The Ponzi scheme collapses
Image of the mansion Charles Ponzi bought
Although Charles’s idea to make money from the IRC pricing discrepancies was a good one in theory, it was not practically feasible due to the sheer volumes of stamps he would need to sell to make the profits needed to pay back his investors. In August 1920 the scam began to fall apart when The Boston Post began to investigate the Securities Exchange Company. They published articles explaining that the “investment” scheme was problematic. This ultimately led to investors panicking and requesting for the return of their monies.
Investors trying to pull out their money soon became the least of Charles’s worries. The articles written about the Securities Exchange Company also initiated formal criminal investigations of Charles and his company. Investigations proved that Charles was running a fraudulent business. In August 1920, he was subsequently arrested and charged with numerous counts of mail fraud. Investigations showed that he owed his investors over seven million dollars. He pleaded guilty to all the charges and spent fourteen years in prison.
Charles Ponzi had a dream to live a luxurious life. His quest for wealth led him on a dark path of living a lie. His Ponzi scheme left numerous people out of pocket and many may not have been able to ever recover from the scam. He popularized a scam that brought financial turmoil to future generations. Even in today’s world, people have continued to fall victim of other people who follow Charles’s business model to con the masses of their hard earned cash.
Despite the havoc Charles caused, his victims may be able to find solace in the fact that Charles died a very poor man in 1949.
Written by JustAnnet
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