By Dom Cioffi
Sometime around 1915, a dapper 33-year-old Italian immigrant named Charles arrived in Boston, Mass., looking to embark on the great American dream.
Prior to arriving in the big city, Charles had spent time in prison for forging checks and smuggling immigrants from Canada. However, having paid his debt to society, Charles was now intent on creating a legitimate career.
He worked odd jobs and married, but soon became frustrated with his lack of financial success. And then one day he received a letter from Spain that included an IRC (international reply coupon).
He was intrigued by the nature of the global document and after much analysis, discovered a weakness in the system that, in theory, could be exploited for monetary gain.
He positioned himself as a financial guru and began to sell folks on the idea that he had devised a can’t-miss scheme to make money. He basically convinced people that he could stay one step ahead of wildly fluctuating world markets, which were being affected by the turmoil following the conclusion of World War I.
But the real sales pitch – the thing that got most people to invest – was Charles’ promise of a 50 percent return on their investment in only 45 days.
People went crazy trying to buy into Charles’ can’t-lose scenario once they heard about the returns early investors were earning.
Local newspapers soon caught the story, highlighting Charles’ amazing profits and his high-roller lifestyle. One paper even ran a headline highlighting Charles’ guarantee of a 50 percent return.
The publicity garnered Charles even more investors. Soon he was swimming in expensive automobiles and luxurious estates. He even had his mother shipped across the ocean in a first-class stateroom aboard an elite ocean liner.
But while Charles was basking in his burgeoning fortune, he was also becoming the target of a pointed investigation.
Things started to go awry when Charles’ own public relations man began snooping through files and discovered incriminating documents. He subsequently sold those documents for $5,000 to The Boston Post, which was certain that a highly illegal venture was operating.
Soon the news was all over town: the can’t-miss investment scheme was a total bust. In fact, Charles was over $2 million in debt. People learned that there were no actual investments and that the money collected from new investors was simply used to dole out false dividends to older investors.
Before long, the entire country was privy to the scam, which registered losses of over $8 million (an epic sum in the early 1920s).
It only took one month from the time The Post’s article first appeared for Charles Ponzi to end up in complete ruins. And from that day forward his name would be forever paired with the financial sham that he helped perpetuate: the Ponzi Scheme.
Interestingly, The Boston Post would go on to win the Pulitzer Prize for Meritorious Public Service for uncovering the scam (this was in the days before the existence of the Securities and Exchange Commission, when investigative reporting by newspapers was responsible for keeping the public and business sector honest).
Charles Ponzi eventually spent several years in jail. Once out, he simply set up shop in another state and started another scam. Not surprisingly, he was indicted for those crimes and went back to prison. He was later deported upon his release, eventually ending up in Brazil where he died disgraced and penniless in a charity hospital, having lived the last several years of his life in poverty.
Charles Ponzi was not the first man to swindle the public with visions of financial grandeur, nor was he the last. In fact, starting in the 1980s, countless individuals have created their own specialized Ponzi schemes, bilking billions of dollars out of pie-eyed investors (the most famous being Bernie Madoff and his $65 billion super-scam).
This week’s feature, “Get Hard,” focuses on James King (Will Ferrell), another swindler businessman who’s been nabbed by the authorities and sentenced to do hard time in prison for his financial transgressions. Fearing for his survival behind bars, King enlists the talents of Darnell (Kevin Hart), a lowly car wash supervisor who King believes can help him navigate the harsh realities of prison life.
It’s sad that two of Hollywood’s funniest comedians would have to resort to such a low-rent production. “Get Hard” had potential, but unfortunately it relied on dated gags and an overabundance of toilet humor.
This one will play very well for teenagers and on college campuses, but those with a more discerning comedic palate will feel betrayed.
Check this one out if you haven’t seen the trailer– because if you’ve seen the trailer, you’ve seen the best parts of the movie.
A crooked “C-” for “Get Hard.”
Got a question or comment for Dom? You can email him at [email protected]