Business Opportunities Weblog

August 31, 2003 by Dane Carlson | 1 Comment

WAHM:

We have seen the term “Illegal Pyramid” discussed, but the granddaddy of them all is called a “Ponzie”. The term “Ponzi” is derived from Charles Ponzi (nee Ponsi), who was an Italian immigrant and ran his original scams in Montreal.

In 1919, he set himself up in an office on the second floor, of a downtown bank building in Boston. Ironically, he called his company the Securities and Exchange Company, and mailed prospectuses in December of 1919. He offered a 50% return on investments in 45 days and 100% in 90 days. By the end of June, 1920, he was supposedly receiving $500,000 a day and paying out $200,000 a day. Now this was in 1920 dollars – extrapolate this to the value of today’s dollar.

Thousands of people circled the block and climbed the stairs to “invest.” So much cash flowed into his walkup office, that he had to employ 16 clerks to sort and count the money. He received so much, it was stacked in closets and stuffed into waste paper baskets.

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