When Carlo was a few months old, the family moved south to Rome, but then returned to the north and settled in Parma, a prosperous city halfway between Milan and Bologna, where both Oreste and Imelde were born. Carlo entered Parma’s public schools at age five, but when he was ten his parents decided it was time to begin preparing him for the professional life they had mapped out. Oreste and Imelde sent young Carlo to a prestigious private boarding school founded under the auspices of Napoleon’s second wife, Princess Marie-Louise, who had ruled the province for thirty years in the early nineteenth century. Ponzi impressed the nuns who taught him, learning to speak fluent French and generally winning good grades. His chief regret was that although the school was not far from his home, he could visit his parents only on occasional weekends and holidays. His loneliness increased when his father died while he was away.
A modest inheritance from his father, supplemented by some money left to him by an aunt, allowed Ponzi to chase his mother’s dreams and attend college. If he invested carefully and budgeted wisely, his inheritance would be just enough to cover tuition and living expenses. To his mother’s delight, he earned acceptance to the University of Rome, the city’s oldest university, founded six centuries earlier in the name of “La Sapienza,” or wisdom. But five hundred miles from home, free from the control of boarding school nuns, Ponzi had other pursuits in mind. He identified with the stories his mother had told of their aristocratic blood, and he gravitated toward a group of wealthy students who lived la dolce vita. Ponzi did everything he could to emulate them, adopting their manners and especially their spending habits. Their funds seemed limitless, so he dug ever deeper into his fast-dwindling inheritance to dress in the latest European fashions and pick up restaurant tabs for his friends and the pretty girls they met.
His rich friends considered the university a four-year vacation, and so Ponzi acted as though he could, too. He skipped classes, preferring to sleep away his days. At dusk he roused himself from his boardinghouse bed and roamed the city’s fashionable neighborhoods, carousing in cafés, attending the theater, and refining his taste for opera. At midnight he joined the gamblers and thieves in the casinos of Rome’s underground. Young, naive, half-drunk, and reckless with money, Ponzi made an appealing mark. At dawn he would trudge to his rooms to sleep, and then the cycle would begin again. Throughout, he assured his mother he was hard at work, making her proud. But the good times could not last. The combination of an exhausted bank account and a thorough disregard for classes killed any chance he had for a degree. Ponzi looked himself over and made a brutally honest self-assessment: He had become a fop. Worse, an impoverished fop. The easy accessibility of money had spoiled him. He had no choice but to leave Rome.
Before he died, Oreste Ponzi had enlisted one of young Carlo’s uncles to watch over him. Now, the uncle suggested that the twenty-one-year-old college washout find a job, perhaps as an entry-level clerk. Carlo flatly refused. He considered himself a gentleman, a member of the elite class of his Roman friends. Taking a mundane job would be beneath him. Humiliating, even. The thought of physical labor was not even discussed. Ponzi considered himself a mollycoddle, and no one disagreed. The uncle tried a different tack: “Poor, uneducated Italian boys go to America and make lots of money,” the uncle said. “You have a good education, you are refined and of a good family. You should be able to make a fortune in America easily.” Then Ponzi’s uncle spoke the magic words that were luring millions of Europeans across the ocean: “In the United States,” he said, “the streets are actually paved with gold. All you have to do is stoop and pick it up.”
Ponzi knew his mother was disappointed by his Roman holiday. He was ashamed that he had misled her and ignored her advice. Going to America and coming home a rich man would make her proud. Even better, it would satisfy his thirst for a life of leisure and hers for a prominent son. Confident that he would soon be the toast of the New World, after which he would return triumphant to Italy, Ponzi accepted his uncle’s suggestion and packed his best clothes. As a send-off, his family provided him with a steamship ticket and two hundred dollars to get established in America and begin collecting his gold. With a blessing from his mother still ringing in his ears, Ponzi went south to Naples. There, on November 3, 1903, he climbed the gangplank of the S.S. Vancouver, bound for Boston.
At 430 feet and five thousand tons, the Vancouver could carry nearly two thousand immigrants on each two-week transatlantic crossing. Most spent about twenty-five dollars for tickets that entitled them to the crowded misery of steerage—an area deep within the bowels of the Vancouver, perhaps seven feet high, as wide as the ship, and about one-third its length. Iron pipes formed small sleeping berths with narrow aisles between them. Most steerage passengers spent the entire journey lying on their berths—outside space for them was severely limited and inevitably located on the worst part of the deck, where the rolling of the ship was most pronounced and the dirt from the smokestack most likely to fall. The food was barely edible, the water often salty, and the only places to eat were shelves or benches alongside the sleeping areas. Toilets were nearby, overused, and poorly ventilated. Within a few days at sea the air in steerage reeked of vomit and waste. Passengers lolled in a seasick stupor on mattresses made from burlap bags filled with seaweed, using life preservers as pillows.
Most of the Vancouver’s passengers were from the south of Italy, which had withered economically since the country’s unification in 1861. They were young laborers like Giuseppe Venditto, who had twelve dollars in his pocket and the address of a cousin in Ohio, and domestic servants like the widow Lauretta Zarella, who boarded the ship with her two teenage daughters, nine dollars, and a plan to join her son in Providence. A few were from Greece, others from Austria and Russia. Several dozen Portuguese boarded when the ship stopped in the Azores. To pass the empty days at sea, they traded rumors of America, thought of their families back home, and wondered what awaited them.
Ponzi had almost nothing to do with them. Not only was he from the ostensibly more cultured north of Italy, he was among the more privileged travelers. He and sixty-four other passengers had paid an extra twenty dollars for more comfortable berths in the Vancouver’s second-class cabins, though he would forever claim he had traveled to America first-class. While the human sardines in steerage suffered, Ponzi spent the passage continuing his college ways, buying drinks and gallantly tipping waiters. Ponzi’s biggest expense was gambling. A cardsharp caught sight of the bushy-tailed young fellow with the ready billfold and invited him for a friendly game. By the time they were through, Ponzi’s two-hundred-dollar stake had been reduced to two dollars and fifty cents, even less than most of the unfortunates in steerage.
The ship entered Boston Harbor on November 17, greeted by a steady drizzle and an icy east wind that whipped the dirty waters into a liquid mountain of whitecaps. The Vancouver’s captain eased the ship to the Dominion Line’s dock in East Boston, where the nearby Splendor Macaroni Company and a fish-glue plant provided the immigrants with their first smells of the new land. Before disembarking, the first- and second-class passengers underwent immigration inspections—only the steerage passengers would be held in quarantine. Ponzi stretched the truth and identified himself to the inspector as a student, but he admitted that he was down to his last few dollars. To gain legal entry into America, he vowed that he was not a polygamist, a cripple, or otherwise infirm, and that he had never been held in prison or a poorhouse.
Having satisfied the inspector, Ponzi strolled jelly-legged down the gangplank wearing his best suit, with spats fastened to his shoes. Despite his nearly empty pockets and his rain-soaked clothes, Ponzi thought he looked “like a million dollars just out of the mint.” He imagined that he cut the figure of a young gentleman from a fine family, perhaps the son of wealthy parents visiting Boston on a pleasure tour before taking his rightful place in Roman society. His excitement ebbed the moment he stepped onto U.S. soil. No gold awaited him. On the ground from the pier to Marginal
Street in the distance was sticky, black mud, an inch deep wherever he stood, stretching as far as he could see. It was certain to ruin his spats.
Having anticipated the possibility that young Carlo would leave the ship broke—he had been stranded before, on much shorter trips—his mother and uncle had provided him with prepaid train fare to Pittsburgh. There he could spend a few days with a distant relative—“some fifth cousin of some third cousin of ours,” Ponzi called him. But even before he reached Pittsburgh two days after landing, Ponzi was feeling tricked. He was hungry to the point of starving, alone, and down to a few coins. He began wishing he had never heard of America. He spoke no English, had no marketable skills, and considered it a source of pride that he had never worked a day in his life.
America did not seem terribly welcoming, either. The trip to Pittsburgh took him through New York, and when he bolted off the train in search of a meal during a stopover he ran smack into the arms of an Irish policeman. Ponzi lacked the language to explain that he was running because he was hungry, not because he had stolen something, and it was only through the intervention of an Italian bootblack that Ponzi avoided a night in jail. Once in Pittsburgh, Ponzi spent only a short time with his relative before finding a bed in an Italian rooming house and beginning a life of hand-to-mouth hardship. He considered writing home for help, but he could not bear the thought of disappointing his mother again. So he set off in the footsteps of millions of immigrants before him.
For the next four years, Ponzi worked as a grocery clerk, a road drummer, a factory hand, and a dishwasher. He repaired sewing machines, pressed shirts, painted signs, sold insurance, and waited tables. He rarely lasted long—sometimes he was fired, sometimes he quit in disgust, and other times he quit to avoid being fired. He rambled up and down the East Coast, staying close to the ocean to ease his homesickness. He cadged meals and slept in parks when he could not afford a bed. One time in New York he saved a bit of money but blew it all on a two-week spree at Coney Island, the beachside amusement park where a young immigrant could forget his troubles on the Steeplechase ride, roam the “Electric Eden” of Luna Park, or chase girls in the dance hall at Stauch’s restaurant. But that was a brief respite. His silken clothes fell to shreds and his years of the good life became a receding memory.
In America, Carlo became Charles, and at times he found it useful to adopt a new last name: Bianchi, or “white,” which fit his fair complexion. English spellings of Italian names were not yet standardized, and he was also known as “Ponsi,” “Ponci,” and “Ponse.” He grew a mustache that sat on his upper lip like a bottlebrush. With the new names and new look came a new language. Soon he was as fluent in English as he was in Italian and French, and with his new tongue he began seeking jobs more suited to his dreams.
In July 1907, he scraped together a few dollars for a train ticket to Montreal, arriving at the magnificent Gare Bonaventure with no baggage and a single dollar in his pocket. Ponzi walked up Rue Saint Jacques, Canada’s Wall Street, past ornate eight- and ten-story bank and insurance buildings that were the skyscrapers of their day. Not two blocks from the train station he saw the sign of an Italian bank, Banco Zarossi. Calling himself Charles Bianchi, he made himself as presentable as possible and walked confidently through the door. Five minutes later he was hired as a clerk. Ponzi/Bianchi was delighted. After four years of menial labor, he finally had a job that complemented his skills and fit his self-image. Never mind that it was just the sort of job he had rejected as beneath him in Italy.
Canada was in the midst of an immigration wave of Italians, many of them brawny young men from the south of Italy who sought jobs in the coal mines of Nova Scotia and clearing forests for the Canada Pacific Railway. Nominally based in Montreal, they would be away from the city for months at a time. They needed a safe place to send their paychecks, but their business held little appeal for the British and Scottish financiers who lorded over Rue Saint Jacques. Banco Zarossi was one of several Montreal banks that had sprung up to fill the void.
The bank’s owner, a jolly man named Luigi “Louis” Zarossi, had formerly been in the cigar business. But as soon as he’d entered the world of finance he’d been intent on beating his competitors. It was a daunting task, largely because another Italian bank, located almost directly across the street, was owned by the notorious Antonio Cordasco, the city’s richest and most powerful padrone. The padrone system of labor bosses was in full flower at the turn of the century in North American cities with large Italian immigrant populations. At its center were native Italians who formed relationships with companies seeking unskilled laborers, then established themselves, sometimes through force, as the men to see for jobs, housing, loans, travel papers, and everything else they could control. Cordasco was that man in Montreal. He ruled an extensive network of agents and subagents in his native country and Canada who kept business humming, workers coming, and cash flowing. At a parade three years before Ponzi’s arrival in Canada, Cordasco had himself fitted with a crown and declared the “King of Montreal’s Italian Workers.”
But Zarossi had an idea. Cordasco’s bank and others catering to immigrants paid depositors 2 percent interest on their accounts. It was a simple system: the banks invested in Italian securities that paid 3 percent, then gave 2 percent to depositors and kept 1 percent for costs and profits. Zarossi announced that he would pay depositors the full 3 percent, plus another 3 percent as a bonus, for an unheard-of 6 percent. Asked how he could do it, Zarossi tapped into the public’s widespread suspicions that greedy bankers paid pennies on the dollar while keeping huge profits for themselves. His largesse was possible, he claimed, because he would share his bank’s earnings more fairly with his depositors. Cordasco was furious. Dubious, too. Cordasco considered it impossible to pay such returns. He kept quiet, but he suspected that Zarossi would be paying one man with another man’s money, an age-old fraud known as “robbing Peter to pay Paul.”
As months passed and business boomed at Banco Zarossi, Ponzi impressed his boss with his intelligence, his easy smile, and his smooth way with customers. Ponzi was especially solicitous of the bank’s female customers, flirting with them and basking in their attention. Even more than the customers, Ponzi liked Zarossi’s pretty seventeen-year-old daughter, Angelina. Soon Ponzi was promoted to bank manager, and it looked as though he was finally making something of himself.
As the promised interest came due, Zarossi needed to find ways to make the relatively exorbitant payments. If he paid his depositors 6 percent through traditional means, he would soon be bankrupt. An alternative, albeit illegal, was staring him in the face: the money immigrant workers sent to their families via the bank. Zarossi began dipping into those funds, knowing it would be weeks or months before word got back to Montreal that the money had never arrived. He would buy more time by claiming he had sent the money and the fault rested with the mails or whoever received the money in Italy. If a depositor raised a stink, the bank would send money from its fresh deposits. Zarossi figured the cycle of finger-pointing and late payments could keep the scheme afloat long enough for him to come up with another way to pay. If that failed, he would have enough time to gather his profits and his family, and flee.
But events moved more quickly than Zarossi had anticipated. Depositors wanted their interest, immigrants demanded to know what had become of the money they’d sent home, and authorities began investigating the bank for embezzlement. In mid-1908, less than a year after Ponzi came to work for him, Zarossi packed a bag full of cash and fled alone to Mexico City. In the aftermath, one employee killed himself, and another, Antonio Salviati, disappeared when authorities accused him of stealing $944.85 from a customer named Francesco Charpaleggio, who had come to the bank to send money to his family in Italy. The suicide and Salviati’s disappearance raised suspicions that the fraud went deeper than Zarossi. Eventually the bank collapsed, costing depositors even more. It was unclear how much Ponzi knew, but as bank manager he made a clear target for investigators.
Yet unlike Salviati, who ran, Ponzi stayed put in Montreal. For several months, though jobless, he watched over Zarossi’s family, which included not just Angelina but three other daughters and Zarossi’s wife. But by August 1908, Ponzi grew tired of domestic life and feared that he might face arrest, deportation, or both. It was time to hit the road. As usual, though, he had spent whatever money he had earned. The twenty-six-year-old Ponzi made a decision he would long regret.
On Saturday morning, August 29, 1908, he went to the offices of a shipping firm called the Canadian Warehousing Company, a client of Banco Zarossi. Ponzi had been there many times before to collect receipts and to handle other business matters. He raised no suspicions when he walked into the empty office of the manager, Damien Fournier. While no one was looking, Ponzi went to Fournier’s desk and found a checkbook from another bank where the company had an account, the French-owned Bank of Hochelaga. Ponzi tore a blank check from the back of the checkbook and left as quickly as he had come.
That afternoon, Ponzi filled out the check in the legitimate-seeming amount of $423.58. He signed it “D. Fournier” and presented it at a branch of the Bank of Hochelaga. He asked the teller for four one-hundred-dollar bills in American currency, but the teller told him that would not be possible. Agitated, Ponzi accepted forty-two ten-dollar bills, three singles, and the rest in coins. Cash in hand, Ponzi left the bank and began outfitting himself for his return to the United States. He went from store to store, buying two suits, an overcoat, a pair of boots, and a watch and chain. He completed the spree with thirty-two dollars’ worth of shirts, collars, cuffs, ties, and suspenders from a men’s clothing store called R. J. Tooke.
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