Ponzi's Scheme (32 page)

Ponzi called himself Andrea Luciana and signed aboard as a waiter and dishwasher, relying on skills he had honed during his early days in America. The ship left Tampa bound for Houston, and during the trip Ponzi disguised himself by shaving his head, growing a mustache, and outfitting himself in overalls and a sailor cap. Before he'd left, he'd added to the intrigue by faking his suicide, asking friends in Jacksonville to place some of his clothing on a beach with a note apologizing to his wife and mother for taking his life. But Ponzi made the mistake of revealing his identity to a shipmate, and word spread to a deputy sheriff named George Lacy. The deputy followed the ship to Galveston and then New Orleans, where Lacy confirmed Ponzi's identity and placed him under arrest. The only good that came of it for Ponzi was the five hundred dollars he earned by selling an account of his capture to the
Post.

Flanked by authorities, Ponzi prepares for extradition to Boston after
his flight from justice and arrest in Texas.

Boston Public Library, Print Department

Ponzi appealed to Calvin Coolidge, sending the president an urgent telegram claiming persecution and proposing his own deportation to avoid more prison time: “May I ask your excellency for official or unofficial intervention in my behalf? The Ponzi case has assumed the proportions of a national scandal fostered by the state of Massachusetts with the forbearance of the federal government. But, for the best interests of all concerned, I am willing to submit to immediate deportation. Will your excellency give his consideration of the eventual wisdom of my compromise?” Coolidge ignored the plea.

Desperate, Ponzi sent a cable to Italy appealing to the dictator Benito Mussolini. No help there either, making Ponzi one of the rare topics on which Coolidge and Mussolini agreed. Ponzi was returned to Texas to await extradition, a process he fought for months. While Ponzi battled, Rose accompanied Imelde Ponzi home to Italy, where she wanted to spend her final years.

Finally Ponzi was returned to Boston in February 1927 to begin his sentence in the Massachusetts State Prison in Charlestown. His prison job was sewing underwear. Ponzi sought a pardon in April 1930 when he learned that his mother was on her deathbed, but the request was denied. Ponzi maintained that Imelde Ponzi died without knowing the trouble he was in, but that was certainly wishful thinking.

W
hen the final payment to Ponzi's creditors was made in December 1930,
Time
magazine took note of it. “Glittering in the archives of financial fraud is the record of Charles Ponzi, duper extraordinary, personification of quick riches,” the item began. It went on to recount his aliases and his occupation—“thief”—and to claim that in his prime Ponzi slept in lavender pajamas. Ponzi wrote a lengthy, jocular reply from his cell, which the magazine gleefully printed. First he set the record straight on his sleepwear, insisting that he never wore purple nightclothes, “nor pink ribbons on my night shirt. Fur coat and overshoes on extremely cold nights have been my limit.” In his letter, Ponzi mused about challenging the editor of
Time
to a duel, then thought better of it. “You know,” he wrote, “I like you in spite of your jabs because you have given me an opportunity of spending an hour writing this letter. If you come over to Boston after I am out, I have a damned good mind to buy you a drink. Two if you can stand the gait. Will you libate with me?”

Ponzi was released on parole in February 1934 with seventy dollars he had earned in prison. He declined the customary free suit of clothes given to departing prisoners. Outside the walls, he stepped into a clutch of reporters. Balding and thicker around the middle, he was still Ponzi. “It's great to see you boys,” he said, posing for photos. Though Ponzi's debt to society was paid, U.S. officials had still not forgiven him.

After completing his state prison term, Ponzi is escorted up the gangplank
of S.S.
Vulcania
for his deportation to Italy in 1934.

Boston Public Library, Print Department

Ponzi had never obtained citizenship, so federal authorities moved immediately to deport him. Ponzi, Rose, and Dan Coakley pleaded for mercy and a pardon, even enlisting Ponzi's old nemesis publicity man William McMasters. At one point Ponzi went to the
Post,
hoping to persuade his former pursuers that he had suffered enough for his misdeeds. On his way into the newsroom, Ponzi walked past the Pulitzer Prize on display. He strolled over to Eddie Dunn's desk. The two shook hands and talked quietly about the old days. But there was nothing Dunn or anyone else could do. Appeals to the governor for a pardon were denied. Ponzi was deemed an undesirable alien.

On October 7, 1934, Ponzi's three-decade American adventure came to an end. At times crying softly, the fifty-two-year-old Ponzi was escorted to the S.S.
Vulcania
for deportation to Italy. He carried a suitcase filled with newspaper clippings, wore a new brown suit Rose had bought him, and in his pocket carried five hundred dollars she had given him. “I am not bitter,” he told reporters. “I have met with much kindness. . . . I'm afraid I'm not a credit to this country but I hope to do better in the future. . . . I went looking for trouble and I got it, more than I expected.” Asked what he would do differently if he were just arriving in the United States as a young man, he said ruefully, “I'd cut my hands off. And my head, too, I guess.” When a reporter asked about Rose, Ponzi's eyes brimmed with tears. “No, she won't be here,” he said. “I saw her for the last time last night.”

He spoke of sending for Rose once he got settled, but her home and family were in Boston. Even if she had wanted to join him in Italy, Ponzi could not support her. He barely scraped by doing odd jobs and working occasionally as a guide in Rome. For the next two years they corresponded regularly. Ponzi enlisted Rose in his vigorous, lengthy, unsuccessful attempts to find an American publisher for the autobiography he called
The Rise of Mr. Ponzi.

The inevitable blow came in 1936, when after eighteen years of marriage, more worse than better, more apart than together, Rose decided she could no longer remain Mrs. Ponzi. Her feelings for him had not changed, but their separation seemed likely to be endless. It was time to move on. “When he was down, when he was in trouble, when he was in prison, I stuck to him,” she told a
Post
reporter. “When he had millions, when he had a mansion, when he had cars, I stuck with him. And now I feel that I have proved my loyalty through thick and thin, and I intend to secure a quiet divorce.”

Reached in Rome, Ponzi tried to bluff Rose into jealousy by telling a reporter that he had become engaged to an eighteen-year-old girl. Rose would not bite. She said simply that she hoped he was happy. Rose resolved for religious reasons that she would not remarry, and so she would never fulfill her dreams of motherhood. Ponzi sought to return to Boston to oppose the divorce but ultimately fought it in absentia and lost. The marriage ended in December 1936.

In 1939, Ponzi moved to Brazil to take a job with the Italian airline LATI. The job had been arranged by his cousin Attilio Biseo, an Italian air force colonel who commanded the Green Mice Squadron and was friendly with Mussolini's son Bruno. Ponzi did well for a while, but eventually it fell apart. He became enmeshed in what he claimed were efforts to expose a smuggling ring operated within the airline. By 1942 he was out of a job. He made ends meet by running a small rooming house in Rio de Janeiro and teaching English in a private school. Soon the momentary millionaire was living on seventy-five dollars a month, though he optimistically called it “quite a tidy sum here.” His eyesight and his health began to fail, and he remained weakened from a heart attack that had struck him seven years to the day after his deportation.

In the meantime, Rose supported herself working as the bookkeeper and de facto manager of the Cocoanut Grove, a Boston nightclub partially owned by her divorce lawyer, Barnett Welansky. Rose found herself thrust unwillingly back into the headlines in November 1942, when a fast-moving fire claimed the lives of 492 people at the nightclub. Tired after a long day of work, Rose had resisted the urgings of friends to remain at the club that night for a party. Instead she'd gone home early, a decision that probably saved her life. Later, she became a key witness in the hearings to assess blame.

Even after the divorce, Ponzi and Rose corresponded with some regularity and with obvious affection. Ponzi sent her notes at Christmas and on her birthday, usually addressed to “My dear Rose” and signed “Your Charlie.” Sometimes he sent kisses, and sometimes she sent photos in return. In one 1941 letter, Rose coyly inquired if Ponzi was married. “Of course I am, in a way,” he answered. “I am married to you, even if it is a one-sided and long-distance affair.” When a Brazilian friend urged him to marry a forty-five-year-old woman who could nurse him through his last years, Ponzi scoffed: “If forty-five was my measure, I would rather take it in three installments of fifteen each.”

The nightclub fire seemed to draw the two closer. When he learned that Rose had survived, Ponzi poured out his heart. “I have missed you terribly,” he wrote. “I have thought you lost forever, and under circumstances more horrible than death itself. I don't know how the shock did not kill me right then and there. I believe it was because somehow there still remained a dim ray of hope at the bottom of my heart: hope that the gods would not be so unmerciful to you.”

“Perhaps I made a mess of your life but it was not for lack of the necessary sentiment,” Ponzi continued. “Here I am, past sixty-one, thousands of miles away from you, physically separated from you these past nine years, legally a stranger to you, and yet feeling toward you the same as I did that night in June when I took you home from the first movies we saw together in Somerville Avenue.”

Their letters continued, and several times each tiptoed around the possibility of getting back together, either for a visit by Rose to Brazil or an attempt by Ponzi to return to the United States. “Dear Sweet Thing,” Ponzi wrote in 1947. “Decidedly you have lost all sense of morals and social behavior! What do you mean by suggesting that I come up there and make myself at home in your apartment? What would the people say of you . . . living with a strange man? I am just joking, dear, so as to forget the tragic side of the thing: the impossibility of going with it. As to your coming down here, it is entirely out of the question not only for the reasons you mention but also because life here would be unbearable for you.” They continued writing to each other, long letters that described daily life and the comings and goings of old friends Ponzi had not seen in decades. Once Ponzi tried to enlist Rose in a moneymaking idea involving the importation of trucks, pens, watches, radios, clocks, and other goods from the United States. But the deals evaporated with Ponzi's diminishing finances and failing health, and their letters became less frequent.

By 1948, Ponzi was almost blind. A brain hemorrhage robbed him of control of his left leg and left arm. He lived in a small apartment with a young family and subsisted on a small pension from the Brazilian government. As his body weakened, he spent increasing amounts of time on the charity ward of a Rio hospital. A photograph of him there shows a man who looks much older than his years, his bald head propped on a pillow, his frail body swimming in an ill-fitting hospital gown. A reporter for the Associated Press found him there. Though the reporter showed no signs of realizing it, Ponzi took the opportunity of a final interview to unburden himself as never before. During his trials he had claimed innocence, and even in his memoirs Ponzi had danced around the true nature of his investment business. But with the reporter at his hospital bedside, Ponzi came clean.