Charles Ponzi’s Enduring Financial Scam: Planet Money : NPR

Alton H. Blackington Collection, Robert S. Cox Special Collections and University Archival Research Center, University of Massachusetts Amherst Libraries.

Alton H. Blackington Collection, Robert S. Cox Special Collections and University Archival Research Center, University of Massachusetts Amherst Libraries.

Charles Ponzi had a bad luck. In 1919, the Italian immigrant had been living in the United States for fifteen years. Looking for a way to get rich, he tried a variety of jobs—including bookkeeping, sign painting, grocery store clerk, dishwasher, and librarian.

In August, he was lucky enough to receive a letter from Europe. International Reply CouponIt was a clever way to prepay international postage. Ponzi realized he could make a fortune using these coupons. All he needed were investors.

What happened next made him a household name. This is the story of the man behind the Ponzi scheme – a tale of financial fraud that lives up to the legacy of the language. We have a Planet Money Guide on how to avoid getting scammed:

• Any secrets? Maybe they are missing! – Don’t invest in something if you don’t fully understand the details.
• Regular returns? You could lose a lot! — Business cycles are not regular. Be cautious with investments that promise regular (above average) returns.
• Beware of unrealistic expectations… of creating wealth quickly! – During good economic times, scams can proliferate.
• If you are in a “remote area”, choose carefully! Scams often occur in unregulated areas.
• Fear of missing out? Don’t forget to be skeptical! – Don’t let financial FOMO eliminate your skepticism.

Note: SEC has another (not so cute) guide Avoid Ponzi schemes.

This episode was produced by James Sneed. Fact-checked by Sierra Juarez, produced by Natasha Branch, and edited by Jess Jiang. This episode is based on the book Ponzi Schemeby Mitchell Zuckoff.

music: “Smoke and mirrors“”Tumbleweed” and”Robot Parade“”.

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