7973. Old Colony Foreign Exchange Company (Boston, MA)

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
private
Start Date
August 13, 1920
Location
Boston, Massachusetts (42.358, -71.060)

Metadata

Model
gpt-5-mini
Short Digest
eadde970

Response Measures

Full suspension

Description

Noteholders made a 'frenzied run' on the Old Colony Foreign Exchange Company's Devonshire Street offices (Aug 13-14, 1920); the company temporarily suspended payments and briefly reopened to pay principal, but was shortly closed and placed in receivership (receivers appointed Aug 20, 1920). The run was driven by the collapse and criminal charges surrounding Ponzi and revelations of likely large liabilities (bank-specific adverse information / fraud).

Events (4)
1. August 13, 1920 Run
Cause
Bank Specific Adverse Info
Cause Details
Frenzied withdrawals by note-holders triggered by the collapse/scandal surrounding Charles Ponzi and the company's suspected improper/insolvent dealings.
Measures
Company announced temporary suspension of payments for three or four days on advice of its attorney; guards closed offices; payments later resumed briefly at another office.
Newspaper Excerpt
The arrest of officers of the Old Colony Foreign Exchange Company came after a frenzied run by note holders upon the company's offices on Devonshire street.
Source
newspapers
2. August 14, 1920 Other
Newspaper Excerpt
An hour later the Devonshire street offices of the company were reopened and payment of principal on unmatured notes was resumed. The notice to vacate came soon afterward and again the offices were closed. A notice posted on the doors said that further payment would be made at an office ... beginning Monday morning, but that no payment would be made to-morrow.
Source
newspapers
3. August 14, 1920 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Temporary suspension of payments following the run and revelations tying the company's activities to Ponzi-related investigations and arrests; offices were closed and notice posted about changed payment locations/times.
Newspaper Excerpt
Brightwell said ... the company had decided to suspend payments temporarily on advice of its attorney.
Source
newspapers
4. August 20, 1920 Receivership
Newspaper Excerpt
The Old Colony Foreign Exchange Company, a rival of Ponzi ... also was in receivership by Judge Morton. John E. Hannigan, a lawyer, was named receiver.
Source
newspapers

Newspaper Articles (12)
1. August 14, 1920 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, August 14, 1920

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FOUR OTHERS IN JAIL ON LARCENY CHARGE Bonds Are Extremely Heavy Owing to Large Amount of Money Handled Before Crash By Associated Press Boston, August 13.-Four men who have accepted millions of dollars from New England investors in the last few months on promises of payment of fabulous interest were behind the bars tonight. Charles Ponzi, whose spectacular financial dealings have made his name known the country over, was surrendered today by the man who furnished $35,000 bond for him release after his arrest by the federal authorities yesterday. Unable to find another bondsman, Ponzi was taken to the Middlesex county jail at East Cambridge. Three officers of the Old Colony Foreign Exchange Company were arrested, taken into the municipal court and held in $50,000 bonds each on a technical charge of larceny of $500 from persons unknown. In default of bonds spent the night in the Charles street they jail. They are Charles M. Brightwell, president and treasurer of the concern; office Raymond Myers, manager, and Fred Meyers, sales agent. All three pleaded not guilty. That the activities of this company might have rivalled in extent the dealings of Ponzi's Securities Exchange Company was intimated by Albert Hurwitz, assistant district attorney of Suf. folk county when he told the court that the amount involved in its transactions would probably be shown to be hundreds of thousands of dollars It was upon this representation that hê asked that the bonds be set at a high figure. The three men will be given a hearing on August 24. FURTHER PROCEEDINGS Further criminal proceedings were taken against Ponzi today. In the mucourt a warrant nicipal blanket was issued charging him with larceny in 53 counts, totaling $24,000 Police inspectors were at the federal building prepared to rearrest Ponzi if the federal authorities released him again on bail, but as he was taken to jail the municipal court charges against him were held in abeyance. in Further bankruptcy proceedings which for the first time partners of were mentioned were in Ponzi brought the federal court. The three petitioners,were holders of Ponzi's notes for a total of $2,625. Rumors were current tonight that further developments bearing on "getrich-quick' schemes might be expected in the near future There was no hint as to the nature of these developments. Joseph C. Allen, state bank commissioner, said he knew of no foundations for reports that Ponzi's crash might volve banking institutions inany except the Hanover Trust Company, which was closed by the commissioner earlier in the week. Ponzi was a director and shareholder in this bank. through which he checked out millions of dollars BURRELL IS SILENT State Treasurer Fred J. Burrell refused to make any statement regarding the $125,000 of state funds on deposit at the He had been criticised Hanover Trust Company for leaving the funds in a bank of which Ponzi was a director after the latter's prison record had been revealed. More than a hundred note holders 1 re in the exchange company's outer office this forenoon when a man emerged from the inner office and announced that "by order of the district attorney' no payments on notes would be made "for three or four days. Brightwell said later that this announcement was erroneous so far as mention of the district attorney was concerned, but that the company had decided to suspend payments temporarily on advice of its attorney We want our money," several of them demanded. WANT THEIR MONEY There was a rush toward the inner office. Guards employed by the concern struggled to keep the people back. Threats were made against Brightwell. his neck. one man guards succeeded "I'll Finally break the shouted. in clearing the offices and the doors were closed and locked. But the outer hall and mained in the crowd surged reagainst the doors with such force that the glass was broken. : The attorney general's office also was engaged today in studying the status and legal precedents in order to determine whether any action could be taken by the state to compel persons who had cashed their notes on Ponzi. with or without the fifty per cent interest which he paid on notes-that had run forty-five days, to turn the money

2. August 14, 1920 Daily Kennebec Journal Augusta, ME
Article from Daily Kennebec Journal, August 14, 1920

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# ONLY ONE BANK HIT Joseph C. Allen, state bank commissioner, said that he knew of no foundation for reports that Ponzi's crash might involve any banking insututions except the Hanover Trust Company, which was closed by the commissioner early in the week. Ponzi was a director and shareholder in the bank, through which he checked out millions of dollars. Mr. Allen made it known today that in connection with the closing of the Hanover Trust Company he had caused the state seal to be placed on all the safe deposit boxes in that institution used by Ponzi or by officers or employes of the bank. He said this was done as a precaution against the possibility of removal of securities or other valuables pending the settlement of the bank's affairs. Other renters of safe deposit boxes in this bank will be permitted to withdraw anything they please unless they are debtors of the bank. In that case they will be compelled to leave in their boxes any valuables equal in amount to their indebtedness. State Treasurer Fred J. Burrell refused to make any statement regarding the $125,000 of state funds on deposit at the Hanover Trust Company. He had been criticized for leaving the funds in a bank of which Ponzi was a director after the latter's prison record had been revealed. The arrest of officers of the Old Colony Foreign Exchange Company came after a frenzied run by note holders upon the company's offices on Devonshire street. One of the results of this run was an imperative notice served upon President Brightwell by the trustee of the building to vacate his quarters within an hour and a half. Shortly afterwards the offices were closed. More than a hundred noteholders were in the exchange company's outer offices this afternoon when a man emerged from the inner office and announced that "by order of the district attorney" no payments on notes would be mare for three or four days." Brightwell said later that this announcement was erroneous so far as mention of the district attorney was concerned, but that the company had decided to suspend payments temporarily on advice of its attorneys. The announcement brought loud cries from the waiting crowd. "We want our money," several of them demanded. There was a rush toward the inner offic. Guards employed by the concern struggled to keep the people back. Threats were made against Frightwell. "I'll break his neck," one man shouted. Finally the guards succeeded in clearing the offices and the doors were closed and locked. But the crowd remained in the outer hall and surged against the doors with such force that the glass was broken. Through the broken doors someone announced that in about half an hour the company would begin making payments at another office. "It's a lie," shouted a man in the crowd. "They are not paying there. We were there and they locked the offices up. We want our money." An hour later the Devonshire street offices of the company were reopened and payment of principal on unmatured notes was resumed. The notice to vacate came soon afterward and again the offices were closed. A notice posted on the doors said that further payment would be made at an office (Continued on Page 4 Col. 5)

3. August 14, 1920 Albuquerque Morning Journal Albuquerque, NM
Article from Albuquerque Morning Journal, August 14, 1920

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GET- RICH QUICK PONZI AND THREE ASSOCIATES ARE BEHIND JAIL BARS Ponzi was a director in this bank. "Financier" and Officers of through which he checked out the Old Colony Foreign millions of dollars. Mr. Allen made known today he Exchange Company Arhad caused the state seal to be rested on Larceny Charge placéd on all the safe deposit boxes in the Hanover institution used by (OY MORNING JOURNAL SPECIAL LEASED WIRE) Ponzi or by officers or employes of Boston. Aug. 13.-Four men who the bank. He said this was done have accepted millions of dollars as a precaution against the possible removal of securities. from New England investors on State Treasurer F. J. Burrell repromises of payment of fabulous fused to make any statement reinterest were behind bars tonight. garding the $125,000 of state Charles Ponzi, whose spectacular funds on deposit in the Hanover financial dealings have made his Trust company. name known the country over, was Frenzied Run On Offices. surrendered today by the man who The arrest of officers of the Old furnished $35,000 bonds for his reColony Foreign Exchange company lease yesterday after his arrest by the federal authorities. Unable to came after a frenzied run by note holders upon the company's offices find another bondsman, Ponzi was on Devonshire street, One result taken to the Middlesex county jall. of this run was an imperative Three officers of the Old Colony notice served upon President Foreign Exchange company were Brightwell by the trustee of the arrested, taken into municipal building to vacate his quarters court and held in $50,000 bonds within an hour and a half. Shortly each on a technical charge of larafterward the offices were closed. ceny of $500 from persons unMore than a hundred note holdknown. In default of bonds they ers were in the exchange company's spent the night in jail. They are outer office, when a man emerged Charles M. Brightwell, president from the inner office and anand treasurer of the concern; Raynounced that by order of the dismend Meyers. office manager, and trict attorney no payments on Fred Meyers, sales agent. They notes would be made "for three pleaded not guilty. That the activities of this comor four days." Brightwell said that this announcement was erronéous pany might have rivaled in extent as far as mention of the district the dealings of Ponzi's securities exchange company was intimated attorney was concerned; but that by Albert Hurwitz, assistant dis. the company had decided to sustrict attorney, when he told the pend payments temporarily on ad court the amount involved in its vice of its attorney. Crowd Demands Money. transactions probably was hundreds of thousands of dollars. The The announcement brought loud cries from the waiting crowd. three men will be given a hearing on August 24. 'We want our money," several of them demanded. Further Charges Face Ponzi. There was a rush toward the inSamuel Zorn. said to have been her office. Guards struggled to employed by the company as an agent, was arrested at his home tokeep the people back. Threats were made against Brightwell. night on the same charge as three officers of the concern. No bail "I'll break his neck," one man shouted. was fixed and he was locked up for the night. Finally the guards cleared the offices and the doors were locked. Further criminal proceedings The crowd remained in the hall and were taken against Ponzi today. In the municipal court a blanket surged against the doors until the warrant was issued charging him glass was beaken. with larceny in fifty-three counts, Through the broke) doors some totaling $24,000. The municipal one announced that the company court charges were held in abeywould begin making payments at other Office. ance, as Ponzi went to jail on the federal warrants. "It's a lie," a man sh ut 1. "We were theté and they 10 ked the ofFurther bankruptcy proceedings in which partners of Ponzi were fives up. in want our money An hour later the Devonshire mentioned, were brought in federal court. The three petitioners were street offices of the company were holders of Ponzi's notes for $2,625. re-opened and payment of princiThey asked that Ponzi and John S. pal on unmatured notes was reDondero, of Medford, and Gugliel sumed. The notice to vacate came mo Bertollotti, of Parma, Italy, and again the offices were closed. named as partners in the SecuriA notice posted on the doors said ties Exchange company, be adfurther payments would be made judged bankrupt. at another office beginning Monday but no payments would be Further Developments. made tomorrow. Rumors were current tonight The total amount of Ponzi's liathat further developments bearing bilities is still unetermined, Edwin on "get rich quick" schemes might be expected in the near future, but L. Pride, the auditor engaged by there was no hint as to the nature. the federal authorities to go over Joseph C. Allen, state bank comPonzi's accounts, said today that missioner, said that he knew no although his work was not yet foundations for reports that Ponzi's finished, he had found liabilities totalling $8,000,000 and that crash might involve any banking institutions except the Hanover Ponzi had told him that his assets amounted to $4,000,000. Trust company, which was diosed.

4. August 14, 1920 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, August 14, 1920

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SECOND PONZI COMPANY HELD IN BANKRUPTCY Bank Commissioner Closes Industrial Association, Saying Cash Is Gone FOUR ARE UNDER ARREST Get-Rich-Quick Schemes Result in Rush of Depositors to Get Money Boston, Aug. 14.-Bank Commissioner C. Allen today took of the association a bank at 37 Industrial charge Joseph affairs Cross of conducting the street Polish H. of the Hanover comthis private city. Henry Trust Chielinski, of in the chief President pany, depository the which was by the Charles Wednesday Ponzi, commissioner closed associa- last is president of the industrial tion. Bank Commissioner Allen said that of the were or of doubtful value and there was virtually no cash the either loan bad association left. in- He his affairs were hopelessly with those of the The terwoven said Trust company. capital Hanover it of had the association is $13,775.00 and deposits of about $350,000. Four Behind Bars men who have accepted milof dollars from lions Four New England in the last few of payment of are behind investors terest, promises the bars. fabulous months, in- on Ponzi, whose spectacular financial have made his name over and the dealings country three officers known of the Old Colony Foreign Exchange were arrested, court and on company the municipal technical held taken charge $50.- into 000 bonds each on a of of $500 from persons unIn default of bond they spent known. larcency Charle3 in jail. They are president of the concern; last urer M. Brightwell, night Fred and Meyers, treas- not sales agent. All three pleaded guilty. Samuel Zorn was arrested at his in the Dorchester last on a warrant charging of from persons night home $500 district unknown. larcency This was the same charge upon the three officers of Old Foreign Exchange company which Colony the day. the were arrested earlier in Dealings Also Large the activities of this company have rivaled in of Ponzi's dealings might That Securities intimated extent Ex- the by company was assistant atof Suffolk county, he torney Albert change Hurwitz, district when the court that the in the transactions be shown to be told volved would hundreds amount probably in- of thousands of dollars. It was upon that asked bonds be set at a that this the representation high he figure. hear The three men will be given a ing on Aug. 24. Ponzi's Partners Involved bankruptcy of in the first time which Further for proceedings partners were mentioned, were brought the federal court. pewere holders of titioners in Ponzi The three Ponzi's notes for a total of $2,526. They that Ponzi and of Medford and of Parma, Italy, tollotti asked dero Guglielmo Securities John named S. Don- Ber- Ex- as his partners in the change company, be adjudged bankrupt. Seals Officers' Boxes Mr. Allen made it known in conwith the closing of the HanTrust company that state seal to be on nection ed over the placed he had caus- all safe deposit boxes in that instiused by Ponzi or by or tution the He officers said this employes of the bank. the was done as a precaution against possible removal of securities or other valuables pending the settlement of the bank's affairs. The arrest of officers of the Old Colony Foreign Exchange company note after a frenzied run by upon the Devonshire street. One of reholders on came company's the offices sults of this run was an imperative notice served upon President Brightwell by the trustee of the building an to vacate his quarters within a half hour. Shortly afterward the offices were closed. More than a hundred note holders Exwere in the Old Colony Foreign change company's outer offices for half day. Cry for Money announcement that payment loud been suspended from the waiting had cries The brought crowd. "We want our money," several shouted. There was a rush toward the inner Guards employed by the con to keep Threats were office. back. cern struggled made the against people Brightwell.

5. August 14, 1920 New-York Tribune New York, NY
Article from New-York Tribune, August 14, 1920

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Ponzi and 4 Others Put Behind (aus aDvd was ) the $125,000 of state funds on with the Hanover Trust Company. had been criticized for leaving funds in a bank of which Ponzi director after the latter's record had been revealed. The arrest of officers of the Colony Foreign Exchange Comp: came after a frenzied run by holders upon the company's offices Devonshire Street. One of the of this run was an imperative served upon President Brightwell the trustee of the building to his quarters within an hour and a Shortly afterward the offices closed. More than a hundred note hold were in the exchange company's office this forenoon when a emerged from the inner office and nounced that "by order of the Dist Attorney" no payments on notes be made "for three or four Brightwell said later that this nouncement was erroneous SO far mention of the District Attorney concerned, but that the company decided to suspend payments rarily on advice of its attorney. The announcement brought cries from the waiting crowd. "We want our money!" several them demanded. There was a rush toward the in office. Guards employed by the cern struggled to keep the people Threats. were made against Brightw "I'll break his neck!" one shouted. Finally the guards succeeded in ing the offices and the doors closed and locked, but the crowd mained in the outer hall and against the doors with such force the glass was broken. Payment Promised Through the broken doors some announced that in about half an the company would begin making ments at another office. "It's a lie!" shouted a man in crowd. "They are not paying We were there and they locked offices up. We want our money." An hour later the Devonshire offices of the company were reope and payment of principal on matured notes was resumed. notice to vacate came soon afterw and again the offices were closed. notice posted on the doors said further payments would be made office on Oliver Street beginning Monday morning, but that no payme would be made to-morrow. Attorney General Allen, who has investigating the activities of and of the Old Colony Foreign change Company, said to-day that knew that the Exchange Company sent large sums of money abroad. declined to make any further statem with regard to its affairs. During day the Attorney General was engaged in examining notes on sent or brought to his office in in and request his to sponse

6. August 15, 1920 New-York Tribune New York, NY
Article from New-York Tribune, August 15, 1920

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the disorder, but failed to erase the frowns. Creditors Vow Vengeance The note holders after having their paper recorded left the State House vowing vengeance on the man who took their money. The object of their wrath, however, was safe from harm behind the bars in the East Cambridge jail, smiling as of yore and living on the best in the way of food that money could command. Ponzi arose this morning at 6 o'clock after a fine night's sleep and, to all appearances, was not in the least disturbed by the fact that he spent the night in jail instead of his home in Lexington. He had a conference with his lawyers, and apparently is confident of his early release. An interesting outcome of the case is the formation of a note-holders' protective committee, which proposes to prosecute all Ponzi winners of the last four months who do not give up their profits for the benefit of all investors. The committee also proposes to lend all assistance possible in the task of unearthing Ponzi assets. Still another sidelight on the case was the admission by Police Commissioner Curtis that as the result of many rumors of the members of the Police Department being involved in the Ponzi affair, both in the way of investors and agents, a rigid investigation had been ordered. Curtis declared that any policeman found guilty would get the limit of punishment. Every employee of the department has been furnished a questionnaire, which he must fill out and return, requiring him to state whether he bought Ponzi notes, was asked to buy, or asked others to buy, giving all names and amount of money in each case. The Polish Industrial Association closed to-day was founded by Chmielinski and gave him his first step toward prominent standing in the local financial world. For years it was a big success, and the Hanover Trust Company was an outgrowth of this success. The latter had its birth near the site of the Polish bank, only to outgrow the neighborhood and open its fine quarters in the business district. The closing of the private bank on the heels of that of the trust company caused more measiness as to the size of Ponzi's assets S. The investigation by the State Attorney General into Ponzi's outstanding notes shows that these notes already represent fully $2.000.000 with hundreds that have been received in the mail, yet to be examined, doubtless hundreds of others yet to be heard from, not to mention the many who still have faith in Ponzi, and others who don't care about disclosing the fact that they were so gullible. Liabilities Pile Up As this evidence of tremendous liabilities piles up the creditors realize that the assets must develop into a large sum, if they are to have anything more than their paper notes to show for their confidence in the wizard. To-day was the fifth day the Attorney General's staff of assistants has received noteholders. The office investigators are two days' behind in their examination of the mail. The staff will work all day to-morrow checking up information contained in the letters from holders of Ponzi notes. Letters are coming in at the rate of 1.500 a day, while personal calls easily run to 500 daily. Occasionally some one drops in to turn over the profit he made on a Ponzi note. One or two have sent the cash by mail. Because of what he believes to be the importance of the case, the Attorney General has directed that the office be kept open all day Sunday to receive reports from Ponzi's creditOFS. The officials say that it is impossible at present to make any accurate statement of the number of creditors who have been reported either in person or by letter. The number will certainly run well into the thousands. Developments of the day in connection with the rival to Ponzi, which went to the wall yesterday, centers about the missing $100,000. The officials of the company, the Old Colony Foreign Exchange Company, withdrew $100,000 from Boston banks a few days before their arrest, and now refuse to tell what was done with the money, according to police headquarters. They also have in their possession a check for $75,000 said to be on the Hanover Trust Company, transferring to one of the Old Colony Foreign Exchange Company officials. now under arrest, funds of the company.

7. August 19, 1920 Burlington Weekly Free Press Burlington, VT
Article from Burlington Weekly Free Press, August 19, 1920

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MR. PONZI MUST PRODUCE $5,000,000 Sum Represents Amount Not Returned When Bubble Burst Boston. Aug. 16.-Five millions of dollars was set to-day as the probable amount of the public's money entrusted to Charles Ponzi and not returned by him before his quick-riches bubble was burst last week. Edwin L. Pride, the accountant who is undertaking the federal audit of Ponzi's accounts. explained that his preliminary report of liabilities aggregating $7,000,000 was based on the face value of the unredeemed notes issued by Ponzi, for fifty per cent profit in ninety days. The actual money represented in these liabilities he said. would be between $4,500,000 and $5,000,000. What proportion of the debts of the discredited financier are covered by his available assets was still in doubt. Officials of the State and federal jurisdictions, pursuing independent investigations. said they were unable to say how nearly correct Ponzi's statement that he has $4,000,000 in ready assets would prove to be. Should he be able to produce such a sum, the public loss would be relatively small. but it was pointed out that aside from such expenditures as he may have made for personal purposes, all inquiries to date have failed to disclose any source of profits to defray the fifty per cent bonuses given early depositors, except the investment of those who came after them. Receivership proceedings. which will be brought in court to-morrow. are expected to result in a co-ordination of activities to run down Ponzi's assets. Through the receivers to be appointed. officials said, an attempt undoubtedly will be made to marshal these assets and to obtain for the benefit of present creditors the large profits received by those whose notes matured before payments ceased. Ponzi. the financial wizard of yesterday and the ex-convict and discredited leader of a new finance to-day was in the East Cambridge Jail, a federal prisoner. The ball which he had expected to obtain was not forthcoming. and he was described as weary and hollow-eyed from sleepless hours of worry, in contrast with the dapper financier. magnet of crowds. who followed his cane-swinging. well-groomed figure through Boston streets. The banks which were involved in his collapse, the Hanover Trust company and the Polish Co-operative society, it is indicated. will be closed for some time. His offices, into which a flood of money had poured for months in amounts so great that they had to be taken out at times in bushel baskets, were deserted save for Miss Lucy Mell. the 18-year-old girl who was his office manager. She said she still held notes of Ponzi for $450. long since due her. which she had made no attempt to cash because of her faith in him. Other holders of Ponzi notes went to the State House to-day with creditors of the Old Colony Foreign Exchange company, to add their information to the records of the State authorities. At the federal building. creditors' petitions against Ponzi and Joseph Daniels, as copartners. and petitions for a recceivership and bankruptcy proceedings against the other company and its officials continued to pour. The federal inquiry to-day was centered a conference to which Assistant United States Attorney Shea had invited Miss Mell, Auditor Pride and postal inspectors. The conference lasted three hours and at its conclusion it was said that no statement would be made.

8. August 20, 1920 Every Evening, Wilmington Daily Commercial Wilmington, DE
Article from Every Evening, Wilmington Daily Commercial, August 20, 1920

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RECEIVERS FOR PONZI APPOINTED BY COURT Imprisoned Financier Hints of Sensation in Future Developments. By Associated Press to Every Evening Boston, Aug. 20.-The broken forPonzi and of of in tunes thousands of Charles investors receivership his the quick-rich interests scheme were placed in by Judge Morton of the Federal District Court today. The court appointed three receivers William R. Sears of Cohasset, John Forbes and Edward A. Thurston It was that Perkins of Fall of Milton River. $50,000 ordered each. they in bonds of brief from the where he has a bridge In a qualify jail, respite been East Cam- prisoner be surrendered a ago, taken a Ponzi since was yesterday before week Federal here for a on that he used the in of a defraud. He charges scheme commissioner to mails waived hearing pursuit examiwas whisked back to in bonds. was set nation default and of $25,000 Trial Federal jail Disfor September term of the trict Court. Ponzi told deputy United States had his from the that marshals absence who charge jail of him his during downfall was due to withdrawal of support by a man prominent in the city's financial If his liberty under guard for Ponzi make be circles. able sixty to days, given good asserted dollar for he would dollar on every promise and prove his solvency. "There is likely to be a big blowup within a few days, he was quoted as saying to the deputies, "if I tell what I know about a certain man prominent in Boston who poses as a philanthropist and public benefactor. There will be a of sentiment. man to stand by me, was to me agreement great promised change support financially, and This under but he the lion share wanted of the enough profits, he and because he did not get drew out. Ponzi remarked as an instance of continued confidence in him that he had a check for investment he left the received public before $5,500 jail for this morning, which he turned over to the sheriff. Ponzi's liabilities, as uncovered by the State's attorney general last night totalled $4,308,874, representing the claims of 10,200 investors, plus the 50 per cent interest promised. New York, Aug. 20.-Antonio B. Salconducted a bank in Montreal in with Charles as ant, was out to viati, 1918, who pointed Ponzi Detective his Michael assistFiachetti yesterday afternoon at Broadway and Twenty-third street by Detective George H. Rioux of the Montreat police. Fiachetti placed the man under arrest. He admitted his identity and offered no resistance. The warrant from Montreal charged larceny of $994.85 from Francisco Charpaleggio, an investor. The amount of assets to be handled is uncertain. Ponzi's statement that they would aggregate $4,000,000 being the only estimate available. The receivers will be called upon to adjust claims which are likely to run to $7.000,000 according to the estimate of Edwin L Pride, the accountant who has been making an audit of Ponzi's liabilities for the federal authorities. These figures include the 50 per cent profits promised by Ponzi to his investors. also will upon to will against The decide receivers whether they proceed be called paid those persons to whom Ponzi the 50 per cent profit before he stopped doing business. He asserted yesterday that he had paid out $7,500,000. Some of these payments were refunds of actual investments only. The amount of money paid out by Ponzi in and subject to action by the should it be was given the persons receivers, preference interest held that who $2,000,- undue received it. would be approximately 000. The Old Colony Foreign Exchange Company, a rival of Ponzi in, offering high rates of interest for investments, also was in receivership by placed Judge Morton. named John E. Hannigan, a lawyer, was receiver. Attorney-General Allen of Massachuthe visible assets to like $150,000 setts something said that business and amounted that in notes the total of the company's was probably $250,000. The company's counsel said creditors would receive 90 per cent.

9. August 20, 1920 The Barre Daily Times Barre, VT
Article from The Barre Daily Times, August 20, 1920

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PONZI CLAIMS OVER $4,000,000 IS LEFT The Liabilities of Noteholders Are Likely to Be $7,000,000, According to the Estimate of Edwin Pride, the Accountant Who Has Been Making the Audit. Boston, Aug. 20.-The broken for tunes of Charles Ponzi and the interests of thousands of investors in his quiek-riches scheme were placed in receivership by Judge Morton of the fed eral district court to-day. The court appointed three receivers: William R. Sears of Cohasset; John Forbes Perkins of Milton, and Edward A Thurston of Fall River. It was or dered that they qualify in bonds of $50,000 each. The amount of assets to be handled is uncertain, Ponzi's statement that they would aggregate $4,000,000 being the estimate to adjust The only receivers claims which will available. already be called aggregate upon more than that sum of the the total state's records attorney of noteholders general, tabulated on and the basis by is to to to Edwin L. the an accountant, likely the estimate run who of has $7,000,000, been making Pride, according for fedincluderal audit the authorities. of 50 Ponzi's liabilities These figures the ed cent Ponzi to in the his notes investors, which per he and promised incorporated by issued for payment in 90 days. With the probability that settlement of claims will be on the basis of actual will be one-third. The down investments, by approximately the figures pared r be called to they will d decide receivers against those whether also will upon proceed persons to whom Ponzi m cent before he W stopped paid the doing 50 per business. profit He asserted yesterday that he had ee paid out $7,500,000. Some of these P payments were refunds of actual in M of P to abandon their re having ised vestments profits hastened only, in the hundreds persons promrun on withdrawals th several later of or stages curities which of marked the operations of Ponzi's the Se. Co. fa money paid out at subject to action interest, amount of Exchange and Accordingly, by Ponzi by the the in el it be held of preference was the m received receivers it, should would given persons that undue who be approximately W $2,000,000. at Of the receivers named by Judge and Thurston are No Morton, and Sears Perkins man. lawy. ers, a business Sears tr appeared at the hearing on the m as the th Legal Aid of this tive tion of for the receivers society representa- petiin behalf of some at is a city, creditors. of and the Thurston former of chair the man Republican state commitbr is a former the Calumet treasurer tee. Perkins of secretary and Herla and cu Mining Co. M No Receiver for Old Colony Foreign Exchange. in pie The Old Colony Foreign exchange cre company, a rival of Ponzi in offering interest for wi Be was in by co Judge high also rates Morton, of placed receivership investments, John E. of a named ser ceiver. this city, lawyer, being Hanningan as re ar A belief that ^creditors of ed receive per the their com pany 90 cent of in. cit vestment was expressed in the fed. court Robert ha of company. This sel eral for the by Gallagher, figure coun. is than the M be General Allen considerably of Attorney higher of estimate Massa. chusetts. who said yesterday that the assets thus far $150,000 and total visible something of the like amounted that the the to company's business in be notes was probably $250,000. Au Mr. Gallagher told the court that the assets in the Attorney General Allen to sion aside the of from posses. and there was a of $1500 a bank in the wife in police of Boston the deposit name of the president of the company, Dir a in a Charles York bank Brightwell deposit New of $15,000. and the office furniture. Judge Morton said that the receiver ship would cover the three petitions case, one the Red one each against and the iel filed pany Brightwell in and the against President com a this respect the tio different Meyers. In secretary. action Raymond was from that in the Ponzi re ceivership where only one of the sex cal eral petitions was acted on.

10. August 21, 1920 New-York Tribune New York, NY
Article from New-York Tribune, August 21, 1920

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Receivers for Ponzi Affairs Brother-in-Law of Boston Finance Adventurer in and His Agent Arrested on Charge of Larceny Hearings Begin To-day Rival Concern, Also Placed in Receivership, May Pay 90 Per Cent of Debts BOSTON, Aug. -Settlement of the affairs of Charles Ponzi, whose scheme of high finance was stopped with millions of dollars of the public's money tied up in it. was advanced today with the appointment of three receivers. At their suggestion James M. Olmstead, referee in bankruptcy, was assigned to take testimony for them, and hearings will be begun to-morrow with the object of rounding up all possible information of assets available to the receivers. The Old Colony Foreign Exchange Company, a rival of Ponzi in offering high rates of interest for investments, also was placed in receivership by Judge Morton. John E. Hannigan, of this city, a lawyer, was named as recoiver. Another arrest was made when Ponzi's brother-in-law Rinaldo Bosselli, surrendered himself to the local police and was held on a charge of larceny of $300. Bosselli is said to have acted as an agent for Ponzi's company. His home is in the North End, where it is understood he obtained many clients among the foreign population. He furnished $5,000 bonds for appearance at a hearing to-morrow. Ponzi to Surrender Property Ponzi, brought from the East Cam bridge jail to the Federal Court, underwent formal examination as an "alleged bankrupt,`' agreeing to surrender all his property to meet the claims against him. He has estimated his assets at $4,000,000, while official reports and estimates of his liabilities place them between $4,000,000 and $7.000,000, with a scaling down on many notes of the 50 per cent profit which he promised investors, and possible recovery of this amount from those I already paid. With the probability that settlement of claims will be on the basis of actual investments, the figures will be pared down by approximately onethird. Ponzi asserted that he had out of these were refunds of actual hundreds of having payments vestments paid $7,500,000. yesterday Some persons inhastened to their in the run withmarked the the of Ponzi's promised rawals stages which profits of operations abandon several of of Exchange Company. Accordingly, the amount of money paid out by Ponzi in interest. and subject action by the receivers, should it be held that undue preference was it, given the persons who received would be approximately $2,000,000. Hearing To Be Public The hearings on Ponzi's affairs will be public, William R. Sears chair the receivers. announced. was before the receivers for interrogation this afternoon. but absence of his counsel caused the referee and the pos tpone until to-morrow morning the first of the The receive who in addition to Mr. Sears are John F Perkins and Edward A. Thurston, were appointed a petition brought against Ponzi as an individual. No action was taken on the petition in which John S. Dondero is named as partner Counsel for Dondero announced to-night that they would file in the Federal court to-morrow a petition for an immediate trial on this petition. asserting that Dondero was not a partner Ponzi, was not involved in his failure, and had no creditors Of the Sears and Thurston are lawyers, and Perkins a business eared the representative of the Legal Aid Society of this city, and in behalf of some of the creditors. Thurston as formerly chair man of the Republic State Committee. Perkins was merly secretary and treasurer of the Calumet & Hecla Mining Company. Creditors May Get 90 Per Cent Belief that creditors of the Old Colony Foreign Exchange Company would receive 90 per cent of their inAtment was expressed to the court by Robert Gallagher, counsel for the company. This figure is considerably higher than the estimate of Attorney General Allen of Massachusetts, who yesterday that the visable assets amounted to something like $150,000, the total of the company's business in notes was probably $250.Mr. Gallagher tole the court that aside from the assets in the possession Attorney General Allen and the police, there was deposit O1 $1,500 in Boston bank in the name of the wife the president of the company, Charles Brightwell, a deposit in York bank of $15,000, and the offurniture. Judge Morton said that the receivership would cover all the three petitions filed in the case, including one against the company and one each against President Brightwell and the secretary, Raymond Meyers In this respect from receivership. where the the of the Ponzi proceeding differed only that one in several petitions filed as acted on.

11. August 23, 1920 Evening Star Washington, DC
Article from Evening Star, August 23, 1920

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JUDGE TO OFFICE BOY, PONZI LOSERS Estimated That Half of 30,000 Investors Withdrew Funds. BOSTON. August 22 (by the Associated Press).-A list of investors in the Ponzi postal coupon scheme-persons who trusted in the ability of the overnight financier to make riches for them in a month or two-looked like a cross section of the community when it was printed today. All walks of life were there -men and women of the professions, of business and of labor. It is estimated that 30,000 in all placed their money in the scheme which now is in receivership, and of these about half withdrew it with or without the 50 per cent interest which Ponzi paid before the crash. The others are relying on federal receivers to recover what is left. The list runs the gamut from judge to office boy. Former liquor dealers turned to Ponzi in their hope of recouping their broken fortunes: a wealthy spinster was there, a building contractor. business men of high standing, a sporting promoter, soldiers, real estate dealers, manufacturers, police inspectors and the ordinary laborer in large numbers. In the Italian quarter especially his investors were legion. Demands Jury Trial. Denial that Charles Ponzi. promoter of the postal exchange scheme. which now is in receivership. with claims of millions of dollars against it. is bankrupt, was made in a petition filed in the federal district court today by Daniel V. McIsaacs, his counsel. The petition demands that a trial by jury be ordered to determine the issue. The petition will be assigned for a hearing. but action on it if the court grants the petition will be delayed because the federal jury will not come in until next month. Meantime, the receivers will pursue their efforts to marshal Ponzi's assets. of which about a million dollars' worth was turned over to them by him Saturday to meet claims which a federal auditor estimates at $7,000,000. Officials of the bankruptcy court here said today that should - a jury find that Ponzi was not a bankrupt as alleged in the petition which was the basis for the appointment of the receivers, the receivership probably would be vacated and be without standing. List Brings Denial. The appearance of the list today brought denials from many of those whose names appeared. Some of those named, however, said they had regained their investments with profits of hundreds of thousands of dollars. The investments noted ranged from $25 to $53,833, the latter being attributed to a man associated with Ponzi as an agent. The financial operations of the Old Colony Foreign Exchange Company, headed by Charles M. Brightwell, with the Longton Oil and Gas System, Inc., of which he also was president, will be one of the subjects which John E. Hannigan, receiver of the first named company, will investigate. The activities of the Old Colony Foreign Exchange Company were curtailed during the investigation of Charles Ponzi's affairs after several hundred thousand dollars had been received from investors who were lured by the promise of "100 per cent in six months.' Mr. Hannigan said today that he would appoint an auditor to examine the Old Colony Foreign Exchange Company's books and determine whether transfers of money had been made to other companies in which the company's officers were interested. Three of those officers, President Brightwell. Ramond Meyers and Fred Meyers are still in jail, held on charges of larceny in default of $50,000 bonds each.

12. August 26, 1920 New-York Tribune New York, NY
Article from New-York Tribune, August 26, 1920

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Ponzi's Manager Offers To Turn Over $10,000 Financier Gives Receivers Keys to Numerous Boxes in Safe Deposit aults BOSTON, Aug. 25.-Robert do Masellis, who for two months acted as general manager for Charles Ponzi, voluntarily offered to-day to turn over to the receivers of the Securities Exchange Company a fund of $10,000 which Ponzi had placed in trust for him, Attorney General Allen announced to-night. He also made to the Attorney General a complete statement of his relations with the bankrupt financier. He protested ignorance of Ponzi's business methods. Ponzi turned over the keys of his numerous boxes in safe deposit vaults to the receivers and they began taking an inventory of their contents in an effort to uncover more of his assets. The total of notes held by depositors of Ponzi received at the Attorney General's office to date amounts to $4,958,760. It is expected the receivers' hearing will be resumed Friday. The Old Colony Foreign Exchange Company, which, imitating the methods of Ponzi, promised 100 per cent profits in six months, took in $346,503 in its seventeen days of operation before the authorities closed its doors. John E. Hannigan, receiver of the company, has been able to locate only $154,000 of assets and thinks he has a clew to $20,000 additional, leaving approximately half of the money taken in unaccounted for.