1 00:00:02,560 --> 00:00:05,760 Speaker 1: You're listening to American Shadows, a production of I Heart 2 00:00:05,880 --> 00:00:18,480 Speaker 1: Radio and Grimm and Mild from Aaron Bankey. Year old 3 00:00:18,520 --> 00:00:21,520 Speaker 1: William Miller had a wife and baby, but little else. 4 00:00:22,280 --> 00:00:26,400 Speaker 1: The times were tough in Brooklyn, New York, but that 5 00:00:26,560 --> 00:00:31,080 Speaker 1: was before he started the Franklin Syndicate. Miller, who was 6 00:00:31,160 --> 00:00:34,560 Speaker 1: the president of a prominent local Christian endeavor society, had 7 00:00:34,640 --> 00:00:38,440 Speaker 1: speculated with some success in the stock market. He claimed 8 00:00:38,479 --> 00:00:42,239 Speaker 1: to have insider information and a deal investors couldn't refuse 9 00:00:42,680 --> 00:00:46,640 Speaker 1: a ten percent return on their investment per week. His 10 00:00:46,760 --> 00:00:50,360 Speaker 1: confidence and promise of quick wealth convinced three friends to 11 00:00:50,400 --> 00:00:55,080 Speaker 1: give him money, jump starting his new investment company. Oscar 12 00:00:55,160 --> 00:00:58,800 Speaker 1: Berg's Room invested in the Franklin Syndicate, first with ten dollars. 13 00:00:59,400 --> 00:01:02,640 Speaker 1: Miller and to him a receipt guaranteeing against loss and 14 00:01:02,680 --> 00:01:06,600 Speaker 1: promising one dollar weekly dividends until the principal was withdrawn. 15 00:01:07,920 --> 00:01:12,360 Speaker 1: A week later, Bergstrom invested another ten dollars. It was 16 00:01:12,360 --> 00:01:16,319 Speaker 1: a con of course, Miller's ten percent weekly return promised 17 00:01:16,319 --> 00:01:20,400 Speaker 1: a five hundred and twenty percent yearly return. Miller had 18 00:01:20,480 --> 00:01:24,920 Speaker 1: no insider information and little intention of guaranteeing anything except 19 00:01:25,000 --> 00:01:28,840 Speaker 1: pocketing the money. Each week, he offered new clients a 20 00:01:28,920 --> 00:01:32,039 Speaker 1: choice would take a ten percent dividend or reinvest it. 21 00:01:32,840 --> 00:01:35,200 Speaker 1: All Miller had to do was keep ten percent of 22 00:01:35,240 --> 00:01:38,560 Speaker 1: their cash to keep the con going. Investors thought the 23 00:01:38,560 --> 00:01:41,200 Speaker 1: deal was so good that they told others, and Miller's 24 00:01:41,280 --> 00:01:44,959 Speaker 1: scheme grew. He rented out the top floor of a house, 25 00:01:45,120 --> 00:01:48,960 Speaker 1: hiring several assistants to handle the cash while he did 26 00:01:49,000 --> 00:01:51,960 Speaker 1: invest in the stock market with one thousand dollars. Once, 27 00:01:52,360 --> 00:01:55,160 Speaker 1: he lost all but five dollars and sixty cents and 28 00:01:55,240 --> 00:01:58,960 Speaker 1: vowed to never put money in Wall Street again. By 29 00:01:59,000 --> 00:02:02,080 Speaker 1: November of eighteen nine de nine, Miller had twelve thousand 30 00:02:02,080 --> 00:02:05,360 Speaker 1: investors and was raking in upwards of sixty three thousand 31 00:02:05,440 --> 00:02:09,959 Speaker 1: dollars a day. With such wild success, it didn't take 32 00:02:10,000 --> 00:02:13,160 Speaker 1: long for newspapers to begin digging into how the Franklins 33 00:02:13,160 --> 00:02:16,240 Speaker 1: indicate worked. Nor did it take long for a shady 34 00:02:16,320 --> 00:02:19,600 Speaker 1: lawyer to see through the scheme and offer Miller his services. 35 00:02:20,680 --> 00:02:24,519 Speaker 1: Attorney Robert Ahman advised Miller to get back every receipt 36 00:02:25,000 --> 00:02:28,120 Speaker 1: They were signed confessions and promissory notes from Miller to 37 00:02:28,200 --> 00:02:31,920 Speaker 1: his victims. After all, they needed to be destroyed. A 38 00:02:32,040 --> 00:02:35,040 Speaker 1: letter was sent to each client, asking for the receipts 39 00:02:35,240 --> 00:02:40,120 Speaker 1: to compare against the certificates coming. Do you understand? Miller 40 00:02:40,200 --> 00:02:42,840 Speaker 1: knew that the con would soon end, and with the 41 00:02:42,840 --> 00:02:46,440 Speaker 1: receipts gone, he'd get away with the cash. He couldn't 42 00:02:46,440 --> 00:02:49,600 Speaker 1: complain it had been a great scam. What he didn't 43 00:02:49,600 --> 00:02:54,040 Speaker 1: know was that Aman was conning him. When the newspapers 44 00:02:54,080 --> 00:02:57,359 Speaker 1: reported on the Franklin syndicate, people who had invested refused 45 00:02:57,400 --> 00:03:00,480 Speaker 1: to believe Miller had rooked them, though some had begun 46 00:03:00,560 --> 00:03:03,680 Speaker 1: to step forward and ask for their money. Instead of 47 00:03:03,680 --> 00:03:07,040 Speaker 1: paying back what he could, Amon suggested Miller hide the money. 48 00:03:07,400 --> 00:03:10,240 Speaker 1: A mon would even pay passage to Montreal, Canada. Until 49 00:03:10,240 --> 00:03:15,400 Speaker 1: the investigation blew over. Miller handed the unscrupulous lawyer every cent. 50 00:03:16,600 --> 00:03:19,359 Speaker 1: When New York police arrived with an arrest warrant, Miller 51 00:03:19,480 --> 00:03:23,520 Speaker 1: was gone, leaving behind his wife and baby daughter. It 52 00:03:23,560 --> 00:03:26,359 Speaker 1: didn't take long before he was found and transported back 53 00:03:26,360 --> 00:03:29,600 Speaker 1: to New York, and that's when he realized a Moan 54 00:03:29,880 --> 00:03:34,000 Speaker 1: had duped him. Miller stood trial and received a ten 55 00:03:34,080 --> 00:03:37,840 Speaker 1: year sentence. Three years later, the district attorney had enough 56 00:03:37,880 --> 00:03:40,680 Speaker 1: evidence against Aman to put him away for four years. 57 00:03:41,520 --> 00:03:43,880 Speaker 1: When a Moan was released, he went right back to 58 00:03:43,920 --> 00:03:47,760 Speaker 1: spending the money. When Miller's sentence ended, he was broke. 59 00:03:48,720 --> 00:03:53,800 Speaker 1: Not long afterward, he contracted tuberculosis. While he faded from history, 60 00:03:54,000 --> 00:03:57,520 Speaker 1: another con man was about to take his place. I'm 61 00:03:57,560 --> 00:04:10,200 Speaker 1: Lauren Vogelbaum. Welcome to American shadows. Carlo claimed his family 62 00:04:10,280 --> 00:04:13,400 Speaker 1: had been wealthy but had fallen on hard times shortly 63 00:04:13,440 --> 00:04:17,640 Speaker 1: after his birth. In his mother still went by her 64 00:04:17,720 --> 00:04:21,279 Speaker 1: upper class title of Donna Emelda, name worthy of respect 65 00:04:21,320 --> 00:04:24,800 Speaker 1: in Italy. In his teen years, Carlo took a job 66 00:04:24,839 --> 00:04:27,440 Speaker 1: as a postal worker, but the family insisted on a 67 00:04:27,480 --> 00:04:30,720 Speaker 1: good education. They had managed to save enough to send 68 00:04:30,839 --> 00:04:34,719 Speaker 1: him to the University of Romolasapienza, and once he was accepted, 69 00:04:34,960 --> 00:04:39,080 Speaker 1: Carlo quit his job. He made friends with other students 70 00:04:39,120 --> 00:04:42,279 Speaker 1: who had a similar mindset that college was a four 71 00:04:42,360 --> 00:04:46,880 Speaker 1: year vacation from responsibilities or family. While many of these 72 00:04:46,920 --> 00:04:50,919 Speaker 1: friends had wealthy families who supported their lifestyles, Carlo did not, 73 00:04:51,320 --> 00:04:54,080 Speaker 1: and quickly spent all the money he and his parents 74 00:04:54,080 --> 00:04:58,520 Speaker 1: had saved. Left with no degree and no cash. His 75 00:04:58,600 --> 00:05:02,080 Speaker 1: parents encouraged him to following the footsteps of other Italian men, 76 00:05:02,720 --> 00:05:07,200 Speaker 1: go to America, work hard, and come back rich of course, 77 00:05:07,320 --> 00:05:10,920 Speaker 1: not everyone who ventured the United States returned wealthy, but 78 00:05:11,040 --> 00:05:15,960 Speaker 1: Carlo felt certain he'd easily restore the family fortune. His 79 00:05:16,080 --> 00:05:19,000 Speaker 1: parents sent him with a decent pocketful of money, but 80 00:05:19,120 --> 00:05:22,440 Speaker 1: Carlo gambled away all but two dollars and fifty cents 81 00:05:22,520 --> 00:05:26,719 Speaker 1: by the time he arrived in Boston on November fifteen three. 82 00:05:27,400 --> 00:05:30,120 Speaker 1: Still certain he would earn it all back, Carlo took 83 00:05:30,160 --> 00:05:33,320 Speaker 1: a train to Pittsburgh to stay with a relative. Along 84 00:05:33,320 --> 00:05:37,480 Speaker 1: the way, he busied himself with learning English, mostly swear words. 85 00:05:38,560 --> 00:05:42,440 Speaker 1: His vocabulary and history of squandering the family savings did 86 00:05:42,520 --> 00:05:46,960 Speaker 1: little to impress his cousin Giuseppe. Still, a family was family, 87 00:05:47,120 --> 00:05:49,600 Speaker 1: and the grocer set twenty one year old to work 88 00:05:49,720 --> 00:05:54,520 Speaker 1: tracking shipments and doing paperwork. A year later, Carlo headed 89 00:05:54,560 --> 00:05:56,719 Speaker 1: to New York to make a new life for himself. 90 00:05:57,360 --> 00:06:00,200 Speaker 1: Gizeppe warned his younger cousin not to get call up 91 00:06:00,200 --> 00:06:03,040 Speaker 1: in any con games, using William Miller as an example. 92 00:06:03,839 --> 00:06:06,479 Speaker 1: But the big city held promise for Carlo, and he 93 00:06:06,560 --> 00:06:09,880 Speaker 1: set out to make his fortune. He had learned more 94 00:06:09,920 --> 00:06:12,680 Speaker 1: than curse words by then, and was fluent in English. 95 00:06:13,040 --> 00:06:16,240 Speaker 1: He chose to americanize his name, knowing by Charles instead 96 00:06:16,279 --> 00:06:19,640 Speaker 1: of Carlo, and for the next three years he took 97 00:06:19,680 --> 00:06:24,360 Speaker 1: an assortment of jobs at pressing suits, waiting tables, selling insurance, dishwashing, 98 00:06:24,560 --> 00:06:28,400 Speaker 1: and preparing sewing machines. Fed up, he took the last 99 00:06:28,400 --> 00:06:30,839 Speaker 1: of his money and bought a ticket to Montreal, Canada, 100 00:06:31,000 --> 00:06:35,040 Speaker 1: Settling into a community with fellow immigrants, one of them 101 00:06:35,080 --> 00:06:38,960 Speaker 1: told him about Luigi or Lewis Zarassi, a highly successful 102 00:06:39,000 --> 00:06:43,039 Speaker 1: Italian immigrant who had opened a bank. Charles set his 103 00:06:43,080 --> 00:06:45,800 Speaker 1: sights on working for the banker. He put on a 104 00:06:45,880 --> 00:06:50,000 Speaker 1: nice suit, hoping it made him look older than When 105 00:06:50,000 --> 00:06:52,920 Speaker 1: he reached the bank, he told the secretary that Charles 106 00:06:53,000 --> 00:06:57,080 Speaker 1: Ponzi was there to speak with Mr. Zarassi. Believing that 107 00:06:57,120 --> 00:06:59,400 Speaker 1: he had an appointment, the secretary led him to an 108 00:06:59,440 --> 00:07:03,320 Speaker 1: office and shut the door behind him. Louis Serassie, a 109 00:07:03,480 --> 00:07:06,799 Speaker 1: stout and jolly man with a pension free cigars, entered 110 00:07:06,839 --> 00:07:10,400 Speaker 1: shortly afterward, curious to see who had so easily slipped 111 00:07:10,400 --> 00:07:15,280 Speaker 1: past a secretary. Charles took to flattery before asking for 112 00:07:15,360 --> 00:07:19,640 Speaker 1: a job. Louis was floored. Up until that moment, he 113 00:07:19,680 --> 00:07:22,200 Speaker 1: had believed the young man seated before him had come 114 00:07:22,240 --> 00:07:26,640 Speaker 1: to invest money. At first, the banker nearly laughed and 115 00:07:26,680 --> 00:07:29,960 Speaker 1: thought to usher Charles out the door. Then he thought 116 00:07:29,960 --> 00:07:33,280 Speaker 1: the better of it. The bank needed another teller, and 117 00:07:33,360 --> 00:07:35,760 Speaker 1: the young man had impressed him with his confidence and 118 00:07:35,880 --> 00:07:39,080 Speaker 1: ability to talk his way past the staff. He offered 119 00:07:39,160 --> 00:07:44,560 Speaker 1: him an assistant teller's job. Charles accepted and made himself indispensable. 120 00:07:45,640 --> 00:07:48,600 Speaker 1: Seeing potential, Louis took a risk and brought the young 121 00:07:48,640 --> 00:07:53,000 Speaker 1: teller in on his investment schemes. In short, Louis had 122 00:07:53,040 --> 00:07:56,960 Speaker 1: made considerable well by robbing Peter to pay Paul taking 123 00:07:56,960 --> 00:08:02,600 Speaker 1: deposits to fund real estate investments. The job suited Charles. 124 00:08:02,640 --> 00:08:06,000 Speaker 1: His charm and confidence brought in even more money. He 125 00:08:06,040 --> 00:08:08,840 Speaker 1: even managed to integrate with the Zerossi family, flirting with 126 00:08:08,920 --> 00:08:13,440 Speaker 1: Louis's daughter. But the more he learned about his boss's business, 127 00:08:13,480 --> 00:08:17,880 Speaker 1: the more worried Charles became. The bank soon failed and 128 00:08:17,960 --> 00:08:20,640 Speaker 1: Louis fled to Mexico with most of the remaining money. 129 00:08:21,600 --> 00:08:24,640 Speaker 1: Charles stayed to help the family his boss had abandoned. 130 00:08:25,280 --> 00:08:27,800 Speaker 1: To keep him afloat, he forged a check, but was 131 00:08:27,880 --> 00:08:32,680 Speaker 1: quickly caught and sentenced to a short prison term. Upon release, 132 00:08:32,720 --> 00:08:37,040 Speaker 1: he found a new hustle, smuggling immigrants. Across the border again, 133 00:08:37,160 --> 00:08:41,400 Speaker 1: he was caught and sent to prison. During his second incarceration, 134 00:08:41,600 --> 00:08:45,200 Speaker 1: he met Charles W. Morse, a wealthy Wall Street business man. 135 00:08:46,160 --> 00:08:49,520 Speaker 1: Before long, Charles Ponsey had learned everything he needed to 136 00:08:49,600 --> 00:09:02,280 Speaker 1: set up a brand new scheme. While riding on a 137 00:09:02,280 --> 00:09:04,680 Speaker 1: street car one day, he noticed the daughter of a 138 00:09:04,679 --> 00:09:09,520 Speaker 1: local grocer, Rose Marie Ganetso was very pretty with dark 139 00:09:09,559 --> 00:09:12,760 Speaker 1: eyes and curly dark hair, but she was also half 140 00:09:12,840 --> 00:09:16,880 Speaker 1: his age. He charmed her, putting on an air of sophistication. 141 00:09:17,960 --> 00:09:20,520 Speaker 1: She looked past the age gap, and the two eventually 142 00:09:20,559 --> 00:09:25,520 Speaker 1: wed in n Rose did everything asked of her, including 143 00:09:25,600 --> 00:09:29,040 Speaker 1: wearing her hair long like William Gish, going against the 144 00:09:29,080 --> 00:09:31,480 Speaker 1: bobbed hair trend. Because her husband had a crush on 145 00:09:31,520 --> 00:09:36,720 Speaker 1: the film star, she never questioned their finances. Rose worked 146 00:09:36,760 --> 00:09:39,400 Speaker 1: full time and did the housework while her husband helped 147 00:09:39,480 --> 00:09:44,120 Speaker 1: run her father's grocery. After mismanaging the money and bankrupting 148 00:09:44,120 --> 00:09:47,720 Speaker 1: her family's business, Charles started an advertising company with the 149 00:09:47,760 --> 00:09:50,800 Speaker 1: money Rose maid, but when he got behind on the 150 00:09:50,800 --> 00:09:53,240 Speaker 1: rent and phone bill, he applied for a loan, but 151 00:09:53,400 --> 00:09:56,480 Speaker 1: the bank refused. A break came in the form of 152 00:09:56,480 --> 00:09:59,760 Speaker 1: a business letter from Spain. The letter contained an international 153 00:10:00,040 --> 00:10:04,120 Speaker 1: still Reply coupon. He stared at the small scrap of paper, 154 00:10:04,400 --> 00:10:07,560 Speaker 1: his brain spinning. The coupon was a means for the 155 00:10:07,600 --> 00:10:10,600 Speaker 1: recipient to send a letter back. The stamp was worth 156 00:10:10,640 --> 00:10:13,520 Speaker 1: about a nickel in Spain, but some ten percent more 157 00:10:13,640 --> 00:10:18,280 Speaker 1: in the States. If he purchased postal coupons from economically 158 00:10:18,320 --> 00:10:21,440 Speaker 1: weaker countries, he stood to make a serious return on 159 00:10:21,520 --> 00:10:25,480 Speaker 1: his investment. He gave the endeavor an official sounding name, 160 00:10:25,720 --> 00:10:29,720 Speaker 1: the Securities Exchange Company. To fund it, he recalled what 161 00:10:29,760 --> 00:10:32,360 Speaker 1: had learned in prison and set up a stock company 162 00:10:32,440 --> 00:10:36,760 Speaker 1: to raise money. Like Miller, Charles went to his friends first, 163 00:10:37,040 --> 00:10:41,040 Speaker 1: promising to double their investment in three months. By Ny 164 00:10:41,200 --> 00:10:43,920 Speaker 1: he had managed to entice eighteen clients to invest a 165 00:10:43,960 --> 00:10:47,360 Speaker 1: hundred dollars each. The next month, he paid them from 166 00:10:47,400 --> 00:10:52,080 Speaker 1: money taken in by new investors. Business boomed. He rented 167 00:10:52,080 --> 00:10:54,800 Speaker 1: a larger office and hired assistance, paying them a ten 168 00:10:54,800 --> 00:10:58,280 Speaker 1: percent commission for every new account they brought in. In turn, 169 00:10:58,400 --> 00:11:01,320 Speaker 1: they hired sub agents, setting them in five percent for 170 00:11:01,360 --> 00:11:05,920 Speaker 1: each new client. By March, monthly investments increased from five 171 00:11:05,960 --> 00:11:10,880 Speaker 1: thousand dollars to a staggering so Charles and his agents 172 00:11:10,880 --> 00:11:14,240 Speaker 1: branched out, seeking clients from all over New York, New Jersey, 173 00:11:14,360 --> 00:11:17,720 Speaker 1: and the rest of New England. Words spread about the 174 00:11:17,760 --> 00:11:22,040 Speaker 1: impressive gains other investors were making. To make himself look 175 00:11:22,080 --> 00:11:25,520 Speaker 1: good to newcomers, Charles handed out expensive cigars and set 176 00:11:25,520 --> 00:11:29,000 Speaker 1: his family up with an enviable lifestyle, all while projecting 177 00:11:29,080 --> 00:11:33,400 Speaker 1: a low key, average joe image. He frequented small cafes 178 00:11:33,520 --> 00:11:37,600 Speaker 1: and claimed he never liked discussing money. But as much 179 00:11:37,640 --> 00:11:40,120 Speaker 1: as he shared some of his wealth, he kept Rose 180 00:11:40,160 --> 00:11:43,600 Speaker 1: in the dark about their finances. He also convinced her 181 00:11:43,640 --> 00:11:48,160 Speaker 1: family to invest. Soon. Rose's siblings, aunts and uncles handed 182 00:11:48,160 --> 00:11:52,000 Speaker 1: over their money, and, despite having bankrupted the grocery, if, 183 00:11:52,080 --> 00:11:55,920 Speaker 1: Rose trusted him this time, so did they. He moved 184 00:11:56,000 --> 00:11:59,320 Speaker 1: Rose into a large home in Lexington. He hired maids, 185 00:11:59,360 --> 00:12:01,680 Speaker 1: a cook, and a chauffeur to drive the couple around 186 00:12:01,720 --> 00:12:04,480 Speaker 1: in the brand new car that cost him twelve thousand dollars. 187 00:12:05,320 --> 00:12:07,920 Speaker 1: Then he told Rose they'd soon take the honeymoon he 188 00:12:07,960 --> 00:12:11,480 Speaker 1: had promised a trip to Italy. Instead, he used the 189 00:12:11,480 --> 00:12:13,440 Speaker 1: money to bring his mother to the States to live 190 00:12:13,480 --> 00:12:17,880 Speaker 1: with them. With his new wealth, Charles felt content. Even 191 00:12:17,920 --> 00:12:20,120 Speaker 1: his mother was proud of him for becoming a millionaire, 192 00:12:20,720 --> 00:12:23,600 Speaker 1: but her health didn't last long, and she passed away 193 00:12:23,640 --> 00:12:28,480 Speaker 1: shortly after arriving. He buried his mother in style, even 194 00:12:28,520 --> 00:12:31,120 Speaker 1: donating ten thousand dollars to a children's home and his 195 00:12:31,160 --> 00:12:35,160 Speaker 1: mother's name. To outsiders, Charles was not only a devoted 196 00:12:35,200 --> 00:12:37,920 Speaker 1: and loving son and husband, but a trustworthy member of 197 00:12:37,960 --> 00:12:42,400 Speaker 1: the community, a real stand up guy. Throughout the summer 198 00:12:42,440 --> 00:12:46,200 Speaker 1: of nine, he continued to rake in the money, even 199 00:12:46,200 --> 00:12:48,360 Speaker 1: though he knew it was a house of cards. He 200 00:12:48,520 --> 00:12:50,640 Speaker 1: figured that as long as he could keep bringing in 201 00:12:50,720 --> 00:12:54,840 Speaker 1: new clients, the scheme and his lifestyle could go on forever. 202 00:13:02,160 --> 00:13:05,480 Speaker 1: People adored Charles. He used his charm and wit with 203 00:13:05,559 --> 00:13:09,040 Speaker 1: everyone he met. His clients seemed to be earning huge 204 00:13:09,040 --> 00:13:13,040 Speaker 1: amounts of money. Everyone believed he was a financial prodigy. 205 00:13:13,480 --> 00:13:18,920 Speaker 1: All but one. William Miller, having just been released from prison, 206 00:13:19,320 --> 00:13:22,440 Speaker 1: commented to a reporter that though he may be dense, 207 00:13:22,640 --> 00:13:26,439 Speaker 1: he couldn't understand how Charles Palsy had made so much 208 00:13:26,520 --> 00:13:31,120 Speaker 1: money in such a short period of time. Within days, 209 00:13:31,160 --> 00:13:34,960 Speaker 1: the cracks began to show in charles scheme. The Boston 210 00:13:35,000 --> 00:13:40,160 Speaker 1: Post's headline on July doubles the money within three months, 211 00:13:41,120 --> 00:13:45,320 Speaker 1: interest paid in forty five days. The article concluded that 212 00:13:45,400 --> 00:13:48,079 Speaker 1: for the business to be legitimate, a hundred and sixty 213 00:13:48,160 --> 00:13:51,480 Speaker 1: million coupons would have to be in circulation. That was 214 00:13:51,520 --> 00:13:56,439 Speaker 1: a problem since only twenty seven thousand existed. Two days later, 215 00:13:56,600 --> 00:13:59,280 Speaker 1: Charles arrived at his office to discover a long line 216 00:13:59,280 --> 00:14:03,080 Speaker 1: of clients standing four deep. They had come to collect. 217 00:14:04,800 --> 00:14:08,240 Speaker 1: Fortunately for him, many others still wanted in on the deal. 218 00:14:09,240 --> 00:14:12,080 Speaker 1: Days later, Post Office officials told the public that the 219 00:14:12,080 --> 00:14:16,800 Speaker 1: coupon scenario was impossible. Charles feared the worst, but his 220 00:14:16,920 --> 00:14:20,320 Speaker 1: luck held once more. The officials insistence that he was 221 00:14:20,360 --> 00:14:24,440 Speaker 1: conning the public only served to bolster his scheme. To 222 00:14:24,480 --> 00:14:28,200 Speaker 1: help mitigate the newspapers and government's warnings, Charles hired a 223 00:14:28,240 --> 00:14:32,840 Speaker 1: publicity agent, William McMaster's, instantly opened the company's books to 224 00:14:32,880 --> 00:14:37,000 Speaker 1: the District Attorney's office as a show of cooperation and 225 00:14:37,080 --> 00:14:40,760 Speaker 1: a way to calm his investigators. Charles declined new clients 226 00:14:40,960 --> 00:14:46,000 Speaker 1: and claimed he had nothing to hide. DA investigator, Edwin Pride, 227 00:14:46,040 --> 00:14:50,480 Speaker 1: began the laborious task of sifting through the records. With 228 00:14:50,520 --> 00:14:54,040 Speaker 1: word that the securities Exchange Company was no longer taking clients, 229 00:14:54,320 --> 00:14:57,560 Speaker 1: investors panicked, they made a run on his office demanding 230 00:14:57,560 --> 00:15:01,120 Speaker 1: their money. Ever, the charmer Arles told his staff to 231 00:15:01,160 --> 00:15:04,720 Speaker 1: refund every client who had a voucher. He even ordered 232 00:15:04,760 --> 00:15:08,400 Speaker 1: coffee and sandwiches for those standing in line. Many of 233 00:15:08,440 --> 00:15:11,000 Speaker 1: those in line thought Charles wouldn't be so ready to 234 00:15:11,040 --> 00:15:13,360 Speaker 1: refund the money or supply food and drink if the 235 00:15:13,440 --> 00:15:17,120 Speaker 1: rumors were true. Many left, deciding to keep their investments 236 00:15:17,160 --> 00:15:19,560 Speaker 1: with him. At the end of the day, he had 237 00:15:19,560 --> 00:15:23,080 Speaker 1: paid out a million dollars. While that's a lot of cash, 238 00:15:23,320 --> 00:15:26,240 Speaker 1: he had managed to only give back their initial principle, 239 00:15:26,520 --> 00:15:31,160 Speaker 1: which saved him considerable money. His nonchalance towards the d 240 00:15:31,240 --> 00:15:34,720 Speaker 1: a's office delighted the papers, which always had a headline. 241 00:15:35,680 --> 00:15:38,000 Speaker 1: Charles pointed out to reporters that he was under no 242 00:15:38,080 --> 00:15:41,720 Speaker 1: obligation to reveal his business details. He even joked that 243 00:15:41,760 --> 00:15:44,560 Speaker 1: the idea of cash and coupons was his idea alone, 244 00:15:44,800 --> 00:15:46,720 Speaker 1: and if the government wanted to know how he'd done it, 245 00:15:46,760 --> 00:15:50,080 Speaker 1: they'd have to figure it out for themselves. Postage stamp 246 00:15:50,200 --> 00:15:53,320 Speaker 1: king defies federal government to learn how he profits, read 247 00:15:53,320 --> 00:15:59,680 Speaker 1: the Washington Post On. Finally, the Post Office partnered with McMasters, 248 00:15:59,680 --> 00:16:03,440 Speaker 1: who turned on his former boss. He announced the Charles 249 00:16:03,560 --> 00:16:06,120 Speaker 1: was two million dollars in depth if he didn't pay 250 00:16:06,160 --> 00:16:08,480 Speaker 1: interest on the notes, and four and a half million 251 00:16:08,560 --> 00:16:12,360 Speaker 1: in debt with interest. Another client run on the office 252 00:16:12,400 --> 00:16:16,080 Speaker 1: set Charles back once more. Furious, he threatened to sue 253 00:16:16,120 --> 00:16:20,400 Speaker 1: the Post Office and McMaster's. In an attempt to calm investors, 254 00:16:20,520 --> 00:16:23,840 Speaker 1: he gave a luncheon and speech at Boston's Hotel Bellvue. 255 00:16:24,240 --> 00:16:26,800 Speaker 1: He told the audience that to secure the coupons needed, 256 00:16:26,840 --> 00:16:30,720 Speaker 1: he had worked with foreign governments. Once again, Charles seemed 257 00:16:30,760 --> 00:16:34,880 Speaker 1: to come out on top. Then, just days later, the 258 00:16:34,920 --> 00:16:38,880 Speaker 1: Boston Post revealed his past prison sentences, including the one 259 00:16:38,920 --> 00:16:41,920 Speaker 1: for the forged check and his involvement with Louis Serassi's 260 00:16:41,960 --> 00:16:46,400 Speaker 1: failed bank and real estate scheme. Soon afterward, another article 261 00:16:46,440 --> 00:16:50,440 Speaker 1: for his prison sentence on immigration fraud surfaced. Knowing and 262 00:16:50,560 --> 00:16:55,000 Speaker 1: arrest was soon coming, Charles turned himself in. This time. 263 00:16:55,080 --> 00:16:58,760 Speaker 1: The newspaper headline read Ponzi wearing his smile even in 264 00:16:58,840 --> 00:17:03,400 Speaker 1: East Cambridge jail. Although he remained smug, Charles knew it 265 00:17:03,440 --> 00:17:07,440 Speaker 1: was over. His house of cards had finally fallen down. 266 00:17:21,280 --> 00:17:24,399 Speaker 1: Charles Ponzi's success was credited in part to how he 267 00:17:24,520 --> 00:17:28,240 Speaker 1: instilled a sense of trust in his victims. He made 268 00:17:28,359 --> 00:17:32,280 Speaker 1: lies sound like the truth. Sure, part of the lore 269 00:17:32,400 --> 00:17:35,480 Speaker 1: was the promise of easy wealth, but Charles knew how 270 00:17:35,480 --> 00:17:39,800 Speaker 1: to connect with his intended targets. The con wasn't original, 271 00:17:40,320 --> 00:17:43,840 Speaker 1: William Miller had proceeded him. Charles wouldn't be the last 272 00:17:43,920 --> 00:17:47,199 Speaker 1: to work such a con either, but we associate this 273 00:17:47,280 --> 00:17:50,920 Speaker 1: type of money scam with him. A Ponzi scheme is 274 00:17:50,960 --> 00:17:54,119 Speaker 1: the act of using new investors to pay off prior ones. 275 00:17:54,600 --> 00:17:56,840 Speaker 1: As long as there are new investors coming in and 276 00:17:57,000 --> 00:18:00,840 Speaker 1: few cashing out, the scheme keeps going. The lore of 277 00:18:00,880 --> 00:18:04,199 Speaker 1: easy money with little risk, coupled with cognitive bias and 278 00:18:04,280 --> 00:18:08,040 Speaker 1: a dose of denial, had Charles investors refusing to believe 279 00:18:08,080 --> 00:18:11,679 Speaker 1: they had been taken until well after his arrest. His 280 00:18:11,800 --> 00:18:15,040 Speaker 1: downfall was sending letters to clients telling them that their 281 00:18:15,080 --> 00:18:19,760 Speaker 1: notes had matured. Arrested on federal charges of larceny and 282 00:18:19,880 --> 00:18:23,879 Speaker 1: mail fraud, he pled guilty. The Attorney General promised that 283 00:18:23,920 --> 00:18:26,600 Speaker 1: of Charles Ponzi was released on bail, he'd have him 284 00:18:26,680 --> 00:18:29,560 Speaker 1: arrested for additional charges and set an even higher bail. 285 00:18:30,680 --> 00:18:34,959 Speaker 1: The financial loss to investors in banks was astounding. Investors 286 00:18:34,960 --> 00:18:38,720 Speaker 1: received thirty cents on the dollar for their investments. Collectively, 287 00:18:38,800 --> 00:18:42,119 Speaker 1: they lost twenty million dollars, which is about two hundred 288 00:18:42,160 --> 00:18:46,920 Speaker 1: million today. Three years after his sentencing, Charles walked out 289 00:18:46,920 --> 00:18:50,879 Speaker 1: of prison of Freeman, but not for long. The state 290 00:18:50,960 --> 00:18:55,680 Speaker 1: had him arrested on larceny charges. Feeling swindled, Charles sued 291 00:18:55,720 --> 00:18:58,119 Speaker 1: the state, claiming he had been led to believe that 292 00:18:58,160 --> 00:19:00,399 Speaker 1: the state would drop its charges if he agreed to 293 00:19:00,400 --> 00:19:03,560 Speaker 1: the federal charges. He also claimed that if he were 294 00:19:03,640 --> 00:19:06,399 Speaker 1: charged for the same crimes twice, albeit in federal and 295 00:19:06,440 --> 00:19:10,000 Speaker 1: state courts, it was double jeopardy. While waiting for the 296 00:19:10,040 --> 00:19:13,359 Speaker 1: Supreme Court to hear the case, Charles set up another scheme, 297 00:19:13,480 --> 00:19:17,280 Speaker 1: selling swamp land in Florida under an alias. The scam 298 00:19:17,400 --> 00:19:20,400 Speaker 1: was short lived, and he was arrested for fraud once more. 299 00:19:21,080 --> 00:19:23,840 Speaker 1: He jumped bail and fled, only to be captured in 300 00:19:23,880 --> 00:19:27,120 Speaker 1: New Orleans and taken to Massachusetts to stand trial and 301 00:19:27,160 --> 00:19:31,240 Speaker 1: eventually serve seven more years. By the time he was 302 00:19:31,280 --> 00:19:34,600 Speaker 1: released in nineteen thirty four, his charm and charisma had 303 00:19:34,640 --> 00:19:39,280 Speaker 1: long faded. An angry crowd met him demanding further justice. 304 00:19:40,000 --> 00:19:44,600 Speaker 1: On October seven, Charles Ponzi was deported to Italy Rose, 305 00:19:44,760 --> 00:19:47,960 Speaker 1: who had stood by him all this time, filed for divorce. 306 00:19:48,680 --> 00:19:50,800 Speaker 1: Her own family had been swindled to the tune of 307 00:19:50,840 --> 00:19:55,520 Speaker 1: sixteen thousand dollars, and she had finally had enough. Charles 308 00:19:55,600 --> 00:19:58,399 Speaker 1: didn't change his ways. He went from one con to 309 00:19:58,440 --> 00:20:01,240 Speaker 1: another in Italy. When none of them panned out, he 310 00:20:01,280 --> 00:20:03,360 Speaker 1: took a job in Brazil as a translator for an 311 00:20:03,359 --> 00:20:07,639 Speaker 1: Italian airline. During World War Two, the airline shut down, 312 00:20:07,920 --> 00:20:13,399 Speaker 1: leaving him unemployed. His health began to suffer. His eyesight failed, 313 00:20:13,640 --> 00:20:18,600 Speaker 1: leaving him nearly blind by night. An American reporter requested 314 00:20:18,640 --> 00:20:23,160 Speaker 1: what would be Charles Ponzi's last interview. The reporter asked 315 00:20:23,200 --> 00:20:27,320 Speaker 1: if he was ever remorseful about the Cohn Charles answered, 316 00:20:27,760 --> 00:20:29,879 Speaker 1: even if they never got anything for it, it was 317 00:20:29,960 --> 00:20:33,600 Speaker 1: cheap at that price. He bragged that it was worth 318 00:20:33,720 --> 00:20:36,520 Speaker 1: the fifteen million dollars he had swindled just to watch 319 00:20:36,640 --> 00:20:39,920 Speaker 1: him pull off what he called the greatest show ever staged. 320 00:20:41,280 --> 00:20:44,760 Speaker 1: On January eighteenth of nineteen forty nine, the man who 321 00:20:44,760 --> 00:20:48,240 Speaker 1: had taken people's life savings died in poverty and alone, 322 00:20:48,359 --> 00:20:51,879 Speaker 1: at a charity hospital in Brazil. The hospital took his 323 00:20:52,000 --> 00:21:02,240 Speaker 1: last seventy five dollars to cover his burial expenses. There's 324 00:21:02,280 --> 00:21:05,000 Speaker 1: more to this story. Stick around after this brief sponsor 325 00:21:05,080 --> 00:21:17,320 Speaker 1: break to hear all about it. There's not much in 326 00:21:17,320 --> 00:21:21,119 Speaker 1: the historical records about Sarah Howe's early life, but some 327 00:21:21,240 --> 00:21:24,520 Speaker 1: evidence suggests that in the early eighteen seventies she worked 328 00:21:24,560 --> 00:21:28,360 Speaker 1: as a fortune teller. The eighteen seventies was a time 329 00:21:28,400 --> 00:21:32,640 Speaker 1: of growth and uncertainty. The reconstruction era blended with technological 330 00:21:32,680 --> 00:21:36,240 Speaker 1: innovation and the Gilded Age. For some life was good, 331 00:21:36,720 --> 00:21:39,880 Speaker 1: but for Sarah and many others, making a living meant 332 00:21:40,000 --> 00:21:45,000 Speaker 1: getting creative. Aside from her fortune telling business, she opened 333 00:21:45,000 --> 00:21:48,600 Speaker 1: a bank run entirely by women for women. It was 334 00:21:48,640 --> 00:21:52,720 Speaker 1: an outrageous thing to do. Even today, we're only decades 335 00:21:52,760 --> 00:21:55,080 Speaker 1: out from women being able to open a charge account 336 00:21:55,080 --> 00:21:58,880 Speaker 1: without their fathers or husband's permission. In the eighteen hundreds 337 00:21:58,880 --> 00:22:02,320 Speaker 1: and beyond, the ability to vote, to earn equal wages, 338 00:22:02,520 --> 00:22:04,959 Speaker 1: or have credit or a bank account was a driving 339 00:22:05,000 --> 00:22:09,600 Speaker 1: force for women to get married. Sarah, knowing this, founded 340 00:22:09,680 --> 00:22:13,800 Speaker 1: the Ladies Deposit Company. The bank's mission was simple, to 341 00:22:13,960 --> 00:22:17,280 Speaker 1: help women gain access to the world of banking. They 342 00:22:17,320 --> 00:22:21,240 Speaker 1: only accepted deposits from unprotected women, those without a husband 343 00:22:21,240 --> 00:22:24,320 Speaker 1: their father, acting as a guardian over their money. It 344 00:22:24,400 --> 00:22:27,320 Speaker 1: was a niche business, but a needed one, as larger 345 00:22:27,359 --> 00:22:31,480 Speaker 1: banks refused to allow them to open accounts. Sarah also 346 00:22:31,600 --> 00:22:35,160 Speaker 1: promised her clients an eight percent interest rate. For every 347 00:22:35,240 --> 00:22:39,160 Speaker 1: hundred dollars deposited, she guaranteed an additional ninety six dollars 348 00:22:39,160 --> 00:22:42,760 Speaker 1: in one year. New clients received their first three months 349 00:22:42,800 --> 00:22:47,120 Speaker 1: interest in advance. While it might be easy for us 350 00:22:47,160 --> 00:22:49,359 Speaker 1: to see the red flags, you have to keep in 351 00:22:49,400 --> 00:22:52,520 Speaker 1: mind that these women didn't have many options. What the 352 00:22:52,600 --> 00:22:57,560 Speaker 1: Ladies Deposit Company offered was a path to independence. Naturally, 353 00:22:57,600 --> 00:23:01,560 Speaker 1: skeptics brought up their concerns and doubts. Sarah calmed them 354 00:23:01,560 --> 00:23:03,879 Speaker 1: by explaining the bank was more of a charity for 355 00:23:03,920 --> 00:23:08,080 Speaker 1: women bank rolled by the Quakers. Word spread quickly, and 356 00:23:08,119 --> 00:23:11,840 Speaker 1: women of all walks of life became members. Letters poured 357 00:23:11,880 --> 00:23:14,080 Speaker 1: in from all over the country. Even though Sarah never 358 00:23:14,119 --> 00:23:17,639 Speaker 1: took out an ad, every client came from word of mouth. 359 00:23:18,840 --> 00:23:21,680 Speaker 1: She opened a bank in New Bedford, Massachusetts, and made 360 00:23:21,720 --> 00:23:24,560 Speaker 1: plans to open more branches in Philadelphia and New York. 361 00:23:25,240 --> 00:23:28,600 Speaker 1: As some invested a little, others invested their life savings. 362 00:23:29,600 --> 00:23:32,639 Speaker 1: All told, eight hundred women invested a total of around 363 00:23:32,680 --> 00:23:36,800 Speaker 1: five hundred thousand dollars. Many men of the time were 364 00:23:36,840 --> 00:23:40,040 Speaker 1: annoyed with Sarah's bank, encroaching on their control over the 365 00:23:40,040 --> 00:23:43,639 Speaker 1: women and finances in their lives. Others were intrigued by 366 00:23:43,680 --> 00:23:48,000 Speaker 1: the idea of women managing their own money. The business thrived, 367 00:23:48,080 --> 00:23:50,720 Speaker 1: and Sarah no longer had to tell fortunes for a living. 368 00:23:51,560 --> 00:23:54,720 Speaker 1: Reporters began to investigate her, but every time one stepped 369 00:23:54,760 --> 00:23:57,879 Speaker 1: inside her bank, she promptly had them ushered out, seeing 370 00:23:57,920 --> 00:24:01,199 Speaker 1: as all the reporters of the time were men. In 371 00:24:01,280 --> 00:24:04,399 Speaker 1: eighteen eighty, the Boston Daily Advertiser ran the first of 372 00:24:04,400 --> 00:24:07,919 Speaker 1: a series of articles exposing Sarah as a fraud, claiming 373 00:24:07,960 --> 00:24:09,840 Speaker 1: that the interest rate was too good to be true. 374 00:24:10,640 --> 00:24:13,800 Speaker 1: The reports caused a run on the bank. If the 375 00:24:13,840 --> 00:24:18,119 Speaker 1: story and Khan sound familiar, they are. Sarah Hal ran 376 00:24:18,160 --> 00:24:21,440 Speaker 1: a Ponzi scheme long before William Miller or Charles Ponzi, 377 00:24:22,160 --> 00:24:24,720 Speaker 1: and just like the others, the Khan came to an end, 378 00:24:24,880 --> 00:24:29,119 Speaker 1: leaving investors penniless. Two and a half weeks after the 379 00:24:29,119 --> 00:24:33,600 Speaker 1: newspaper stories, Sarah was arrested, either because of her crimes 380 00:24:33,720 --> 00:24:35,840 Speaker 1: or because she had refused them entry to the bank. 381 00:24:36,119 --> 00:24:40,119 Speaker 1: Reporters were particularly vicious, and they're writing about her yet nicer, 382 00:24:40,320 --> 00:24:45,280 Speaker 1: though clearly patronizing to the victims. The women were repeatedly 383 00:24:45,320 --> 00:24:49,159 Speaker 1: shamed for trusting another woman with their money while she 384 00:24:49,320 --> 00:24:53,159 Speaker 1: had scammed her clients. Sarah remained unrepentant about creating a 385 00:24:53,160 --> 00:24:57,000 Speaker 1: bank for women. The Boston Herald promptly ran an article 386 00:24:57,040 --> 00:25:00,000 Speaker 1: attributing Sarah's evil doings to her being borne out of 387 00:25:00,040 --> 00:25:03,639 Speaker 1: web block and being divorced. They called her ugly and 388 00:25:03,720 --> 00:25:06,840 Speaker 1: ignorant as a way to explain her cruelty in taking 389 00:25:06,840 --> 00:25:11,199 Speaker 1: other women's money. Sarah stood trial in Boston and was 390 00:25:11,240 --> 00:25:15,200 Speaker 1: found guilty, but not because she had defrauded those who 391 00:25:15,280 --> 00:25:18,440 Speaker 1: trusted her and no, she was found guilty of soliciting 392 00:25:18,480 --> 00:25:21,800 Speaker 1: money under pretenses, claiming that the bank had been funded 393 00:25:21,840 --> 00:25:26,639 Speaker 1: by Quakers. She spent three years in prison. Instead of 394 00:25:26,720 --> 00:25:29,520 Speaker 1: learning her lesson and walking the straight and narrow, Sarah 395 00:25:29,560 --> 00:25:32,880 Speaker 1: returned to her old ways, opening another women's bank in Boston, 396 00:25:33,000 --> 00:25:37,080 Speaker 1: where she offered investors seven percent interest. Kan ran from 397 00:25:37,119 --> 00:25:41,320 Speaker 1: eighty four until eighteen eighty six, earning Sarah fifty dollars. 398 00:25:42,000 --> 00:25:45,760 Speaker 1: She was caught once more, but not sentenced. Instead of 399 00:25:45,800 --> 00:25:48,639 Speaker 1: trying a third time, she returned to her prior career 400 00:25:48,720 --> 00:25:53,520 Speaker 1: of telling fortunes for cents, having spent every penny should swindle. 401 00:26:04,480 --> 00:26:08,680 Speaker 1: American Shadows is hosted by Lauren Vogelbaum. This episode was 402 00:26:08,720 --> 00:26:12,840 Speaker 1: written by Michelle Muto, researched by Ali Steed, and produced 403 00:26:12,840 --> 00:26:17,440 Speaker 1: by Miranda Hawkins and Trevor Young, with executive producers Aaron Mankey, 404 00:26:17,480 --> 00:26:21,399 Speaker 1: Alex Williams, and Matt Frederick. To learn more about the show, 405 00:26:21,560 --> 00:26:24,520 Speaker 1: visit grim and mild dot com. For more podcasts from 406 00:26:24,520 --> 00:26:28,600 Speaker 1: iHeart Radio, visit the iHeart Radio app, Apple Podcasts, or 407 00:26:28,600 --> 00:26:30,280 Speaker 1: wherever you get your podcasts.