And Who Was Ponzi?

(CBS)  With Ponzi schemes so much in the news, it's time to give Founding Father Charles Ponzi his due.

Ponzi (1882- 1949) hatched his scheme in Boston in the days after World War One, and his gimmick was the International Reply Coupon, a way of pre-paying foreign postage.

Because of a currency exchange quirk, Ponzi's Coupon - bought at a low price overseas - could be cashed in for a higher amount in the United States.

Ponzi told investors he could double their money by buying and selling the coupons … and it worked, at first.

The money came in. Ponzi paid big profits. And still MORE money came in, up to a million dollars a week (and that's in 1920 dollars).

But after a newspaper revealed that there weren't enough coupons in the entire world to support Ponzi's scheme, his fraud was exposed.

He hadn't been investing in coupons at all, only paying off his early investors with fresh money from his later ones.

Many of his customers went into bankruptcy. Ponzi went to jail.

And though he's long dead, the Ponzi scheme lives on … as a catch-all term for a sort of financial musical chairs that works just fine - until the music stops.

[lostabundlle]

Sadly when people had tried to stop Ponzi scemes, or get their money back in the past, there was little hope. Back in 1995 and 1996 there was a huge sceme called Own America and, and then an international sceme called Strategies For Success out of Smithtown NY. Very little was done, despite the dilligent efforts of many to warn others, or get the police, Suffolk County DA, or the NY Attorney's General office involved. If something huge had been done then, perhaps many would not have gotten into so many other scemes like that. I never got my money back.
I was told that since Dennis Vacco was no longer Attorney General, and Elliot Spitzer was the New atnny general, that efforts to being made to clean up the streets and toward stopping prostitution. What a sad turn of fate, since we all know what happened down the road. Even the FBI and the BBB and Consumer Affairs, etc were contacted back then. Only the Smithtown News eventually wrote an article about Strategies. I don't believe any of us got our money back. I was told by the DAs office not to be so ignorant again, and that was that.