Charles ponzi pyramid. What is a ponzi scheme. Description of the Ponzi scheme

A long time ago, at the turn of the 19th and 20th centuries (when Seryozha Mavrodi was not yet in the plans), a man like Charles Ponzi lived and worked (although he worked, this is perhaps loudly said). He was born in Italy, but, like many of his peers in those years, he emigrated to the United States.

It is unlikely that anyone could have thought then that this skinny, modestly dressed boy, descending from the ship to the territory of his new homeland with a couple of dollars in his pocket, in 17 years would spin such a scam here that in one year would make him one of the richest people in America.

background

It all started in Boston, in 1919, when Charles Ponzi borrowed $200 from one of his acquaintances and founded his own firm. The Securities Exchange Company. Officially, his company arbitrated the international reply coupon market.

The International Reply Coupon (IOC) is a paper issued by the Universal Postal Union and exchanged for postal payment marks (postage stamps) in countries that are members of this union.

Ponzi drew attention to the fact that the cost of these coupons varies significantly in different countries. He declared the IOC arbitration, attracting his first investors and subsequent investors, to whom he promised 500 dollars of income for each 1000 dollars invested within only three months (this is 200% of annual income without interest capitalization).

Everything seems to be logical and good, but there was one fact that Ponzi knew from the very beginning, and for obvious reasons was in no hurry to advertise. This fact is the information that the IOC can only be exchanged for postage stamps. That is, as a tool for generating income, in principle, they cannot be used.

His entire campaign was covered with a copper basin, when the person who borrowed him the first $ 200 to create a company (someone Daniels) demanded 50% of the income received by the company. And these incomes were already about $ 250,000 per day (this is the amount that more and more new investors brought every day).

Daniels' lawsuit allowed for the freezing of all funds in the company's accounts. In this regard, Charles Ponzi suspended the acceptance of deposits from the population (explaining this by a tax audit). This event was a turning point that led to the lightning collapse of the entire company. Depositors, concerned about the interest of the tax authorities in their borrower, began to demand their money en masse.

Naturally, there was not enough money for everyone, because their only source was new investors, and Charles Ponzi was arrested and sentenced to five years for fraud. All that was acquired by overwork in one year of this incredible rise, the deceived investors divided up until 1924.

After being released from prison after five years, Charles Ponzi began doing what he did best - financial fraud. This continued until 1934, when the patience of the US government ran out and Ponzi was deported to Italy.

Description of the Ponzi scheme

Since then, all financial fraud of this kind has been called a Ponzi scheme. The essence of such schemes is to attract customers under a solid, good-looking sign, the name of which, as a rule, does not say anything specific ( "International Offshore Investments", "Highly profitable investment projects" etc.). Clients are lured by promises of income that significantly exceeds bank interest.

The essence of the scheme is to attract as many participants as possible, paying profits to old participants solely from the contributions of new ones. Thus, the success of launching such a scheme depends solely on the growth rate of new depositors. If at the initial stage it is possible to set such a rhythm that the number of new investors covers the requirements for their deposits of old investors, then such a scheme is quite capable of unwinding to a serious scale. Naturally, in the end, for obvious reasons, this scheme collapses, but until that moment, its founder can get hold of quite a decent fortune and hide in an unknown direction (in all likelihood, somewhere closer to the palm trees and the sea).

The inevitable destruction of a Ponzi scheme occurs when:

1. The founding father of the scheme leaves his offspring, taking with him all the money raised
2. The influx of new investors is decreasing, and the requirements for payments on previously invested; funds grow. There is not enough money for payments and panic begins when everyone wants to return their money at once;
3. Vigilant law enforcement authorities expose the cunning scammer while the scheme is still running (but this option is extremely rare and can not be considered).

A Ponzi scheme is an investment scam that initially promises investors maximum returns with virtually no risk. At the same time, profit is generated only for early investors through funding by new ones who join it. Thus, this scheme is viable exactly as long as the flow of investors does not stop, after which it will immediately collapse.

Principle of operation

The Ponzi scheme got its name from the Italian swindler Charles Ponzi, who developed it. He worked as a clerk in America, first implementing the model in 1919.

We will tell you in detail about the principle of operation and the Ponzi scheme in this article. It resembles a pyramid scheme in that it also relies on funds from new investors to provide income to old investors. True, there is a key difference between these schemes. It lies in the fact that the manager first collects all the funds himself. In a financial pyramid, any of the participants in the process directly receives income. In the case of a financial pyramid, the manager does not have access to all the money in the system.

It is worth noting that, despite the difference in the principle of income distribution, both the Ponzi scheme and the financial pyramid are doomed to failure, since sooner or later the money for payments will inevitably run out.

Details

Now let's take a closer look at this system. In essence, a Ponzi scheme is an investment fraud scheme in which an organization or some individual verbally guarantees income solely through the use of new capital. At the same time, it will be attracted from new investors, and not at the expense of profits received by new investors. At the same time, the Ponzi pyramid scheme attracts a large number of people because of the higher profitability. Especially when compared to other types of investments.

Interestingly, sometimes a polka ponzi scheme can start as a completely legitimate business, remaining exactly until the moment when it is no longer possible to achieve the promised profitability by legal methods.

It also happens when the business itself turns into a pyramid if it starts to function on fraudulent terms. Whatever the situation initially, high returns require an ever-increasing amount of funding from new and new investors to keep the scheme alive and functioning.

Characteristics

To better understand its structure, we note that at the initial stage, all investors are promised high returns, moreover, by investing in traditional financial instruments. For example, futures.

Similar terms are used by scammers when they promise offshore investments that can attract a large number of investors. Thus, the promoter sells his shares through investors, taking advantage of their lack of knowledge and competence.

Almost always, such schemes adhere to an investment policy at the very beginning, investing in hedge funds or other available financial instruments. Can turn into a Ponzi scheme and a hedge fund if the organization begins to rapidly lose its assets. At the same time, the organizers hide their losses by falsifying auditors' reports in order to attract further investments.

Other examples

In the 20th century, many financial strategies and tools turned into Ponzi schemes. For example, Alen Stanford used certificates of deposit of banking organizations, with the help of which he was able to leave thousands of gullible citizens with nothing. At the same time, certificates of deposit themselves are insured and the risks of their use are minimal. But Stanford was giving out coupons, which was pure fraud.

In each scheme, the promoter will initially fulfill its obligations in order to attract as many new investors as possible, and the current ones have invested additional funds. With the advent of new participants, a cascade effect is triggered. As a result, payments to old investors are made from the money coming from new participants. In this case, there is simply no profit.

Such high excess returns encourage old investors to keep their money in the system. As a result, the organizer of the scheme does not have a need to return the money. All he has to do is send regular notifications about the client's ephemeral profits.

The organizers of such a scheme are trying by all means to minimize the withdrawal of money, coming up with new options for investing. If someone nevertheless decides to take the money, they are paid to him in order to maintain the myth of solvency for the rest of the participants.

Schema expansion

Even if such a scheme is not disclosed by the authorities, it will burst very soon. There are several good reasons for this.

Firstly, the promoter himself may disappear with all the accumulated money.

Secondly, such a scheme requires a continuous flow of investment to ensure the volume of all payments. If the flow of incoming funds slows down, the scheme will collapse, as the organizer simply will not be able to provide further payments. Such delays in liquidity usually lead to panic among investors, then most investors try to return their investments as soon as possible. These problems are reminiscent of liquidity crises that occur in large banks.

Third, the forces of external markets may have an impact. A sharp economic downturn can induce an investor to withdraw money. A striking example is the Madoff pyramid scheme scandal in 2008.

Biography of the scammer

The scheme was named after Charles Ponzi. Having emigrated to the USA, he created one of the most original financial pyramids. It is known that he arrived in America in 1903, having lost all his savings along the way, presumably he lost them in gambling. All his attempts to make money were unsuccessful until 1919, when he opened his own company with $ 200, which he borrowed from furniture maker Daniels.

The company registered by him was called the "Securities Exchange Company". She began to engage in arbitrage transactions, issuing IOUs. According to them, she was obliged to pay $1,500 for every $1,000 she received after three months.

Already in 1920, Ponzi handed over the management of the company to young Lucy, and he himself moved to an expensive mansion. In the summer of the same year, the pyramid he created collapsed after the claim of one of the investors, who demanded half of the profits of the entire company. According to the laws of that time, Ponzi's funds in banks were frozen; already on July 26, he announced that he would stop accepting new deposits due to tax police checks. This was a catastrophic mistake, the depositors immediately wanted to take their money back.

On August 12, he was detained, revealing a debt of $ 7 million, despite the fact that there were only $ 4 million in the accounts. In October, his company was declared bankrupt, and Ponzi himself was sentenced to five years in prison.

On the loose

Once free, he did not leave financial fraud, so a few years later he was deported to Italy.

He taught English, and then, under the patronage of Mussolini, moved to Rio de Janeiro, where he became the official representative of Italian Airlines. There he died in 1949 at the age of 66 from a cerebral hemorrhage.

Incarnation on the screen

In 2014, a biographical drama was released on the screen, which was called "Ponzi Scheme". The film was directed by French director Dante Desart.

The tape describes in sufficient detail and clearly the operation of this scheme. Interestingly, this idea has already appeared in the literature before, but Ponzi was the first to implement it in reality. Similar fraudulent schemes were described by Charles Dickens in the novels "Little Dorrit" and "Martin Chuzzlewit".

Modern adaptations

Many people believe that the current cryptocurrency craze is nothing more than another attempt to implement a Ponzi scheme at the ICO. According to some experts, this simply kills innovation, being nothing more than a pyramid scheme.

Thus, the organizers of fundraising campaigns are accused of maximizing revenues by taking advantage of the confusion that arises around blockchain technology. As a result, they manage to deceive numerous unsophisticated participants in this scheme, who receive false promises, rely on dubious advertising, rely on significant investment opportunities and super-high returns.

Instead, they are doomed to failure, as such schemes remain profitable only until the new money runs out.

At the same time, there are also those who believe that cryptocurrencies have nothing to do with fraudulent schemes. Many are convinced that bitcoin will never be able to fulfill its purpose. The Ponzi scheme will be implemented once again.

Ponzi scheme - English Ponzi scheme, is an investment scheme that provides income to earlier investors with funds received from later investors. It may look legitimate at first, but a Ponzi scheme usually collapses as soon as the influx of new investors becomes insufficient to pay old ones. In some cases, the Ponzi Scheme is initially used without malicious intent, but with the aim of making a profit while fulfilling all obligations to investors. However, in most cases, the scheme is created for fraudulent purposes, in order to bring profit to its organizers, who make little or no effort to make a profit for investors.

While the principle of the Ponzi scheme has been around for centuries, the modern name for this type of fraudulent investment activity is associated with a 20th century Italian immigrant named Charles Ponzi. After successfully immigrating to the US in 1903, Ponzi created an investment scheme based on arbitrage deals with reciprocal coupons. To finance this activity, he raised money from investors by offering them a high percentage. In the future, funds received from new investors were partially directed to pay income to earlier investors, and Ponzi spent part of them on its own needs.

There is a fairly common misconception that a Ponzi scheme is a variation of the classic pyramid scheme, but there are some fairly subtle differences between the two schemes. While both of these strategies are examples of illegal investment schemes that give the appearance of a serious organization promising high returns in a short period of time, there is a central figure in the Ponzi scheme who receives most of the money from fraud. In contrast, a pyramid scheme involves the creation of a network of investors who in turn actively recruit new investors and usually receive a percentage of any investment made as a result of their efforts. That is, in a classic financial pyramid, all cash flows are not tied to one person.

Moreover, the Ponzi scheme does not solely rely on new investors to keep running. As a companion strategy, the Ponzi scheme also involves returning to the scheme earlier investors who have already earned some income from their initial investment by persuading them to reinvest all of these funds. This strategy is not typical of most Ponzi schemes, which mainly rely on the continuous attraction of new or new investors in order to be able to continue to function.

Although most countries have laws that prohibit this practice and carry fines and/or jail time, it is sometimes very difficult to identify a Ponzi scheme at its development stage. Over time, as the activity grows and expands, the functioning of the scheme inevitably becomes apparent and usually ends in lawsuits and bankruptcy. However, at this stage, most investors will receive significant losses, the probability of recovering which is extremely low.

The Ponzi scheme appeared in the early 1920s, although one cannot be completely sure that such schemes did not exist before. It's just that the scope of this pyramid turned out to be so huge that the scheme was able to go down in history and become a household name. It is noteworthy that about 100 years have passed since that time, and financial pyramids not only continue to exist, but also appear almost every year on an even larger scale. For example, the famous MMM pyramid, which is resurrected every year in a new guise. This suggests that there will always be people who want easy money, only the existence of such pyramid schemes undermines the confidence of real investors in new financial projects.

Read on to learn how to distinguish a financial pyramid from real investment projects and not lose your money.

History of the Ponzi Pyramid

It all started with a postal agreement that came into effect in 1906 between several dozen countries. Its essence boiled down to the introduction of uniform rules for postal exchange: unique postal coupons with the same value in each country were put into circulation. The coupon was enclosed in a letter and the recipient, instead of spending money on postage stamps for a reply letter, received them in exchange for a coupon.

The scheme worked perfectly for almost 10 years until the moment when the economic condition of the European countries was not sharply shaken. As a result of the First World War, a financial crisis broke out in Europe, which led to a sharp imbalance in the value of postal coupons between European countries and the United States. If in Europe one coupon could be exchanged for one mark worth 1 cent, then in the USA the same coupon was exchanged for 6 marks. Here's the problem: what's the point of these postage stamps if they can't be exchanged for real money?

The problem was solved by Charles Ponzi, who in 1919 proposed to make money on the exchange rate difference by issuing bills, which should have been profitable. We will not go into the economic essence of the scheme, the important thing is that Ponzi was able to convince potential investors (not without the help of the media) that investments could bring 100% within 3 months. Later, in August 1920, a federal agency audit of the Ponzi company would reveal that the investors' money was not invested in any coupons, and the investors' profits were paid out of other investors' money.

It is logical that such a scam was obviously doomed to failure, since sooner or later the flow of new investors would not be enough to fulfill obligations to old investors. But Charles at that time was not interested in this issue, and the pyramid was liquidated before this moment came. The result is predictable: investors failed to return most of the money, the organizer himself received a prison term and a fine.

A Ponzi scheme is often referred to as a pyramid scheme. This is partly true, but there are significant points that distinguish Ponzi from the classic pyramid:

• The Ponzi pyramid has an ideological central organizer who manages the entire system and receives most of the profits. In contrast, in an ordinary financial pyramid there is a group of investors, which, according to the principle of MLM networks, attracts new investors who would also contribute to the influx of new customers;
• The Ponzi scheme involves not only attracting new investors, but also retaining old ones, who are given all the conditions for them to reinvest capital. Classic pyramid schemes rely on continuously attracting new investors until the flow dries up.
• The legend formed by the mastermind of a Ponzi scheme is far more convincing than conventional pyramid schemes. The lifespan of ordinary pyramids is several times shorter than that of a Ponzi scheme.

Ponzi followers

1. The Bernard Madoff scam. The largest fraud in history, the exact damage of which could not be calculated. According to various estimates, Madoff was able to appropriate from 50 to 64.8 billion dollars. United States, thereby deceiving about 3 million people around the world.

The enterprising swindler began his career in 1980, trading on the New York Stock Exchange. He was one of the first to use electronic technologies in trading, gradually increasing volumes. Over time, under his leadership, investment funds began to appear, working with completely different assets: stocks, options, etc. By the mid-90s, Madoff's reputation was so impeccable that investors from all over the world were drawn to his funds. One of them was Frenchman Thierry de la Vilhouchet, co-founder of Access International Advisers, who helped raise hundreds of millions of dollars of investors from Europe to Madoff's funds. After uncovering the scam, he committed suicide.

The principle of the pyramid was classic: the Madoff corporation attracted money from investors of other investment funds, corporations, investment pools, which it supposedly invested in stock trading. Among the clients you can find such names and companies as Steven Spielberg, Joseph Safra (the owner of banks and real estate around the world). Investors were attracted by the guaranteed yield of 10-12% and the almost complete absence of management fees. But in fact, the money was paid only at the expense of other investors.

Where the auditors and regulators were looking is a rhetorical question, but the scheme was able to hold out until 2008. According to legend, Madoff was betrayed by his own sons, but it is not possible to verify the accuracy of the information. For so long, the pyramid managed to exist due to the fact that Bernard was not greedy, declaring a moderate return on investment. It is believed that he could have patrons in power, but we are also unlikely to ever know about this. The pyramid no longer exists, and the organizer himself received 150 years in prison.

2. Scam of Sergei Mavrodi (MMM). We are sure that everyone has heard about this pyramid. This largest pyramid scheme in Russia was created in 1992 and left 10-15 million people deceived. But the point is not so much in her, but in the fact that Mavrodi did not stop there. Here are just a few reincarnations of this pyramid:

• Stock Generation - a virtual stock exchange, considered the largest pyramid scheme in the history of the Internet;
• "MMM-2011: We can do a lot" and MMM-2012 - projects similar to MMM;
• Mavro is a cryptocurrency that appeared in 2016 (although in fact it is not). At the end of 2017, the project was expecting a scam, followed by a restart;
• "MMM Pyramid" is a project of 2018, which the organizers call the Global Mutual Fund. According to legend, the project has existed since 2011, which is not entirely true.

It seems that the experience of the first MMM pyramid did not teach investors anything. It is difficult to say what drives these people - excitement or greed. But the fact remains that such pyramids will always have clients.

Other famous pyramids:

• Lou Perlman's diagram. Known in music circles (manager of the Backstreet Boys and N "Sync), he is also known for the built pyramid that existed for almost 20 years. Investor losses amounted to more than $ 300 million. Created in 1981, the pyramid of non-existent companies was so convincing that it was able to enter misleading even representatives of financial institutions.
• The European Royal Club that swindled German and Swiss investors for 2 years in 1992. The loss amounted to about 1 billion dollars. USA.
• Ant farms of Wang Feng. In 1999, a Chinese businessman opened an unusual company: he offered investors to buy ants for 90 days, take care of them and return them at a higher price. Profitability was about 32% per annum, turnover - about 2 billion dollars. USA. After 14 months, the pyramid opened up.

Modern organizers of the pyramids have learned to perfectly disguise themselves as quite interesting investment projects. Therefore, a few words should be said about how to recognize such schemes.

Signs of a potential financial pyramid:

• A legend that does not provide a clear understanding of how the profit will be generated. Most of the simple Ponzi-type schemes are limited to general phrases that can be convincing only for those who do not have a deep understanding of the segment and financial service.
• Guaranteed return on investment. No investment fund can guarantee success. If the organizer provides such a guarantee, there is a clear sign of a pyramid scheme.
• Aggressive marketing campaign. The task of the organizer of the pyramid is to attract as many investors as possible, therefore, the media, forums, social networks are used - any channels where investors are convinced of the profitability of the project, but do not focus on the idea itself. Having an affiliate program aimed at attracting as many customers as possible is another sign of a pyramid scheme;
• Investment without concluding any contract.
• False licenses, lack of financial statements, statutory documents, lack of information about the founders.

No one says that it is impossible to make money on investments in pyramids, but an investor must soberly assess his risks and understand the possible consequences. And in conclusion, we will answer the question of those who still doubt what Penenza is.

Why is Penenza about real investments and not about deceit?

Penenza is a crowdfunding platform that connects a borrower and an investor. This is a financial intermediary that earns a commission due to the fact that it allows you to quickly find those who want to invest money, and those who need this money. The principle of operation of the platform is clear and transparent: targeted loans are issued to legal entities, details and documents of specific borrowers can be seen in the personal account. The authorized capital of the company is 1.5 million rubles, and with registration documents it is possible. In this section you will also find a public offer and financial statements.

And a few more points that a potential investor needs to know:

• Penenza is a member of a working group at the Central Bank of the Russian Federation, which discusses the possibility and necessity of regulating the sphere of peer-to-peer lending.
• The platform has been in existence for 2 years. And during this period, auditors and regulatory authorities did not have any complaints about her work.
• Penenza does not guarantee profitability. The company only offers to earn about 20% per annum. This profit is the result of market analysis, which showed what conditions may be of interest to borrowers and investors with minimal risks. Having a unique scoring system, Penenza successfully competes with banks and microfinance organizations, minimizing the probability of a borrower's default;
• The investor receives all the information about the scoring results of a particular borrower. All borrowers are real companies, the existence of which can be checked in the registry, as well as contact their representatives personally.

Penenza is interested in professional investors who want to multiply their money wisely. If you have any questions - ask them to the platform representative in the chat on the main site. And good luck with your investment!

MMM-2011? Better read how these pyramids began to be built at the beginning of the 20th century.

Charles Ponzi was born on March 3, 1882 in the city of Luga, located near Ravenna (in northern Italy). This Italian became famous for creating the famous "Ponzi scheme", a large financial pyramid, which were simply innumerable in Russia in the 90s of the last century.

True, the difference between the "Ponzi scheme" and the Russian pyramids is visible to the naked eye. The thing is that the Italian created a rather interesting story around his scam, and logically it looked very harmonious. For the time being, no one doubted that a Ponzi scheme could help you make big money in a short time.

"Ponzi Scheme"

In 1919 Charles Ponzi had a business idea. He decided that he could take up the production of an international magazine. Without thinking twice, Ponzi sends a letter to a Spanish company to learn more about cooperation in the magazine business.

In response, Charles received a letter containing international exchange coupons. At the post office, anyone could exchange these coupons for stamps and send the letter back.

But the most interesting thing was that in Spain one stamp could be obtained for 1 coupon, and as many as 6 in the USA. A similar situation was with other European countries. Ponzi quickly realized that he could play on this.

So, the essence of the "Ponzi scheme" is that he offered people to earn money by reselling stamps.

Luckily, the exchange rates contributed to this.

Alas, there was an obvious problem - there were not enough exchange coupons to satisfy the future demand for the services of the Ponzi company. But Charles himself did not think about it at all. After all, he had no intention of reselling. His goal was to create a simple financial pyramid, when the money of subsequent investors is paid to the previous ones.

So, in the same year, Charles Ponzi borrows $ 200 from a furniture maker Daniels. With this money, he rents an office, buys a table and two chairs (the legend says that he dined with the rest of the money). Then he registers a company, where he is the only employee at that time.

Ponzi's offer came as a surprise to many Boston residents - he offered to invest in his papers and receive 150% of the invested amount in just 45 days. Those. if a person invested 100 dollars, then after 45 days he could expect to receive 150 dollars, and after 90 - as much as 200.

At the same time, the situation with Ponzi was strikingly different from what was happening in Russia in the 90s. The Italian spoke in detail about how he was going to make money by initiating people into his idea with arbitration.

And people fell for it. Crowds went to Ponzi. Officials, policemen, ordinary citizens. Charles also fueled interest in his enterprise with custom articles in the press. And people fled for the simple reason that everyone (regardless of nationality) wants to be rich in no time. Ponzi became more and more famous. They believed him, the early investors actually got their money, and even such newspapers as The New York Times interviewed Ponzi. In general, things went well.

By the spring of 1920, the company employed 30 people, and 18-year-old Lucy Martelli was in charge of operational management. Ponzi himself moved away from direct participation in the company's activities. In addition, Charles Ponzi's depository account with the Hannover Trust Company was opened at this time. It was through her that almost all of Ponzi's money passed. Many believe that everyone at HTC knew about this scheme, and even helped turn it around.

In May 1920, Charles fulfills his dream - he acquires a huge house for 35 thousand dollars. The mansion (and this was it) had 22 rooms, and it was located in the banking district of the Lexington quarter. But it didn't take long to rejoice. After all, after a couple of months, the “Ponzi scheme” was revealed.

This happened in the middle of the summer of 1920. Then the "old friend" Ponzi Daniels, who watched the ascent of the Italian, sued him. He believed that Ponzi owed him half of all his profits, according to their agreement (yes, we are talking about a loan of that $ 400).

Under Massachusetts law, all Ponzi accounts were frozen for the duration of the trial (there is no such terrible law in this state now). As you understand, for a financial pyramid, freezing accounts is a severe blow!

But that was only the beginning. Soon the government started an audit of the Ponzi company. Charles, under pressure from the state's attorney, stopped accepting money. Savers poured in to Ponzi doors to collect their money. Someone managed to do it (according to some estimates, about 1000 people), but someone, alas, did not.

Be that as it may, but the audit revealed the fraudulent scheme of the Italian, who did not do what he planned (and could not, since there were not the proper number of coupons in circulation to cover the entire amount). The Ponzi company was an ordinary pyramid scheme where money was simply distributed. She had no profit. Money from new participants simply went to old investors.

The result of this whole adventure: of the 10 million dollars received by Charles Ponzi, he managed to return only 8 million to the depositors. The rest, apparently, was spent on the salaries of his employees and himself. For his fraud, the Italian received only 5 years in prison.

After the release, Charles did not start a new life. He continued to create new machinations. True, in terms of their scale, they did not even reach one hundredth of the “Ponzi scheme”. All these were petty deeds, for which, in the end, in 1934 he was deported to his homeland.

Charles did not stay long in Italy. The world war was approaching, and he went to seek his fortune in Brazil. There he died in 1949. The capital of the great financial fraudster amounted to only 75 dollars, which was enough for the funeral alone.