In Search of History

Mr. Ponzi and His Scheme (2000x8)

: 18, 1999

Charles Ponzi became known in the early 1920s as a swindler in North America for his money-making scheme. He promised clients a 50% profit within 45 days, or 100% profit within 90 days, by buying discounted postal reply coupons in other countries and redeeming them at face value in the United States as a form of arbitrage. In reality, Ponzi was paying earlier investors using the investments of later investors. His scheme ran for over a year before it collapsed, costing his "investors" $20 million. While this type of fraudulent investment scheme was not originally invented by Ponzi, it became so identified with him that it now is referred to as a Ponzi scheme.