Member-only story
“Oh, what a tangled web we weave
When first we practice to deceive.”
- Sir Walter Scott (1771–1832), Scottish novelist
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi (1882–1949), aka Charles Ponzi, was born and raised in Italy. He is known today for one thing: Ponzi’s scheme, in which a charlatan (in this case, Ponzi) robs Peter, a later investor, to pay Paul, an earlier investor.
Paul is happy, because he thinks he is experiencing promised returns, almost certainly better than he could obtain elsewhere. Peter is probably not paying attention and is therefore none the wiser.
Later, Mary becomes an investor. She learns of Ponzi from Paul at a cocktail party and is paid from what either Paul or Peter have paid (or both), and is happy. She in turn tells her friend Liz at a manicurist what a genius Ponzi is, how the returns he promised have materialized, how he’s a modern Midas. Liz tells her friend Phyllis at the hair stylist. So on it goes. The pool widens, as does the scheme.
No one bothers to examine the books. Or, if they do, they’re shown the alternate set Ponzi keeps. Those are designed to look wonderful, with multiple transactions and figures neatly printed in precise columns.
