Thursday, 25 February 2010

Real estate scam is not new; Ponzi started earlier

The absurd, but nonetheless pernicious, real estate scam that now infects your country, is not at all new.
After running a multi-million dollar 'international postal coupon investment" scam in Boston Mass, Charles Ponzi was charged with 86 counts of mail fraud. On November 1st. 1920, he pleaded guilty to a specimen count before US federal Judge Clarence Hale, who declared before sentencing:
'Here was a man with all the duties of seeking large money. He concocted a scheme which, on his counsel's admission, did defraud men and women. It will not do to have the world understand that such a scheme as that, can be carried out ... without receiving substantial punishment.'
Ponzi got 5 years in federal prison, but he was released after less than 4 years only to be indicted on 22 Mass. State charges of larceny. Ponzi sued, claiming that he had made a plea bargain in 1920 and as a federal prisoner he could not be tried by a State. The case, Ponzi v. Fessenden, went to the US Supreme Court, which ruled that plea bargains on federal charges have no standing regarding State charges. The Court also ruled that Ponzi was not facing double jeopardy because Mass. was charging him with larceny, while the federal charge had been mail fraud (even though both charges related to the same swindle).
In October 1922, Ponzi was tried on the first 10 larceny counts. Ponzi, who was officially insolvent, acted as his own attorney and, using the same sophistic arguments, and incomprehensible mathematical presentations, which he'd used to deceive his many victims, the jury found him innocent on all charges. Ponzi was then tried on the five other counts, but, this time, the jury was so baffled that it failed to reach a decision. Ponzi was finally found guilty at a 3rd. trial. He was given 7 to 9 years in prison as 'a common and notorious thief.'
Ponzi (an Italian) never acquired American citizenship even though he'd lived in the United States since 1903. Federal officials failed to have him deported as an undesirable alien in 1922. Amazingly, he was released on bail after appealing his Mass. State conviction. Ponzi immediately absconded to the Springfield section of Jacksonville, Florida where, in September 1925, he launched the 'Charpon (Charles Ponzi) Land Syndicate' offering 'investors' tiny parcels of land (which were actually flooded) and offering '200% profits in 60 days.' Ponzi was indicted by a grand jury in February 1926 and charged with violating Florida trust and securities laws. He was found guilty on the securities charges, and sentenced to a year in State prison. Ponzi again appealed and was released after posting $1500. He ran to Tampa Florida, shaved his head, grew a moustache and tried to skip the USA on a merchant ship to Italy. The ship, however, docked in New Orleans. Ponzi was arrested and sent back to Mass. where he served 7 additional years in prison.
US government investigators were unable to place an accurate figure on how much money Ponzi had actually stolen. They were also unable to trace exactly where most of it went.
David Brear

1 comment:

Tex said...

Nice story, Brear. LOL