Category Archives: Events

Scandal!: Ponzi’s fate

The Museum is opening a new exhibition, Scandal! Financial Crime, Chicanery and Corruption that Rocked America, on April 29th and we’ve been doing a lot of research on different topics ranging from the first major financial scandal in the United States to the history of Ponzi schemes and instances of egregious disregard for corporate governance.  Unfortunately, we won’t be able share all of the information and interesting tidbits we’ve amassed over the last few months. Instead of letting these juicy facts go to waste, we’ve decided to share some of them via the blog.

It wouldn’t be possible to put on an exhibition on financial scandals without a portion dedicated to Charles Ponzi, the namesake of the Ponzi scheme.  We’ve been researching Charles Ponzi and two other infamous Ponzi artists.  Each of the three men paid for their crimes after their schemes unraveled. Although all three men’s fates have garnered attention and been featured on the covers of newspapers around the world, Charles Ponzi’s is probably the most prolonged and intriguing. 

Ponzi’s scheme was exposed in 1920 by investigative reporting by the Boston Post (the paper is now defunct, but won a Pulitzer in 1921 for their coverage of Ponzi’s crimes) and financial reporter Clarence Barron (founder of Barron’s and a famous financial journalist of his time).  Ponzi was charged by the Federal Prosecutor for two indictments to which he reluctantly pled guilty and served only three and a half years of a 5-year sentence in federal prison.  During his federal prison sentence the state of Massachusetts additionally charged him with 22 charges of larceny for the same scheme, and he was forced to immediately return to court.  Nearly penniless in jail, Ponzi represented himself in court, and to the surprise of many (especially the prosecutors), Ponzi was actually quite deft in the courtroom.  On the state charge of larceny he argued that a promise of profits is not a crime because it is simply a promise and in regards to investments, promises may be broken when circumstances change. His aptitude for law panicked the state prosecutors who changed the charge to only 12 indictments (this seemed advantageous to Ponzi at the time but worked to his disadvantage when he was tried for them in another case later) and was acquitted on all charges by a jury. 

After his early release on parole in 1924, Ponzi’s freedom didn’t last long because only a few months later the state of Massachusetts responded with a vengeance and charged Ponzi with five of the remaining indictments he had originally been charged.  He was forced back to court in February 1925.  This trial ended in a deadlock, requiring a third state trial later that year.  Having effectively been tried four times for the same scheme, Ponzi was found guilty again on this third state trial.  Before he was sentenced, though, he escaped to Florida and elsewhere in the South where he attempted another scheme but gave up, traveled around the Southern United States where he requested a deal of a presidential pardon in exchange for his immediate deportation (which neither President Coolidge not Mussolini acknowledged) and eventually surrendered himself to authorities to serve seven years in jail. Ponzi was released early again on parole in February 1934.  As the Bennington Evening Banner from July 1934 here reports, the United States continued hunting Ponzi after his release from state prison and pursued his deportation. He petitioned the charges against him, claiming double jeopardy, as the Bennington Evening Banner reports on his request for pardon from Massachusetts Governor Joseph Ely:

He urged that the state conviction and a federal conviction of using the mails to defraud were based on the same offense and that only one charge of moral turpitude was involved. Whether or not he succeeds in halting execution of the federal deportation order which has been pending for some months since his release from the Massachusetts state prison Ponzi will remain in this country until Sunday at least.

In the meantime he planned to apply for a writ for habeas corpus.

Ponzi’s appeal was denied yet again, and he was deported back to his homeland in Italy where he lived for a short while before moving to Brazil.  He attempted to find his fortune there but died in poverty there in 1948.

First Kaufman Series Event 2010- David Walker

Thank you to everyone who attended this year’s first Kaufman Lecture and Symposia Series event on Tuesday evening. David Walker, former Comptroller General of the United States and head of the Government Accountability Office from 1998 to 2008 and current chairman of the United Nations Independent Audit Advisory Committee (see full bio here), spoke to a packed room about the current state and future of the United States and our economy. Promoting his new book, Comeback America, Walker touched on issues of fiscal responsibility, the necessity of policy and operational reforms in government, problems concerning US spending habits and values and the deficit of leadership in government, among other topics. Although Walker painted a somewhat grim picture with his statistics and forecasts, he says his book is about solutions. Signed copies of Comeback America are now available in the Museum Shop. If you would like to hear David Walker’s full speech, it is now available on the MoAF website or there is a short clip of it below.

Welcome to MoAF’s new blog!

Welcome to the Museum of American Finance’s new blog!  We are currently in the process of launching several exciting new social media initiatives.  In addition to the Museum’s current new media offerings such as our website, MoAF.org; our new wiki, Recessipedia.com; and our Facebook group and fan pages, we will be rolling out a YouTube channel that will aggregate Museum videos and serve as an online arena for shorter, informal video features.  We plan to profile staff members, provide sneak peeks into the creation of upcoming exhibitions, focus on important objects from the archive and document the behind-the-scenes accounts that usually remain hidden from visitors.  In addition, the Museum can now be followed on Twitter via our handle, @FinanceMuseum  (recent tweets can also be viewed on the blog in the top right hand corner of the page).

These new media platforms will provide fresh venues for the Museum to spread the word about upcoming events and programs, and connect visitors in new and innovative ways.  These platforms will help create a more accessible museum experience, and will enable more interaction between the Museum and patrons – both in New York and beyond – allowing visitors to continue their education about finance and financial history after they leave the Museum. We look forward to hearing from you via comments and e-mails, and invite you to tell us what you’d like to see on the blog, what you’re interested in learning about the Museum, and how you think we’re doing.