Genius, Right? | 2

Summary

Easy Money: The Charles Ponzi Story – Episode: "Genius, Right? | 2"

Released on June 16, 2025 by Apple TV+ / AT WILL MEDIA

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1. Introduction and Early Struggles

The episode opens with a dramatic reenactment of Charles Ponzi confronting Joseph Daniels, a furniture maker demanding repayment of debts. Ponzi, desperate and out of legitimate options, pitches his infamous stamp coupon scheme as a solution to settle his debts.

Key Dialogue:

• Charles Ponzi (00:29): "You're a businessman, right? A smart one, which is why you'll recognize the value in a new business venture that's guaranteed to deliver you enormous profits very soon."
• Joseph Daniels (00:55): "You don't have the money you owe me for the furniture, and now you want me to give you more money?"

2. The Birth of the Ponzi Scheme

Ponzi introduces the concept of using international stamp coupons to investors, promising substantial returns by exploiting currency and postage rate differences across countries. Despite initial skepticism, he manages to convince Daniels to invest, marking the inception of his scheme.

Expert Insight:

• Eugene Soltis, Harvard Business School (02:16): "I genuinely remember the first time I read about Charles Ponzi and I read about the coupons and the exchanging for stamps. My first reaction was like, wow, that's really clever. It looks like it could work."

3. Early Success and Expansion

Encouraged by his initial success with Daniels, Ponzi lowers the investment barrier to attract more investors. He recruits a young Italian immigrant as his first employee, offering a 10% commission to incentivize referrals. This strategy rapidly increases his capital as word spreads within the Italian community.

Key Dialogue:

• Charles Ponzi (09:35): "There's only one thing you need to know about sales. Never crowd a prospect. Just tell them this. Tell them I'll double their investment in three months."

4. Personal Tragedy and Its Impact

As Ponzi's scheme gains momentum, personal tragedy strikes with the sudden death of his wife, Rose's father. This event leads to Rose's temporary absence, removing a crucial moral and emotional anchor in Ponzi's life. Expert Fred Gardafee highlights how such personal losses can create vulnerabilities that contribute to moral and ethical lapses.

Expert Insight:

• Fred Gardafee, Queens College (20:50): "He sees what their parents were going through. They saw the hard work and the suffering and what little they got, and how they were often getting ripped off, even by grocery stores."

5. The Mechanics of the Ponzi Scheme

Ponzi's scheme relies on using funds from new investors to pay returns to earlier investors. This creates a facade of legitimacy and profitability, encouraging continued investment. As more investors join, the scheme grows exponentially, but it remains inherently unstable.

Key Dialogue:

• Charles Ponzi (34:06): "Genius, right?"

Expert Analysis:

• Diana Enriquez, Financial Historian (34:17): "A Ponzi scheme is the exact opposite of the perfect crime. You know, it's the 180 degree opposite... Ultimately, a Ponzi scheme is a self-limiting crime. It cannot persist. It is a failure you're waiting to happen."

6. The Downfall

Ponzi's inability to convert stamp coupons into the promised returns leads to mounting debts and increasing pressure from creditors like Joseph Daniels. As the scheme balances on the influx of new investments, any slowdown or loss of investor confidence triggers the inevitable collapse.

Key Dialogue:

• Charles Ponzi (31:32): "Here you are. It solved the problem, for now, at least, but it left him in a very precarious position because eventually he would run out of money if he kept handing it out without bringing more."

7. Historical Context and Background

The podcast delves into Ponzi's early life in Italy, his immigration struggles, and the cultural pressures that shaped his ambitions. Born Carlo Ponzi in Lugo, Italy, his mother's aspiration to restore their aristocratic status significantly influenced his relentless pursuit of wealth.

Personal Reflection:

• Charles Ponzi (27:42): "I'm done filling everyone else's pockets while mine stay empty."

8. Insights from Experts

Experts like Eugene Soltis and Diana Enriquez provide a deeper understanding of the psychological and structural elements that enabled Ponzi's scheme. They emphasize the role of confidence, ambition, and the absence of ethical constraints in sustaining the fraud until its collapse.

Expert Commentary:

• Eugene Soltis (37:03): "The classic person who engages in fraud and puffery understands that as long as I deliver, no one will really ask how or ask too many questions."

9. Conclusion

The episode concludes by highlighting the inevitability of Ponzi's scheme's failure, underscored by Ponzi's own overconfidence and the inherent unsustainability of his model. The narrative serves as a cautionary tale about the allure of "easy money" and the ethical pitfalls of unchecked ambition.

Closing Quote:

• Charles Ponzi (35:20): "The almighty dollar was the only goal."

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Notable Quotes with Timestamps

• Charles Ponzi (00:29): "You're a businessman, right? A smart one, which is why you'll recognize the value in a new business venture that's guaranteed to deliver you enormous profits very soon."
• Eugene Soltis (02:16): "It looks like it could work."
• Charles Ponzi (09:35): "Never crowd a prospect. Just tell them this. Tell them I'll double their investment in three months."
• Charles Ponzi (34:06): "Genius, right?"
• Diana Enriquez (34:17): "A Ponzi scheme is the exact opposite of the perfect crime."

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Production Credits

Easy Money: The Charles Ponzi Story is an Apple Original podcast produced by AT WILL MEDIA, featuring host Maya Lau and award-winning comedian Sebastian Maniscalco as Charles Ponzi. The production team includes writers Matt Hickey and Kevin Hines, with significant contributions from Maya Lau and Brigand Snow. The podcast employs a blend of real interviews, historical research, and dramatic reenactments to provide an immersive narrative experience.

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Follow and listen on Apple Podcasts.

Transcript

[Narrator]

The furniture maker, Joseph Daniels, had shown up to Ponzi's office to collect on his debts, and Ponzi only had one card to play.

[Charles Ponzi]

Give me a chance to explain. While I don't have your money, per.

[Joseph Daniels]

Se, and pretty soon you won't have your kneecaps, per se, I do have.

[Charles Ponzi]

Something else that I promise is worth your time. Not to mention worth a lot more than $200, believe me.

[Joseph Daniels]

You got two minutes, and then we explore other repayment options.

[Charles Ponzi]

There's no need for that. I'm not asking for an extension on my loan. All right. What I'm saying to you is you're a businessman, right? A smart one, which is why you'll recognize the value in a new business venture that's guaranteed to deliver you enormous profits very soon. Now, this is a venture you could take part of right now with just $200.

[Joseph Daniels]

Oh, oh, the 200 you already owe me.

[Charles Ponzi]

No, a different 200, which I'll invest in this venture and which then I'll return to you soon with. With interest, just to be clear. Enormous interest.

[Joseph Daniels]

You don't have the money you owe me for the furniture, and now you want me to give you more money?

[Charles Ponzi]

Temporarily, yes.

[Joseph Daniels]

All right, I've heard enough.

[Charles Ponzi]

Wait, wait, wait, wait, wait.

[Joseph Daniels]

I should have known better.

[Charles Ponzi]

Do you know what this is?

[Joseph Daniels]

A stamp.

[Charles Ponzi]

A stamp coupon.

[Joseph Daniels]

Okay, and how is this stamp coupon going to save your kneecaps?

[Charles Ponzi]

Because if you decide to come on board and leave my kneecaps where they are, then this coupon will make you free money.

[Narrator]

Oh, is that so?

[Joseph Daniels]

Well, tell me how.

[Charles Ponzi]

Well, I'm glad you asked.

[Eugene Soltis]

This is easy money. The Charles Ponzi Story, an Apple original podcast produced by At Will Media. This show incorporates real interviews and historical research alongside dramatic reenactments and actors voices.

[Expert]

I mean, I genuinely remember the first time I read about Charles Ponzi and I read about the coupons and the exchanging for stamps. My first reaction was like, wow, that's really clever. It looks like it could work.

[Narrator]

That's Eugene Soltis of Harvard Business School, who we've heard from before, our expert on white collar criminals and Ponzi schemers.

[Expert]

In the very foundations. It's arbitrage. He found an opportunity to effectively trade stamps in one location and trade them in another location and make some money in between. I mean, that is the basis of what every modern hedge fund does today.

[Eugene Soltis]

Who would have thought that postage coupons.

[Narrator]

Would lead to a story so big.

[Eugene Soltis]

That it cemented Ponzi's name and culture for more than a century. Not me, nor most people, I assume, and certainly not those present at the 1906 International Postal Treaty of Rome. Who devised these coupons as an easy way of conducting international business, replacing the need to find foreign stamps in order to cover return postage. As a result, these coupons were sold in dozens of countries around the world. And importantly, they were identical and interchangeable, no matter where they were purchased. The only thing that differed was the price, since coupons cost the same as a local stamp, Meaning you could buy a coupon in a country where the stamps were cheap and the currency weak.

[Charles Ponzi]

Like Italy, for example. Let's say a stamp cost $0.01, and then you redeem that coupon. In the United States, where stamps are worth more money, let's say two cents. Well, you just pocketed one whole cent. Not a lot of money. Sure. But with enough of these coupons, Tens of thousands, hundreds of thousands, well, that's a lot of profit. But it's just sitting there, guaranteed by the postal system, waiting for someone to make it happen. Johnny Genius, right?

[Expert]

It sounded pretty clever. He also sounded like the right person to do it. It's international. He was an immigrant. He knows other people that were overseas. It actually sounded like a pretty good idea. And I realized that if he would have come to me and said, eugene, can you give me $100 to invest in this? Here's all the information that I have. Would do this. I probably would have given him some money.

[Narrator]

Here's a stamp coupon. It's backed by the government. I can buy a bunch of them for cheap in Europe and ship them out to America, where I can effectively sell them for more guaranteed profit. Do you want in? That's essentially what it boiled down to. Simple, clean, and did I mention guaranteed? Maybe that's worth $200 to someone. Eugene thought so. And Ponzi was hoping that others would agree with.

[Charles Ponzi]

So, what do you say?

[Joseph Daniels]

You're telling me you're gonna use stamps.

[Charles Ponzi]

Stamp coupons, right?

[Joseph Daniels]

To somehow make me money?

[Charles Ponzi]

Oh, is that what I said? I misspoke. I shouldn't have said these stamps will make you money, Mr. Daniels. I meant to say they'll make you rich. Rich. Plus, we get to avoid all this nasty business.

[Joseph Daniels]

I don't know why I'm even entertaining this.

[Charles Ponzi]

Because you're a smart. You recognize opportunity.

[Joseph Daniels]

All right, let's see if you're all talk. But if your little stamps plan doesn't work out, I'll be coming back here for the furniture, plus the money, plus the profits. You Promised in cash.

[Charles Ponzi]

Or else how could I refuse?

[Expert]

Sir?

[Charles Ponzi]

You have yourself a deal.

[Eugene Soltis]

Circumstances had required Ponzi to pitch his stamps coupons idea a bit earlier than expected, before it was fully ready. But Ponzi, who just put himself even further in debt with Joseph Daniels, a man to whom he already owed hundreds of dollars, wasn't worried. He had complete faith in his plan that things would be fine. Better than fine.

[Charles Ponzi]

I'd done plenty of calculations on paper, every one of them an expression of mathematical beauty. And Now I had 200 whole dollars. I could finally test it out properly. But it would take weeks for the money to make its way back to Europe and for the stamp coupons to return. And in the meantime, did it really make sense to knock back good business?

[Eugene Soltis]

With the $200 from Joseph Daniels, Ponzi had again bought himself some time, but not much. It was hardly enough to turn his idea into a huge enterprise. And since he didn't have enough money of his own either, he needed to raise some more outside funds, the same way any hedge fund manager has to. Only Ponzi had to do it without a track record. Which is why he decided to lower the barrier to entry, lower the sense of risk. Anything to get people through his door and willing to part with their money.

[Young Investor]

Hello. Is this the securities Exchange Company?

[Charles Ponzi]

It is. Take a seat.

[Eugene Soltis]

That, by the way, is what Ponzi decided to call his company. It's sort of literal and official, sounding like Standard Oil or General Motors, but also sufficiently vague. It was also eerily similar to the other sec, the securities and Exchange Commission, the government body that regulates finance, which wouldn't actually be established for another 14 years.

[Charles Ponzi]

Do you know what this is? These coupons are sold in dozens of countries around the world.

[Narrator]

Ponzi went over his scheme to this young man, an Italian immigrant like him. He explained about the 1906 postal treaty, showed off the foreign exchange rates in the newspaper, the whole thing.

[Charles Ponzi]

Like I always say, these stamps won't make you rich, they'll make you. No, no, wait, wait. They won't make you money. They'll make you rich.

[Eugene Soltis]

But this time, it didn't work.

[Young Investor]

So you need money.

[Charles Ponzi]

I need investors. Yeah. Not much. Just $10. I don't turn anyone away. You don't have $10. This is a business. What do you think I was doing here?

[Young Investor]

I. I don't know. Some friends at the dock were saying something, something they heard from the furniture maker about you being able to make people rich. So I just thought. But I didn't realize you needed My money to do it. I'm sorry for wasting your time. Thank you very much, sir.

[Narrator]

But just as Ponzi did not let the furniture maker, Joseph Daniels, leave without becoming a convert, he wasn't about to let this young man do so either.

[Charles Ponzi]

What if I didn't?

[Young Investor]

Didn't what?

[Charles Ponzi]

If I didn't need your money? Maybe you could make me money without giving me a cent after all. Ah.

[Young Investor]

How?

[Charles Ponzi]

You said your friends were talking about me.

[Expert]

Yeah.

[Charles Ponzi]

Well, you could be my sales agent.

[Narrator]

And just like that, Charles Ponzi had his first employee. He offered the Young Man A 10% commission on any money he brought in. But before sending him off into the world, Ponzi gave him a quick lesson to on salesmanship and psychology.

[Charles Ponzi]

There's only one thing you need to know about sales. Never crowd a prospect. Just tell them this. Tell them I'll double their investment in three months. And, oh, do the make you rich line and then just leave that thought in their head. It will do the rest on its own.

[Eugene Soltis]

Ponzi was right in thinking that his sales agent might be able to bring in cash. Just a few weeks later, after New Year's, the young man showed up at Ponzi's office bearing almost $1,800. Roughly $30,000 today. And as word of mouth began to spread, mostly through the Italian community at this point, about a man who could double my money.

[Charles Ponzi]

For real? As real as the Mayflower on this stamp here? No, as real as the actual Mayflower.

[Narrator]

That is, a man who is willing to accept any amount from anyone. Is $5 enough?

[Charles Ponzi]

Certainly. I'm not like other bankers. I'll help anyone who has any amount to spare.

[Eugene Soltis]

Momentum began to slowly build. In short, everything was beginning to work out wonderfully for Ponzi. Well, everything at work, anyway.

[Rose Ponzi]

Charlie, which of these flower arrangements do you like best? I like the left. It seems like something my father would like, but maybe the other one. It's less expensive.

[Charles Ponzi]

No, no, left is good. Yeah, get that one.

[Rose Ponzi]

Oh, you're working today?

[Charles Ponzi]

It's Monday.

[Rose Ponzi]

We need to go over these plans for the burial.

[Narrator]

Just as things were starting to gather steam, Ponzi's family was struck by an unexpected tragedy. The sudden death of Rose's father.

[Charles Ponzi]

Yes, I thought perhaps we could do it tonight. I could get home early and you should be resting in the meantime. Rose, you're in mourning.

[Rose Ponzi]

We're in mourning.

[Charles Ponzi]

I know. Yes, we. I'm sorry. I need to go. But tonight, I promise, we'll plan the best funeral Boston's ever seen. Oh, almost forgot. Here. Your mother's rings. I promise I get them back.

[Rose Ponzi]

Charlie, really? When did you have a chance to.

[Charles Ponzi]

The other day. I wanted to surprise you.

[Rose Ponzi]

My father bought this one for my mother with his first paycheck.

[Charles Ponzi]

It's beautiful. Although I'm hardly surprised that the man who raised you had such good taste. See, this is what I'm doing it all for. The long hours. You're what I'm doing it all for.

[Rose Ponzi]

Thank you.

[Charles Ponzi]

And this is just the beginning. You'll have a diamond ring on every finger soon enough.

[Rose Ponzi]

We don't need to go that far.

[Charles Ponzi]

We'll make your father proud, Rose. You'll see. Which is why I need to get going.

[Rose Ponzi]

Yes, I suppose. Just don't be too late.

[Eugene Soltis]

Rose, who'd been very close to her family, was now officially an orphan, which explains why she's curiously absent throughout this part of the story, in both Ponzi's memoir and other accounts, because clearly, she was dealing with her grief. And since Ponzi's story is so compressed, her absence of even just a couple of months proved quite consequential.

[Expert]

No one goes from, like, binary all good to, like, massive Ponzi schemer. But it's a series of small decisions as they keep adding up and piling up that become the problem.

[Eugene Soltis]

That's Eugene Soltis again. And what he's talking about are the proverbial forks in the road which can lead someone to accidentally becoming a Ponzi schemer. We've seen some of these forks already. Ponzi could have simply gone back to clerking. He could have given the furniture back to Joseph Daniels instead of pitching him on an idea he wasn't sure would work.

[Narrator]

Or he could have waited before taking.

[Eugene Soltis]

In new customers, but he didn't.

[Expert]

The best way you see people avoiding going down, let's say the slippery slope, is not because they're better people, but they have what I describe as uncomfortable dissonance. They have people around them who are able to push back on them, who are able to kind of intercede. Friends, sometimes a family member, sometimes a spouse that literally says, this seems a little funky. Why are you doing this?

[Eugene Soltis]

At this crucial time? The absence of Rose or anyone else close to him meant that one of the key guard rails Eugene mentioned above was missing. Ponzi was operating solo on pure confidence and ambition, which can be a dangerous combination. Not that Ponzi was a fraudster at this point in the story. Not quite. But he was about to be.

[Immigrant]

Next customer. Hello, sir. How can I help you?

[Charles Ponzi]

Good morning. Recently purchased a number of stamp coupons that I no longer need.

[Eugene Soltis]

Ponzi knew his business plan worked on paper, which is why he kept bringing in money while telling himself that he'd eventually get around to actually executing on the plan when he had time, as if it was just some boring technicality. And given how much money he'd already taken in, if that assumption was wrong, it would prove disastrous.

[Immigrant]

Well, they don't expire, so you can just keep a hold of them.

[Charles Ponzi]

Huh? That's good to know, but even so, I'd like to return them in exchange for cash.

[Immigrant]

Like I said, the coupons don't expire.

[Charles Ponzi]

I heard what you said. That's wonderful for you. But what I'm saying is that I don't have any need for them, and I'd like a refund.

[Immigrant]

Well, how many are we talking about here?

[Charles Ponzi]

53,000.

[Immigrant]

53.

[Charles Ponzi]

Well, if you want to be exact, it's 53,426.

[Immigrant]

But you have 50. 53.

[Charles Ponzi]

Thousand, yes.

[Immigrant]

Thousand.

[Charles Ponzi]

Yes, sir.

[Immigrant]

Coupons just lying around.

[Charles Ponzi]

So you can imagine my enthusiasm to get these off my hands.

[Immigrant]

Well, I don't know how to tell you this, mister, but we don't refund stamp coupons.

[Charles Ponzi]

No, sir. I don't think you understand. These are unused, pristine.

[Immigrant]

We don't refund stamp coupons.

[Charles Ponzi]

No, sir, I. My argument was simple, logical, that a coupon must be accepted by any country belonging to the universal postal union in exchange for a stamp. So why not a refund? Nothing in all my research suggested otherwise. It was the law. Probably it just made too much sense, sir. It just had to work, sir.

[Immigrant]

Now I can't help you.

[Charles Ponzi]

Fidati di me. Carlo.

[Joseph Daniels]

Si.

[Charles Ponzi]

Forte non fieri. Si, si. Mama. Do I get a farewell kiss?

[Narrator]

Though his name would become inextricable from his adopted home of Boston, Charles Ponzi's story started in a different country and under a slightly different name.

[Eugene Soltis]

Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi. Mio figlio.

[Charles Ponzi]

Good luck.

[Narrator]

And yes, we're in a flashback here to another key moment in his life. The moment where he set off from Italy, bound for America. He was born in Lugo, Italy, in 1882. There's not a whole lot known about Ponzi's childhood, but we do know he had a special relationship with his mother, Imelda, whose aristocratic family had lost their fortune not long before Carlo was born. It remained her clear ambition in life to rejoin the upper class someday. An ambition she passed on to her only child you fail, and I have no son.

[Charles Ponzi]

I love you, too, Mama. To her, success is love a shared language of madre e filhof.

[Eugene Soltis]

Ponzi's father was a postman, a decent enough job, but hardly one that could afford them such a boost in stature. And he died young anyway, meaning that for Imelda, it was all up to her only child, Carlo, to fulfill her dream. And it's probably worth pausing for just a moment to consider how much of Ponzi's story is contained right there in his upbringing, surrounded by both ambition for riches and stamps. In fact, he kept a hefty stamp collection himself and carried it with him throughout his life. And so, while he may not have been destined to end up doing what he did, it seems like he, more than almost anyone else, was perfectly positioned to do so, as though he'd perhaps been set off down that path much earlier than anyone could have ever known.

[Narrator]

But I digress. By the time Ponzi set out on the SS Vancouver in 1903, at the age of 21, he'd already flunked out of university in Rome and gambled away most of the small inheritance he'd received from his father. It was pretty clear that Carlo wasn't on track for the kind of success Imelda envisioned, not in Italy, anyway, which is why she sent him sailing off toward a better life. I mean, if Carlo wasn't likely to bring her riches, perhaps Charles would have more luck. Ponzi reflected on the ship what he'd heard about this great new land he.

[Charles Ponzi]

Was destined for America, the land of opportunity. That's what I was told, what we were all told. As Mama once said, in the United States, the streets are actually paved with gold. All you have to do is stoop and pick it up. Or as my uncle put it less poetically, poor, uneducated Italian boys go to America and make lots of money. And that's what I was supposed to do, what I planned to do, what I wanted to do. Except it took all but five minutes after arriving in Boston to realize that our impression of America was, as we say back home, stronzate. For one thing, the streets were barely paved at all, let alone gold. And for another, although America needed immigrants to grow and prosper, that doesn't mean it necessarily wanted them. Over here.

[Young Investor]

Documents out.

[Charles Ponzi]

Move it. Would you believe it? My first class ticket counted for almost nothing once I stepped off the boat. I was just another immigrant, and not even the good kind from England or Germany or France. I was simply Italian.

[Fred Gardafee]

Ponzi was part of the mass migration from Italy to the United States that took place between 1880 and 1923. And he would have faced incredible prejudice that he was not used to coming from the area of Lugo and Parma.

[Narrator]

That's Fred Gardaffe, a distinguished professor of Italian American studies at Queens College at the City University of New York. Or as he likes to put it.

[Fred Gardafee]

I'm a guy who dedicated 50 plus years of his life to studying Italian American culture.

[Eugene Soltis]

We'll get back to the story of Ponzi's scheme soon, but first, it's important to understand a bit more about what Ponzi's life in the US Was like leading up to all that, because it definitely helps explain some of the decisions he made. And Fred is the perfect person to put us in Ponzi's headspace, arriving as a new immigrant, ready to strike it rich.

[Fred Gardafee]

He's one of many who came here with this idea of the American dream, which was immediately dashed when they found out what they had to do.

[Narrator]

Those expectations and subsequent disappointments weren't unique to Italian immigrants, of course, although they were heightened among that group at that time.

[Fred Gardafee]

There's a concept in Italian culture called bella figura. And bella figura means putting on to the outside world the best possible face that you can do and never let anybody know what problems you have. And they would take these beautiful pictures of them with the only suit they probably had or something. Sometimes they even borrowed the suits to make it look to the other people that they were doing fine. So it's not just the propaganda, it's the word of mouth that goes back to Italy that tells people this is a land where anything is possible. This is a land of meritocracy, where if you work hard, you can get ahead.

[Narrator]

That explains why Ponzi's relatives were filling his head with false promises. And in fact, Ponzi would do a bit of bella figura himself. He wrote in his memoir that he traveled to the US On a first class ticket. However, immigration records in Boston archives show that Ponzi boarded with only a steerage ticket and then paid $20 to upgrade it, but only to second class. Which speaks to what Fred is saying, that like other Italian migrants, once he was in the U.S. ponzi wanted to present himself as a new man. Gone was Carlo, and here was Charles, a would be man of the upper crust, albeit with only two $2.50 to his name, having gambled away most of the $200 his mom gave him. That's not a lot of Money to rebuild a life with. Fortunately, there was a contingency plan.

[Charles Ponzi]

Mama anticipated this exact thing might happen on account of, well, this exact thing having happened on multiple occasions before. Me going off on trip a losing all my money, ended up stranded and penniless, in need of rescue. But since it would be much harder for her to assist me in Boston than in Rome, she'd given me something else on top of the 200 in cash. A prepaid railroad fare to Pittsburgh, where some distant fourth or fifth cousin was apparently expecting me if I needed it. Which I did.

[Eugene Soltis]

Which is why, despite Boston being the city where he'd make his name, he was only there a few hours on his first day in America. Most of them spent standing at the station in the rain, waiting for the 9pm train.

[Charles Ponzi]

I could see the city lights glowing in the distance, beckoning me. And if I even just had a few more dollars in my pocket, I probably would have walked straight towards it.

[Eugene Soltis]

But instead, Ponzi hopped on that train to Pittsburgh, setting in motion a 13 year detour in this story before he would set foot in Boston again. A detour that would haunt the rest of his life.

[Charles Ponzi]

Let's just say I had a lot to learn about things here. Name? Carlo. Carlo Ponzi. Another one. You know. Bookkeeping. Starting with one very important lesson. That landing in America without money wasn't half as bad as landing without the slightest knowledge of its language. Yes? No. Do you know any English? God bless Americano. Christ. I couldn't fill out an office job because I didn't understand a word of English. And as a small man, I of frail physique, I wasn't exactly cut out for manual labor either.

[Immigrant]

Look at this one. He can't be more than five foot tall.

[Charles Ponzi]

So, job. Still, I had to live. Which left me only the most undesirable jobs. From grocery store clerk to sewing machine repair man to insurance salesman. Good morning, Madame. Do you want money for your house if it burns? From factory hand to dining room help. I tried it all. You're vino, Madame. Sometimes I was fired. More often, I quit before I was fired.

[Eugene Soltis]

What's going on over here?

[Charles Ponzi]

Why the fuck they fought today? You could ask your Italian friends about that one. But however the employment ended or started or whatever it entailed, the point is that those were hard times. Long years with limited options. And even if I wasn't working with my hands, they left calluses. All right. With each menial job, I moved across America from one city to another. Sometimes by rail, other times by foot. Boston to Pittsburgh, then New York, Patterson, New Haven, Providence, even Montreal up in Canada, and then finally back to my beloved Boston.

[Narrator]

By that time, Ponzi had picked up enough English to be able to handle any office job and to charm people better than almost anyone. But he'd picked up something else along the way, too, something we touched on before, an insight into America and the disparity between the promises it held out and the promises it was willing to honor.

[Fred Gardafee]

Ponzi's frustration of being able to eke out a living. It's the same frustration that we see inside the young men who were children of immigrants who became gangsters.

[Narrator]

That's Fred Gardeffey again.

[Fred Gardafee]

They saw what their parents were going through. They saw the hard work and the suffering and what little they got, and how they were often getting ripped off, even by grocery stores. Those are learned behaviors that came from experiencing what was happening in the United States.

[Narrator]

Ponzi certainly had learned some behaviors, some attitudes during those early years struggling in America. Behaviors and attitudes that certainly affected the trajectory of his story when he arrived back in Boston.

[Charles Ponzi]

You know, America likes to dangle success and riches in front of people like you and me as a reward for our hard work and persistence. And then when it's done with us, it hopes we're simply too broken and tired and we'll just settle for less. And the thing is, most of us do. But those hard years after I came here only made me more determined. America was going to pay back its debt against my dreams. I was going to play its game, and one way or another, it was going to pay me back. Because here's another thing I realized about America. The almighty dollar is the only goal. It is all that really matters, people. And once you have it, it places a person beyond any criticism for any breach of ethics accumulated in its pursuit. The ends justifies the means. In fact, the ends are the only thing anyone will ever remember.

[Narrator]

Now, having heard about Ponzi's life up until this moment, everything we've heard so far in this story makes a lot more sense. Why he felt so desperate and frantic to make something of himself.

[Charles Ponzi]

I'm done filling everyone else's pockets while mine stay empty.

[Eugene Soltis]

Why, when he was practically laughed out of the bank for trying to get a loan, he reached a breaking point.

[Charles Ponzi]

Your account is, to be frank, more of a bother than a benefit to us.

[Eugene Soltis]

Why he leapt so eagerly into his stamps business before it was ready. And why he didn't just fold when he was told.

[Immigrant]

I don't know how to tell you this, Mr. But we don't refund stamped coupons.

[Eugene Soltis]

At least. That decision makes a lot more sense to me in the context of what he'd been through before. Which isn't to say I'm giving him a pass, far from it. Just that. If the question we're trying to answer here is how someone ends up running an enormous scheme that ultimately defrauds the very people they're trying to help, then this is all useful information. But now back to our main story.

[Narrator]

Ponzi had assumed, incorrectly, that he could simply take the postage coupons he'd bought for cheap overseas and refund them into cash at the pricier American rate, either directly or first by turning them into US Stamps and then into US dollars. And he was wrong, meaning he was left with a lot of stamps that, for now, were useless for anything except what stamps were designed to do. Send mail. Which was not a lot of help to him, especially when his investors came calling back for more.

[Joseph Daniels]

The day of reckoning is upon us, Ponzi. No more fancy talk.

[Narrator]

So, yes, Ponzi was again in a very tight spot. He obviously had no way of paying them back. No legitimate way, anyway.

[Charles Ponzi]

Hey, Daniels. Yeah. Can I call you Joe? No. Good to see you as well. Let's see here. I have your note around here somewhere. You invested, what was it, 100, 200? 200, of course. Where does the time go? Am I right? Ah, so, yes, you're entitled to your original investment. $200, obviously, plus interest.

[Narrator]

This was another one of those forks in the road, a fork with no especially good options. He could tell the truth, that he didn't have the money he'd promised.

[Charles Ponzi]

Ah, there we are. Yeah, yeah. 200, it says. So I owe you 400.

[Eugene Soltis]

Or he could just pretend like it all worked out.

[Joseph Daniels]

I don't see any money, Ponzi.

[Charles Ponzi]

I was just getting to that.

[Narrator]

Guess which option Ponzi chose.

[Charles Ponzi]

Here? 20? 40? 60?

[Narrator]

See, while Ponzi didn't have these investors money specifically on hand, he did have someone else's money, Money that had just come in from newer investors, Money that hadn't been turned into coupons yet and was, for now, just lying around the office. Why not use some of that money to pay off his original investors?

[Charles Ponzi]

360, 380, $400. There you are. Free to take your money with you and leave right now.

[Narrator]

It solved the problem, for now, at least, but it left him in a very precarious position because eventually he would run out of money if he kept handing it out without bringing more. In.

[Charles Ponzi]

Unless, that is, if 400 is all you want.

[Joseph Daniels]

What are you getting at?

[Charles Ponzi]

I mean, this could be worth a lot more than 400, but that probably doesn't interest you, right? Of course not. So let's just settle up, okay?

[Joseph Daniels]

Wait, what are you saying? I give you back the 200 or.

[Charles Ponzi]

The full 400, and then in 45 days you'd have, what is it, 600?

[Expert]

How come?

[Charles Ponzi]

That's just how percentages work.

[Joseph Daniels]

No, I mean how come you told me that I still only gave you 200? Now you're telling me how I can take even more from Mr. Daniels.

[Charles Ponzi]

Don't worry about my finances. I'm not. What I'm worried about is my customers being satisfied. Here's a new note, if you're interested. And by the way, if you reinvest that money again, you'd have, what, 900 at the end of the next 45 day period?

[Joseph Daniels]

900. All just from $200.

[Charles Ponzi]

God bless the Holy Roman Empire for inventing international postage.

[Narrator]

Indeed. And so, until he figured out the last step of his ingenious stamps plan, as each of his early investors came in to collect their money, Ponzi simply offered them the money from his newer investors instead of actual returns. And since the early investors were basically all reinvesting their money, Ponzi wasn't even having to hand over all that much money anyway. And then those investors started going out and telling people just how incredible Ponzi was. Never mind that no one was actually walking around with cash in hand. For now, it was all on paper. But that was enough to bring in even more new investors to keep things going, which kept Ponzi in business. And that is the essence of a Ponzi scheme.

[Charles Ponzi]

Genius, right?

[Diana Enriquez]

A Ponzi scheme is the exact opposite of the perfect crime. You know, it's the 180 degree opposite.

[Narrator]

That's Diana Enriquez, a financial historian and former New York Times journalist who also wrote a biography of Bernie Madoff, the biggest Ponzi schemer in history. She's something of an expert on these schemes, and she certainly disagrees with Ponzi's assessment of his situation.

[Diana Enriquez]

Prior to Ponzi, these kinds of frauds were called Peter DePaul schemes. Robbing Peter to pay Paul, which is the essence of a Ponzi scheme, you will ultimately, no matter how successful, run out of new victims. Even if you manage to pull in every single investor in the world, you'll run out, and then you won't have a new Peter to rob from to pay Paul. So Ultimately, a Ponzi scheme is a self limiting crime. It cannot persist. It is a failure you're waiting to happen. So the first lie a Ponzi schemer tells is to himself. This is going to be different. I'm going to get away with it.

[Narrator]

Which is certainly something Ponzi was doing at the time.

[Charles Ponzi]

The only problem was the last step. Converting the foreign coupons into US dollars. How could a plan so perfect get tripped up by one tiny technicality? It couldn't. There had to be a way. These were real calculations. I even showed them to a postal inspector whose job, by the way, is to detect mail fraud. He walked out of the office convinced I was onto something, so that's why I kept going.

[Eugene Soltis]

That and because he didn't have much choice. The $1,800 he'd already accepted from customers is equivalent to about $30,000 today. A much deeper hole than Ponzi could hope to simply climb out of. And with creditors already coming after him, he had to make it work.

[Charles Ponzi]

I mean, hell, what would you do? Just shut everything down? Or would you engineer a slight reprieve, giving you a bit more time to figure things out? Think about it. After all, what's a white lie between friends? Especially friends you never met and to whom you owe a lot of money?

[Eugene Soltis]

Next time on Easy Money.

[Charles Ponzi]

The almighty dollar was the only goal.

[Expert]

No one could ever start out saying, I'm going to create a 20 billion dollar Ponzi scheme. You would almost be destined to fail.

[Charles Ponzi]

You heard about this Ponzi character? Folks like us can get rich from practically nothing. So how much can I put you down for?

[Expert]

The classic person who engages in fraud and puffery. They understand that as long as I deliver, no one will really ask how or ask too many questions.

[Rose Ponzi]

Come here and look me in the eye.

[Charles Ponzi]

What's wrong, Bianchi? Hey, Bianchi. Well, it's actually Ponzi. I go by Ponzi now.

[Diana Enriquez]

You can't run a Ponzi scheme if you can't command trust.

[Charles Ponzi]

Great running into you again, pal. Feels like fate, doesn't it?

[Eugene Soltis]

Easy money. The Charles Ponzi Story is an Apple original podcast produced by Will Media, reported and hosted by Meadow, Maya Lau. Our producers are Matt Hickey and Brigand Snow. Production support from Ann, Margaret Warner, Lee Mingistou and Taylor Hosking. The show is written by Matt Hickey and Kevin Hines, with additional writing from Maya Lau and Brigand Snow. Our audio editor is Andrew Holzberger with support from Greg Devens II and Zach Graphone. Field recordings by George Hicks. Original music is by John Naichez, sound design and mix engineer by Sound and Fission. Scripted scenes directed by Katie Finneran. Casting for scripted scenes by Darrell Eisenberg. CSA fact checking by Sona Avakian. Ashley Taylor is our senior supervising producer. Executive producers are Will Malnati and Sebastian Maniscalco. Our co executive producer is Kevin Hines. The part of Charles Ponzi is played by Sebastian Maniscalco. Rose Ponzi by Candice Judd Thompson, Imelda Ponzi by Danielle Tarmi, Joseph Daniels by Wat White, Mrs. Campbell by Marika Aubry and Etre Ghiberti by Nathan Vincenti. Additional parts played by Brennan Lowry, Brigand Snow, Gianni Demaia, Manu Pasqualini, Paul Kevins, PJ Serino, Chave Brown, Tyler Haynes and Wyatt Daniel Logan. Legal services provided by Sean Gordon with Weintraub Tobin and Carolyn Levin at mksr. Follow and listen on Apple Podcasts.