scam, his standard of living has skyrocketed, he has lived in a mansion, driven a luxury car, and almost all he wears and wears high-end custom-made, and it is said that even his crutches are gold, and his smoking pipes are set with diamonds.
The scam crashes
In fact, a closer look at the operation of the "Ponzi scheme" is not difficult to find that when there are more and more investors, the need for more and more profits, which requires the number of subsequent investors to continue to increase, when there is a period of time when the number of investors does not increase or even decline, the operator will appear beyond the situation, over time, it will go to the point of collapse and bankruptcy.
Such was the case with Ponz's scam, which began not long after some people began to suspect it. In July 1920, a local financial expert directly published an article accusing him of "scam", and in the face of a crisis of trust that could collapse at any time, Ponzi immediately fought back and spent more than two million dollars to comfort investors.
However, at this time, Ponzi had already "done the best in the outside", and after spending a lot of money to appease investors, his capital chain broke faster, and a month after this incident, some people reported that they were deceived by Ponzi. Investors' fears eventually turned into a run, and Ponzi had almost nothing to lose, and in the face of a sudden run, he had to declare bankruptcy.
Along with Ponzi fell five other banks, and the serious consequences also brought Ponzi back to prison, where he would face five years in prison, but due to the subsequent commutation of his sentence, he only stayed for three years. However, he was immediately charged on other grounds, and he again faced a 9-month sentence, but this time he applied for bail, then changed his name and ran to Florida to hide.
Subsequent
Ponz, who was hiding in Florida, was still dishonest, and he used real estate to try to run another "Ponzi scheme", but it didn't take long for the alarmed people to recognize his scam, and he had to pay a large sum of money to escape. Then, in order not to be discovered, he jumped on a merchant ship bound for Italy to prepare for smuggling, but without success, he was "invited" back by the American police and sentenced to 7 years in prison.
In 1934, Ponzi was released, but the Americans did not intend to keep him and deported him back to Italy, and by this time his wife Maria had already completely despaired of him, and the two divorced and never saw each other again.
Returning to Italy, Ponzi was still a thief and tried to replicate the brilliant deception there, but he never succeeded, and it is said that he tried to convince Mussolini, but Mussolini, who was also a liar, saw his tricks at a glance.
In January 1949, the creator of the once-glorious century scam could only die alone in a charity hospital, without a family or friend around him, and he once had a huge fortune, and he died without a penny, even the coffin he was buried for free.