Reporters marveled at his unflappable calm, but Ponzi knew what they didn’t: One always had to look the part. Besides, as he’d learned years ago from Charles Morse in that Atlanta prison, a rich man could escape serious consequences.
Still, he felt the pressure. The ulcer was still there. Although many people were sticking by him, the run on his company from worried investors had now reached $400,000. Despite his public protestations, Charles Ponzi knew that he would soon be out of money.
Lexington, Massachusetts
August 8, 1920
Ponzi was still wearing his bathrobe and had not left the mansion all day. Rose was pacing back and forth in tears. She had never wanted this life in the first place. Her worst fears did not involve losing the house or the money, but losing her husband. She didn’t want him to go to jail. She still believed in him.
She shared that sentiment with the reporter who came to visit them that Sunday. “I would much rather that he was a bricklayer working eight hours each day,” she told him.
As his wife fretted, Ponzi told the reporter his life story—from his idyllic youth in Italy, to his journey to America, and then on to Canada, where he was involved in “confidential investigations.” From there, Ponzi said, he was “sent south” to Atlanta and Alabama before making his way back to Boston.
As the reporter took notes, he couldn’t help but notice that Ponzi had glossed over several years of his life.
Later that day, Ponzi received a telephone call from the reporter.
“Mr. Ponzi, a telegram has just come into our office from a reporter in Montreal. It seems that a man named Charles Ponzi, aka Bianchi, was once arrested for forgery there.”
The reporter paused, then asked, “Are you that man?”
Ponzi scoffed. “Ridiculous!” A strong denial, he knew from experience, could buy him some much-needed time. The public audit of his books would be completed any day now. Maybe by some miracle the auditor would believe his claims of solvency and he could figure out how to make all of this work.
The Post reporter persisted. “But weren’t you in Canada around that time?”
“What difference does it make?” Ponzi asked.
“This man worked at Banco Zarossi,” the reporter said. “Did you work at that bank?”
“I might have,” Ponzi said, hanging up the phone.
Reporters surrounded him now, everywhere he went. They hung on his every word. Many regular citizens did, too—convinced that he was a David standing up to the Goliath of the moneyed elites and corrupt authorities. People were still coming to his office with money to invest, including a group of immigrants who had pooled together $100,000.
“After I am proved on the level,” Ponzi vowed, “I will demand that the authorities be investigated.”
Boston, Massachusetts
August 12, 1920
Officials at the local jail thought Charles Ponzi was a marvel. He was still confident and smiling, even though he was under arrest and most of the city of Boston, indeed most of the country, now knew he was a con man.
On the day of his arrest, Ponzi told reporters, “I am not going to flee, but will stay here and face the music. I am going to prove that I’m on the level now.” Other wealthy men had made similar claims and gotten away with their crimes. Perhaps, Ponzi thought, he could do the same.
Dressed in a dark, chalk-striped suit and polished shoes, Ponzi had his driver take him to the authorities, where he turned himself in.
“I have done nothing wrong,” he assured them.
“But you agreed to accept the auditors’ figures?” they asked him.
“Yes,” he replied. “I have agreed.”
New mug shots were taken at the Boston jail, and Ponzi was formally charged with scheming to use the mail to defraud investors, but he was a portrait of resolve. “The man’s nerve is iron,” a jailer later told reporters.
Ponzi would not admit defeat. Never. “No man is ever licked,” he said, “unless he wants to be. And I don’t intend to stay licked. Not as long as there is a flickering spark of life left in me.”
The last few days had been especially unkind to him. First came the allegations in the Boston Post that Ponzi had been imprisoned in Canada for forging checks. The story included his mug shot, dispelling any lingering doubts about his malfeasance, even among the most loyal Ponzi acolytes. The revelations about his prison record horrified Ponzi, but not for the obvious reasons. He was more worried about Rose’s reaction to finding out he’d lied to her for so many years.
That evening, Rose came to visit him in jail. His heart pounding, his shoulders slumped, Ponzi came clean.
“I’m sorry for lying to you,” he said, sobbing. “For hiding my past.”
“I’ve known all these years, Charles,” she replied.
Charles lifted his head. “Known what exactly?”
“Your mother sent me a note years ago, right after we became engaged. She wanted me to know about all of your past crimes. She asked that I keep it to myself.”
Ponzi, broken and defeated, could not muster his trademark smile.
“I married you anyway,” Rose whispered. “Because I loved you.”
His wife’s revelation did not ease the final blow that Ponzi suffered when the government’s auditor, Edwin Pride, concluded that Ponzi was $3 million in debt. By day’s end that number would be revised to upward of $7 million. Overall, Ponzi’s investors had lost, by some estimates, $20 million ($246 million in 2014 dollars).
Half a dozen banks that held now-worthless notes from Ponzi were on the verge of collapse. Thousands of ordinary citizens faced financial hardship or ruin, although a few hard-core believers still held on to their notes, hoping that the wizard could pull some last miracle out of his hat.
Ponzi was sentenced to five years in federal prison.
A complete audit of the company later turned up $61 of postal coupons, along with a letter from the U.S. Post Office that was dated April 19, 1920:
Dear Mr. Ponzi,
Post office inspectors have reported their interview with you concerning a proposed speculation in International Reply Coupons issued by foreign governments. They are not intended as a medium of speculation, and the department cannot sanction their use for that purpose.
The letter had made clear months ago something that would’ve made the whole scheme instantly collapse if it had ever been made public: International reply coupons could not be redeemed for cash.
Twenty-eight Years Later
Rio de Janeiro, Brazil
November 17, 1948
“Mr. Ponzi, how would you like people to remember you?” the reporter asked.
Ponzi raised his once-bushy eyebrows, now mostly wisps of white. Sixty-six years old, nearly blind, and partly paralyzed from a stroke, the white-haired and shriveled Charles Ponzi flashed his sly, ingratiating smile one last time.
He thought carefully about the reporter’s query, as well as the thousands—no, tens of thousands, even millions of people back in America who hung on his every word.
“Without malice aforethought,” Ponzi replied, “I gave them the best show that was ever staged in their territory since the landing of the Pilgrims!”
He’d finally become the legend he had always wanted to be—if not in the exact manner that he’d intended.
January 14, 1949
“Everything all right, Señor Ponzi?”
Ponzi’s friend, a nearly blind Brazilian who shared his wardroom at the free government hospital, surely already knew the answer to that question.
Charles Ponzi was penniless and ravaged by the effects of a stroke. He was awaiting another operation on his eye, which he hoped would improve his vision. After being deported from America as an “undesirable alien” (he had never obtained U.S. citizenship) and divorced from Rose, he’d endured a string of failed business ventures.
During World War II, Ponzi had been in Brazil, and then Argentina, where he bought a boardinghouse populated by prostitutes, alo
ng with a hot dog stand. He had hoped it would be the start of a national chain. Instead, it had gone bankrupt.
Now he was utterly alone. He occasionally sent letters to Rose, who was still living in Boston. They always went unanswered.
“Yes, yes,” he replied to his roommate. “Everything is fine.” It was always going to be fine. And then he closed his eyes for the last time, his final dream undoubtedly brightened by a street paved with gold.
EPILOGUE
Boston, Massachusetts
1962
By the time William McMasters finished his 206-page manuscript he was eighty-eight years old. He had believed his role in exposing his former employer’s massive fraud had been lost to history. Now, thanks to this book, the record would be corrected forever.
McMasters, never one to keep his opinions to himself, was sure to include a final prediction in his book.
“I do not anticipate that another Charles Ponzi will ever appear in the financial world.”
Just two years earlier, a twenty-four-year-old law school dropout had pooled together $5,000 to start his own investment company.
His name was Bernie Madoff.
5
He Loved Lucy: The Tragic Genius of Desi Arnaz, the Inventor of the Rerun
PROLOGUE
Desilu Studios
Hollywood, California
July 12, 1962
It was the first day of production. The Lucy Show—which was Lucille Ball’s first effort since the end of her hit show, I Love Lucy—remained a “Desilu” production, co-owned by Lucy and her ex-husband, Desi Arnaz, as part of a divorce settlement. The duo could have sold the company and split the proceeds, but that didn’t seem like a good business move. “Instead of divorce lawyers profiting from our mistakes,” Lucy said, “we decided that we’d profit from them.”
Though it might have seemed a little awkward to spectators, Desi, the show’s producer, walked onto his ex-wife’s set to say hello to the cast. He gave Lucy a kiss on the cheek and a gift: a small four-leaf clover made out of antique emerald jade.
“Lucy, dear,” he said, “I wish you all the luck in the whole ever-loving world. You really deserve it, kid.”
Lucy smiled. “Oh, Desi. How thoughtful.” They embraced. Then Lucy walked back in front of the cameras to rehearse the show.
Desi moved to a nearby catwalk that was used for lighting. Leaning against the railing, he watched his ex-wife for a moment. Then he broke down.
Wiping his tears away with a handkerchief, Desi looked up to see Lucy’s costar, the actress Vivian Vance. Vance had played Lucy and Desi’s wacky neighbor Ethel Mertz in their first series, and was now reprising her role as one of Lucy’s closest friends in real life. “Veev”—as Desi called her—was crying, too.
“Oh, Desi,” she said, as she stood beside him. “It just isn’t the same, is it?”
Desi shook his head. Their seemingly storybook marriage was over. His drinking and gambling was taking its toll. In fact, the empire Desi Arnaz had meticulously built since those impossible beginnings at a boardinghouse in Florida was slowly crumbling all around him.
Twenty-nine Years Earlier
Vista Allegre
Santiago, Cuba
August 12, 1933
“Get your mother out of the house right away! They’re coming for you!”
The young boy with the bronze skin, expressive face, and thick black hair was confused. His uncle Eduardo, screaming at him from the other end of the telephone, sounded panicked.
“Who? Who’s coming for us?” sixteen-year-old Desiderio Arnaz asked.
“Machado has fled the country,” his uncle answered. The Cuban president had been under siege for some time as a result of the island’s hard economic times. Now a full-scale revolt had been mounted, led by a collection of anarchists, students, Bolsheviks, and other malcontents. A general strike had been called across the nation. Once the Cuban generals turned against the president, the government fell.
“All Machadistas are being arrested or killed,” an unnerved Eduardo insisted. “Their houses are being burned.” Desi’s father, as mayor of Cuba’s second-largest city, was undoubtedly on the list of targets, as was his family.
“For God’s sake, don’t waste any more time!” his uncle snapped. “Get out of there!”
As Desi hung up the phone, he remembered back to the celebration for his father, Desiderio II, only months earlier. He was a beloved and respected politician. It was inconceivable that people could turn on him so quickly.
Desi heard what sounded like rumbling outside. From the window, he could make out a vast mob carrying guns, pitchforks, and torches. They seemed to be heading directly toward the Arnaz home. Desi thought there must’ve been at least five hundred of them.
Desi’s mother ran into the room. “Dios mio! What is happening?!”
Only one thought made its way through Desi’s frazzled head. Run!
Desi helped his mother with her coat, ran around the house gathering whatever cash he could find, and then grabbed his father’s pearl-handled revolver from the nightstand drawer.
Across the privileged neighborhoods of Santiago, thugs on horseback were slaughtering cows and setting buildings on fire.
Desi’s mother grabbed their pet Chihuahua while he took one last look at his beloved family home.
And then they ran.
• • •
Desi was in the backseat of the family car the next day as they drove past their home en route to a relative’s place in Havana where they would be safe. The beautiful old house was in ruins, with parts of the rubble still smoldering. All the windows had been broken. Shards of glass dotting the yard reflected the sun like cruel flashes of light. In the garden, the family’s piano was smashed into pieces. One of their cars was upside down on the sidewalk. His bicycle was twisted like a pretzel. Looters were still going in and out of the house, looking for more to take.
The scene was particularly shocking to Desi’s mother, who was still reeling from the knowledge that her parents had almost been killed earlier that day by a bomb planted in front of their home. A well-known Cuban beauty and an heiress to the Bacardi rum fortune, she was now homeless. And hopeless.
“Mi casa!” she said between sobs, her face pressed up against the car window. “Mi casa!”
Her brother Tony was driving and he looked on with great concern. “I know you are not in the mood now to believe what I’m going to say,” he began, “but take my word for it, you will recover. You will go on. You will again have the things you had and perhaps even more. But you will have to be strong.”
He then turned to the terrified teenage boy sitting in the backseat. No one had heard from Desi’s father in days. They all feared for him, but refused to consider that he might be dead. “Especially you, Desi,” Tony said. “You’re a young boy. You have your whole life ahead of you.”
At sixteen, the handsome, carefree Desi had owned his own motorcar and speedboat and lived in three different homes. Now all that he had left were the clothes on his back. Desi nodded his head, then closed his eyes and vowed that he would still make the life for himself he dreamed of.
U.S. Immigration and Naturalization Service
Key West, Florida
May 1934
As the border patrol guard inspected his visa and gestured him forward, Desi’s eyes focused on the familiar face waiting for him on the other side of the gate.
The man was laughing and held his arms open wide as his eldest son approached. Desi’s father had been arrested and jailed with other members of the former government when the revolution began. After six months in prison, he was released and allowed to flee in exile to Florida, where he now awaited Desi’s arrival.
“Bienvenido a las Estados Unidos de Norte America,” he said, embracing Desi tightly.
Desi smiled and breathed his first sigh of relief in many months. He was happy to be out of Cuba—even though his mother and many other family members still remained there.
r /> His father looked at him sternly. “Now,” he said, “those are the last words I will speak to you in Spanish. You must learn English.”
“I got A’s in English at school,” Desi reminded him, reverting back to his native language.
“Then try to say something.”
“Okay,” Desi said. But nothing came out. English was a lot easier to study than to actually use.
The two men boarded a bus bound for Miami, where Desi’s father had found them a place to stay. “I am very sorry I couldn’t have you join me here sooner, Desiderio. I didn’t have any money to support us both. I don’t have much now.”
Desi was struck by his once proud father admitting such a thing.
“It’s okay, Dad,” Desi said. “We’ll start all over again.”
Miami, Florida
February 15, 1935
Desiderio Sr. was visibly ashamed of his new circumstances, but Desi did not care. He hoped that before long they could save enough money to bring his mother over. He was confident that things would get better. They had to.
Desi’s father had formed a business with other Cuban exiles to sell mosaic tiles imported from Mexico. They’d rented a small warehouse with nothing but a concrete floor, a washbasin, and a toilet in the back. One day, as Desi was stacking and arranging inventory, he spotted his father measuring out a small space near the washroom. He knew what his dad was thinking. He also knew that his father was too proud to ever be able to vocalize it. So he approached his father instead.
“You know, Dad, I don’t think we should keep paying for the boardinghouse,” Desi said. “We can close in a little place here and turn it into a perfectly good room.”
Desi spun a picture in his head to make it all sound enticing. “We could put in a chest of drawers here,” he said. “We could have a nice bedroom over there. We’ll get a two-burner hot plate and some pots and pans. We’ll really be in business! And the food—oh, the food would be way better than what they have at the boardinghouse.”
For a long while, Desi’s father said nothing. He had given his boy everything he ever wanted since the day he was born. Finally, he answered. “I don’t want my son living in a warehouse.”