Word spread quickly about the financial “wizard” who was making people rich quick.
Ponzi sweetened his original offer, and was now promising 50% returns in 45, not 90, days.
Ponzi sold his ‘big idea’ to investors by the thousands. It was a Ponzi frenzy. In the end, more than 40,000 people put their trust and money into the little Italian recidivist criminal.
Ponzi hired agents and paid them handsome commissions. Offices were opened in several states. Between February and August of 1920, Ponzi made millions. He and Rosa lived as royals.
When pressed for specifics about his impressive returns, Ponzi explained it was a proprietary secret. He did say he had a network of agents around Europe buying up the coupons, but would not give any more detail.
“My secret is how to cash the coupons. I do not tell it to anyone,” he said. “Let the United States find it out, if it can.”
Ponzi suggested high-level foreign government contacts helped him acquire the European coupons. He explained that the foreign governments from whom he bought coupons profited themselves, and so “naturally would not care to reveal the exact nature” of their business with Ponzi, he explained with an assuring smile.
People mortgaged homes, invested life savings to give to Ponzi. Many who were paid, reinvested right away with Ponzi.