This website uses cookies to ensure you have the best experience. Learn more

Charles Ponzi Essay

2143 words - 9 pages

In criminology there are numerous theories as to the causes of different types of crime. These theories are extremely important in the continuous debate of the ways in which crime should be managed and prevented. Many theories have surfaced over the years. These theories continue to be explored individually and in combination, as criminologists search for the best solutions in ultimately reducing types and levels of crime. These theories include rational choice theory, social learning theory, and biology amongst many others. In this case study strain theory will be used to describe the reasons behind the white collar crimes of Charles Ponzi.
Charles Ponzi was born Carlo Ponzi in Lugo, ...view middle of the document...

He arrived in Boston in November of 1903 only arriving with two dollars and fifty cents in cash and “one million dollars in hopes” in which never left him. Ponzi began working odd jobs, including a dishwasher in a restaurant. In 1907, he moved to Montreal, in which he began work as a teller at Bank Zarossi. The bank was formed to cater to the new Italian immigrant population and charged high interest rates to their customers. Eventually, Bank Zarossi became bankrupt because of bad loans and Ponzi was left broke. Soon thereafter, he was sentenced to three years in a Quebec prison after he was caught forging a bad check. When he was released from jail, Ponzi got involved in yet another criminal venture, smuggling Italian immigrants across the border into the United States. This too landed him in jai in which he spent two years behind bars in Atlanta.
Ponzi returned to Boston, where he married stenographer Rose Gnecco in 1918. He worked various jobs, but none of those positions lasted long. It was during this time, Ponzi got the idea for the great scheme that would earn his name a place in history. He received a letter in the mail from a company in Spain that contained in it an international reply coupon which can be exchanged for a number of priority airmail postage stamps from another country. Ponzi realized that he could turn a profit by buying IRCs in one country, and exchanging them for more expensive stamps in another country.
Ponzi’s plan was to send money to agents working for him in other countries, who would buy IRCs and send them back to the United States. Ponzi would then exchange the IRC for stamps worth more than he paid for them, and sell the stamps. Ponzi reportedly made more than 400 percent on some of these sales. Not satisfied with running the profitable scheme on his own, Ponzi began to seek investors to turn even higher profits.
He promised investors outrageous returns of 50 percent in 45 days, or 100 percent in 90 days. Ponzi paid these investors using money from other investors, rather than with actual profit. These manipulative actions made him very rich, he reportedly made $250,000 a day.
Ponzi's scheme began to unravel in August 1920, when The Boston Post began to investigate his returns. The investigation set off a run on Ponzi's company, with investors trying to pull their money out of it.
Charles Ponzi was arrested on August 12, 1920, and charged with 86 counts of mail fraud. Owing an estimated seven million dollars, he pleaded guilty to mail fraud, and subsequently spent fourteen years in prison. Rose divorced him in 1937, and Ponzi died penniless in Rio de Janeiro, Brazil, on January 18, 1949.
Charles Ponzi’s elaborate scheme is an exceptional example of a white collar crime. The term "white-collar crime" was coined in 1939 by the sociologist Edwin Sutherland, who defined it as a "crime committed by a person of respectability and high social status in the course of his occupation" (Podgor, Israel, 1)....

Find Another Essay On Charles Ponzi

Ponzi Scheming Essay

1739 words - 7 pages ://www.4-traders.com/business-leaders/Bernard-Madoff-176/biography/ Clark, J., & McGrath, J. (n.d.). How ponzi schemes work. Retrieved from http://money.howstuffworks.com/ponzi-scheme1.htm Charles ponzi biography. (n.d.). Retrieved from http://www.biography.com/people/charles-ponzi-20650909 Ponzi schemes. (n.d.). Retrieved from http://www.sec.gov/answers/ponzi.htm Bandler, J., & Varchaver, N. (2009, April 30). How bernie did it. Retrieved from

Unsustainable Debt Essay

1881 words - 8 pages , knowledge of the original Ponzi scheme engineered by Charles Ponzi of Illinois, Ohio in 1919 is necessary. Charles Ponzi, a young man of 19 years of age offered to double the capital of investors in his company. He argued that by purchasing International Postal Coupons and redeeming them in a country with a higher exchange rate, he could provide fabulous returns[9]. As a result, the initial few investors received just that: fabulous

Frauds and Scams: Can You Be Protected from Them?

1721 words - 7 pages gangster Al Capone to invest $40,000 in a stock deal. Lustig kept Capone's money in a safe deposit box for two months, then returned it to him, claiming that the deal had fallen through. Impressed with Lustig's integrity, Capone gave him $5,000. It was, of course, all that Lustig was after. (10 Greats) Lustig would later die in Alcatraz Prison. Most scams are named after Charles Ponzi. Ponzi promised people if they invested with him they would

Research Paper

1126 words - 5 pages feel more superior. A great example of someone who is greedy is Charles Ponzi who is well renown for the “Ponzi Schemes.” The consequence in hell for being greedy is that you will be boiled alive in the very finest of oils (“Sins Revealed”). Next, sloth is one of the sins that we see all too much in today’s society. Sloth can be defined as laziness or lack of desire to do anything physical. Society now relies on someone else to do what is his

Irrational Exuberance and Financial Bubbles

2918 words - 12 pages . When news of price increases reached investors, there was an even greater enthusiasm spread by ‘psychological contagion’. Schiller claims that an overriding feeling of envy, greed and gambler’s excitement caused many to lose their rationality. Public confidence in the respective schemes was an important contributing factor to the inflation of prices. Marietta turns to the public confidence in Charles Ponzi in the 1920s. He purports that Ponzi

Jezz bezos

10437 words - 42 pages was one Bernard Madoff (the architect of a massive Ponzi scheme that would unravel in 2008). Madoff's own third-market division pioneered the business and preserved its market lead. Bezos and his team could see Madoff's offices in the Lipstick Building on the East Side through their windows high above the city. While the rest of Wall Street saw D. E. Shaw as a highly secretive hedge fund, the firm viewed itself somewhat differently. In David

jezz bezos

10437 words - 42 pages was one Bernard Madoff (the architect of a massive Ponzi scheme that would unravel in 2008). Madoff's own third-market division pioneered the business and preserved its market lead. Bezos and his team could see Madoff's offices in the Lipstick Building on the East Side through their windows high above the city. While the rest of Wall Street saw D. E. Shaw as a highly secretive hedge fund, the firm viewed itself somewhat differently. In David

When the Bubble Burst

1539 words - 6 pages By the time I arrived state side from my second tour in the Middle East the housing bubble had already burst. I noticed a drastic change in the way that many of my friends and family were living. Several of my friends that worked in real estate had sold their boats and seconds houses. My own stock portfolio had lost a third of its value. My sister and her husband had defaulted on their home mortgage leaving them scrambling for a place to live. I

phase diagram

4456 words - 18 pages Introduction: Chemical equilibrium is a crucial topic in Chemistry. To represent and model equilibrium, the thermodynamic concept of Free energy is usually used. For a multi-component system the Gibbs free energy is a function of Pressure, Temperature and quantity (mass, moles) of each component. If one of these parameters is changed, a state change to a more energetically favorable state will occur. This state has the lowest free energy

Revolutionary Work of Art

1890 words - 8 pages Walter Benjamin emphasizes in his essay, “The Work of Art in the Age of its Technological Reproducibility” that technology used to make an artwork has changed the way it was received, and its “aura”. Aura represents the originality and authenticity of a work of art that has not been reproduced. The Sistine Chapel in the Vatican is an example of a work that has been and truly a beacon of art. It has brought a benefit and enlightenment to the art

Enlightenment Thought in New Zealand Schools

1594 words - 6 pages In this essay I will be looking at how the political and intellectual ideas of the enlightenment have shaped New Zealand Education. I will also be discussing the perennial tension of local control versus central control of education, and how this has been affected by the political and intellectual ideas of the enlightenment. The enlightenment was an intellectual movement, which beginnings of were marked by the Glorious Revolution in Britain

Similar Essays

Ponzi: The Boston Swindler Essay

3315 words - 13 pages later investors. Named for Carlo Ponzi who promoted such a scheme in the 1920s based on a theoretical arbitrage in international postal reply coupons. “Fifty percent profit in forty-five days!” was the claim of Charles Ponzi. Ponzi was a purported financial wizard. In the summer of 1920, he ran an “investment company” in Boston. He claimed to reap great profits by trading postal reply coupons. Nonetheless, the investment scheme was a fraud. Ponzi

The Ponzi Scheme And Mental Illness

1420 words - 6 pages The Ponzi Scheme and Mental Illness December 26 1919 Charles Ponzi borrowed $200 to buy some office furniture. By January 1920 he then began telling the people of Boston how he could buy stamps and sell them overseas and give them a 50% return on their investment in 45 days and 100% return in just 90 days. The people came so fast he was able to pay returns of 100% in just 45 days. The word spread quickly and more investors came. Soon Charles

Ponzi Schemes Essay

1150 words - 5 pages 1. Charles Ponzi was a working-class Italian immigrant who was eager to find success in America. Bernard Madoff was already a multimillionaire before he started his scheme. Does that make one more unethical than the other? Why or why not? No I don’t believe it does make one more unethical then the other. Yes, Charles Ponzi was opportunistic trying to make his way in America while Madoff was a Wall Street financial fixture well aware of the risks

Bernard L. Madoff: The Largest Accounting Fraud In History

2395 words - 10 pages -A “Ponzi Scheme” is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop. (Investopedia) The Ponzi scam is named after Charles Ponzi, a clerk