Prologue
June 1921
Major League Baseball and Charles Ponzi announce the First-Ever Global Sports League–Postal Coupon Exchange Partnership.
Baseball’s Chief Revenue Officer says that baseball is glad to get in on the early stages of Ponzi’s incredible growth.
Umpires become brand advertisers.
“Ponzi,” their uniforms say, in big letters.
Preface
On the heels of its meteoric rise as a crypto exchange, FTX quickly began to spend extraordinary amounts of money to buy prestige and friends in high places.
Sam Bankman-Fried used the money he stole from customers to pay a broad swath of the American establishment to advertise his scheme, to whitewash his reputation, and to ward off regulation. He paid PR firms, political consultants, law firms, lobbyists, think tanks, trade groups, corporations, publications, universities, sports teams, and celebrities.
The Intercept, when writing about the size and reach of the influence campaign, must include a disclaimer: Bankman-Fried gave them half a million dollars.
Charles Ponzi ran a smaller influence campaign. He bought a Boston bank as cover. He gave money to a couple Boston charities. He got one positive write-up in the Boston Post.
What if Charles Ponzi's reputational whitewashing had been at Bankman-Fried levels?
What if, say, retired politicians William Gladstone and Teddy Roosevelt had fallen for the Ponzi con, like Tony Blair and Bill Clinton have been conned by Bankman-Fried today?
This is a timeline of imagined historical correspondence.
Charles Ponzi’s scheme collapsed in August 1920. For convenience, the dates here are Bankman-Fried's, shifted back a hundred years.
Timeline
1917
Charles Ponzi starts a scheme of robbing Peter to pay Paul, under the thin cover that he is making money by trading in postal coupons.
The capital firm J.P. Morgan & Co. buys in early.
Circa 1921
Ponzi is hopelessly indebted. He is part of a web of Ponzi schemes, that all both borrow from and loan to each other. To get out of the financial hole, he has made risky bets that failed, putting him in the hole more.
Ponzi launches a massive advertising, reputational, and political influence campaign, to delay the eventual collapse.
July 1921
A spokesman for the nativist National Security League tells the Senate Finance Committee that to stay competitive with China, the United States must support entrepreneurial activities in the postal coupon trading industry. Ponzi is a funder of the League, and a member of its postal coupon task force.
August 1921
Radio and print business publicist A. Newton Plummer agrees to shill for Ponzi, accepting postal coupons as pay.
After the collapse, his coupons now valueless, Plummer will say that he’d still back another of Ponzi’s schemes.
In a First-Ever Collegiate Postal Coupon Naming-Rights Sponsorship, California Memorial Stadium, scheduled to open in 1923, will be renamed Ponzi Field. The University of California takes postal coupons as payment.
September 1921
Football hero Jimmy Conzelman and his wife Peggy Udel, a Ziegfeld Follies performer, do radio spots for Ponzi. They encourage their listeners to quit their jobs and buy postal coupons.
Conzelman will lose much of his fortune to Ponzi’s scheme.
Sotheby’s auctions off postal coupons entitling the bearer to a cartoon monkey. In an insider price manipulation scheme, Charles Ponzi wins the cartoon monkeys at a wildly inflated price.
October 1921
The Mercedes Racing Team names Charles Ponzi as their Official Postal Coupon Trading Partner. The partnership will sell postal coupons entitling the bearer to an image of a Mercedes.
Late 1921 and Early-to-Mid 1922
Ponzi enlists
- A baseball star,
- A basketball star,
- A basketball star,
- A former basketball star, and
- A tennis star,
as shills for his scheme.
Glowing portraits of Charles Ponzi are printed in
- The new magazine Forbes: Doers and Doings,
- The Wall Street Journal,
- The New York Times, by a reporter who is impressed that Ponzi does not wear pants,
- A business newspaper owned by a millionaire,
- A magazine very much like what Fortune will be, when it starts up just in time for the 1929 stock market crash, and
- That same Fortune-like magazine again.
Ponzi pays bribes to
- President Woodrow Wilson,
- One third of the Senate, and
- One third of the House.
The bribes are to support a bill, in the Senate Agricultural Committee, that would
- Allow the Chicago Butter and Egg Board to become the Chicago Board of Butter, Eggs, and Postal Coupons; and
- By likening trading in postal coupons to trading in butter and eggs, reduce the possibility of his misuse of postal coupons being prosecuted as mail fraud.
January 1922
Vaudeville comedian Frank Fay, as his arrogant S.O.B. stage persona, does a radio spot for Ponzi. The spot mocks anyone who would miss out on Ponzi’s scheme.
A radio promo calls Ponzi the most generous millionaire in the world, and tells listeners that Ponzi drives a T Model Ford, rather than a more expensive automobile.
February 1922
Leaders of the Senate Agricultural Committee invite Ponzi to make a sales pitch to them.
March 1922
Hialeah Racetrack becomes Ponzi Racetrack.
April 1922
Ponzi gives a radio interview. He is asked how he makes his money.
His answer, about putting money in a box, and then taking more money out of the box, stuns the interviewer.
“You are saying, sir, that you are in the Ponzi business, and that the business is good,” the interviewer says.
It’s a reasonable take to say I am in the Ponzi business, Ponzi says.
Three days later, William Gladstone and Teddy Roosevelt get on a stage with him. They are paid for the appearance with stolen money.
May 1922
Charles Ponzi tries a price manipulation scheme on a $1 postal coupon printed up by a Korean gangster. The price manipulation triggers a market panic.
As the value of the $1 coupon is collapsing to $0, Ponzi makes a sales pitch to the House Agricultural Committee.
Ponzi hires a stylish flapper, heir to the Remington Arms fortune, as his Head of Global Luxury Partnerships. She will target major luxury brands that have yet to integrate with postal coupons.
She wears a custom-made necklace that says “Ponzi” to the biggest society ball of the season.
September 1922
Charles Ponzi makes a pitch for more money from J.P. Morgan & Co. He works on a crossword puzzle while making the pitch.
J.P. Morgan is wowed by this.
Morgan is especially impressed by Ponzi's vision of being able to use postal coupons to buy a banana.
November 1922
Ponzi’s scheme collapses.
Epilogue
November 2022
The actor and director, Count Erich Hans Oswald Maria von Stroheim und Nordenwall, with Sam Bankman-Fried’s financial support, is elected to the U.S. House of Representatives.