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The Infamous Ponzi Scheme


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It is truly fascinating to me that the more things change the more they stay the same.

Check out the number of google news stories that mention Ponzi. Dates, names, locations and amounts change. But it's the same con under the covers.


The Ponzi Scheme Wiki is an even more interesting read.


The world of the confidence man is so involved that many often confuse other cons for a Ponzi Scheme.


During Ponzi's amazing 1920 run, he collected about $15 million from investors--an estimated $150 million in 2006 dollars. Ponzi started his Securities Exchange Company (not making this up) the day after Christmas 1919. Along the way, Ponzi lived well for a time. He bought a mansion with air conditioning and a heated swimming pool back in 1920. But by August 1920, it all came crashing down with his arrest. In November 1920, he pled guilty.

Ponzi's run probably was the most amazing in that he did so much in such a short time. But he was neither the first nor the last.


In fact, one can go all the way back to the Tulip mania of the 1630s--although that was technically a bubble.




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So the question becomes:

Are you willing to spend about 3 years of actual time served in prison to live as a millionaire prior to and for the rest of your life afterwards??? Restitution or not, there's no way they got all of it if these guys had half a brain.

Oh yeah, it's probably unethical too, so there's that consideration as well.

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I didn't notice any links to a "how-to" book.

Start with "Extraordinary Popular Delusions and the Madness of Crowds"


Then hit up the local library for anything about Ponzi. There have been numerous books about him.

It has been said again and again of Ponzi that there was a cluelessness in Ponzi. Once the scheme was in motion, and bringing in huge sums, he should have taken the money and gone somewhere the American authorities couldn't reach him--like say back to Italy where he could have lived like a king. Ponzi seemed to have no plan to "get out".

But more generally, there is the problem of not knowing when to get out. If one could pull off such a swindle, even on a smaller scale, one would likely be lost in hubris thinking "I'm smarter than everyone else. I can ride this thing for a while longer." But then one day soon, likely just one day too late, FBI or Treasury agents will come crashing through your front door.

You probably won't be able to pull it off all by yourself, but if you do you will have eliminated a huge problem that gets so many criminal gangs caught. One of your compatriots rats or shoots their fool mouth off.

I delight in reading about top notch cons and high end thieves--mostly because they almost always get caught. There have been a few gangs of thieves who survived for a while.

Ronnie Biggs lived on the outside for 3 decades having taken part in the Great Train Robbery of 1963. However, mounting medical bills led him to turn himself into the British authorities and return to the UK. Today at age 78, and in poor health, he sits in Norwich Prison.


It ain't like the movies. Well, it ain't like some movies.

It ain't like:

The First Great Train Robbery


The Saint

The Score

It's more like:

Heat (the ending, not the Spec Ops tactics and precision of bank robbers)

Fargo (good for showing how "a simple money deal" turns violent)

A Simple Plan (my favorite for illustrating how you will f*** up and in ways you never planned)

The authorities can make all kinds of mistakes. You cannot afford even one.

I suppose you could try to mimic the life of Frank Abagnale, Jr. of "Catch Me If You Can Fame". Today he runs Abagnale & Associates, a legit security business, and has authored several books.

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