Charles Ponzi promised to double your money in 90 days

In 1920, Boston was gripped by a man who seemed to have broken finance. While banks paid about 5% a year, Charles Ponzi offered 50% in 45 days — or a full 100%, doubling your money, in 90 days. Crowds lined up to hand him cash.

The supposed engine was the international postal reply coupon, a voucher that let a sender prepay return postage abroad. After the war, exchange rates had warped so much that a coupon bought cheaply in a weak-currency country could, in theory, be redeemed in the United States for stamps worth far more. Buy low in Italy, redeem high in America, pocket the spread.

The mechanism was real. The scale was a fantasy.

Redeeming coupons in the millions was logistically impossible, and Ponzi never actually did it. He was simply taking money from new investors to pay the earlier ones — borrowing from Peter to pay Paul. Early backers really did get their fat returns, which is exactly what kept the line growing.

The Boston Post began investigating in the summer of 1920, triggering a panic as investors rushed to withdraw. Auditors found Ponzi holding only a trivial stock of actual coupons. He was charged with mail fraud, served years in prison, and was eventually deported.

His name became the permanent label for a scheme that pays returns out of fresh deposits — a con as old as money itself.