Word: ponzi
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...1920s, state officials have uncovered what could be the biggest and most Byzantine fraud of them all. As many as 80,000 investors and buyers of lots may have been bilked of $1 billion by development companies and mortgage brokers in Southern Florida. According to investigators, the Ponzi-like scheme worked this way: the developers bought nearly worthless tracts of land, subdivided them and sold homesites at inflated prices; they used the proceeds to pay high interest on bogus notes sold to investors under a false claim that the notes were secured by first mortgages on the homesites. When...
...Home-Stake's victims were putting in money that they would otherwise pay out in taxes. Trippet for a while surprised them by paying handsome dividends, so many upped the ante, investing more than they would have for tax purposes. Apparently, Trippet did it by running a Ponzi scheme, a type of swindle named for Charles Ponzi, a conman who used it to shake more than $10 million out of the citizens of Boston in 1919 and 1920. The principle is simple: the first group of investors are paid dividends out of the money contributed by newer investors. Eventually...
Compared with that, Charles Ponzi, Lowell Birrell, Eddie Gilbert and Billie Sol Estes were pikers. Only Ivar Kreuger, the Swedish match king who in the 1920s defrauded investors of $500 million, ever topped Tino. More than that, De Angelis presents the classic example of how a man can exploit a complicated situation and use the credulity of high financiers for tremendous gain...
Last week Commercial Solvents had its own say before the House Subcommittee on Inter-Governmental Relations. Witness Maynard C. Wheeler, the company's president, clearly wished he had never heard of Billie Sol Estes. But he stoutly insisted the Commercial Solvents' relationship with the Pecos Ponzi had been that of "company and supplier, and no more...
...cotton manipulations. Dated Oct. 27, 1961, the 140-page document clearly warned that Estes was a sleight-of-hand wheeler-dealer. Yet, three weeks after the report was submitted, Secretary of Agriculture Orville Freeman confirmed Estes' appointment to the National Cotton Advisory Committee, and the Pecos Ponzi was not arrested until last March. Items in the report...