Charles Ponzi

Charles Ponzi was an Italian-born American swindler whose 1920 investment fraud promised high returns through international postal reply coupon arbitrage. His name became attached to schemes that pay earlier investors with money from later ones.

Ponzi scheme: A fraud that pays earlier investors with funds collected from later investors rather than from genuine profits. Ponzi’s 1920 fraud became the namesake example of this pattern.
Lugo: A city in Emilia-Romagna, Italy, and the birthplace of Charles Ponzi. Ponzi was born there in 1882 before emigrating to North America.
Rose Gnecco Ponzi: Charles Ponzi’s wife, whom he married in 1918. Rose remained associated with him during the rise and collapse of his 1920 operation.
Boston Post: A Boston daily newspaper that published investigations of Charles Ponzi in 1920. Its reporting helped expose the mismatch between Ponzi’s promises and the available coupon supply.
International reply coupon: A voucher exchangeable for postage stamps in another country, created to facilitate international postal replies. Ponzi claimed exchange-rate differences made these coupons the source of his promised profits.
Immigration to the United States: The movement of people from other countries to settle in the United States. Ponzi arrived in the United States as an Italian immigrant in 1903.
William McMasters: A publicist who worked for Charles Ponzi and later exposed his finances to the press. His public allegations helped bring scrutiny to Ponzi’s business.
Bankruptcy of Charles Ponzi: The financial collapse of Charles Ponzi’s investment business in 1920, which left investors facing heavy losses. The business could not meet demands once new money stopped arriving.
Charles Ponzi's 1920 scheme: The Boston investment fraud in which Charles Ponzi promised large returns through purported postal-coupon arbitrage. This is the specific operation behind his lasting notoriety.
Boston: The capital and largest city of Massachusetts, situated on the northeastern coast of the United States. Ponzi built his 1920 operation among investors in Boston.

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Victor LustigCompared with: Ponzi’s mass investment fraud contrasts with Lustig’s smaller, personalized confidence tricks.