You’ve heard the expression that it’s not ethical to speak ill of the dead; however, what if that dead person was a total scoundrel? I’m speaking of financial scammer Bernie Madoff, who passed away in prison last week. Madoff was one of the most prolific scammers in American financial history; his chicanery literally cost people near-billions of dollars.

And yet, most news editors, print and electronic, used another name to describe Madoff’s thievery: a “Ponzi scheme.” In short, a man from over a century ago who pulled off a financial scam which earned far, far less than Madoff’s continues to be the go-to guy in the Anglo-American media.

Who exactly was Ponzi?

Born in Lugo, Italy (in Emilia Romagna) on March 3rd, 1882, Carlo Pietro Giovannini Guglielmo Tebaldo Ponzi (pictured) arrived in Boston on November 15th 1903 on the ship S.S. Vancouver. Unlike most Italian immigrants at the time, Ponzi was much better off financially. He previously spent four uneventful years at the University of Rome La Sapienza. His trek to America seemed motivated more by a sense of adventure rather than la miseria.

Arriving with only $2.50 in his pocket – he allegedly gambled away a huge chunk of his travel money during the boat ride – Ponzi first settled in Boston, where he mastered English and worked as a waiter. In an example of things to come, he was fired a few years later when caught fleecing many of the diners. Ponzi then took off for Montreal in 1907, where his experience working with a corrupt Italian banker, Luigi Zarossi, seemed to whet his appetite for even more sophisticated forms of conmanship.

When Zarossi eventually fled to Mexico to escape authorities, Ponzi initially stayed on to help Zarossi’s heart-broken relatives. It was only a short time after that when, either through desperation or sheer devil-may-care effrontery, Ponzi forged one of the bank manager’s signatures on a large check.  He was soon caught by Canadian authorities and spent the next few years in prison – during which time Ponzi conned his own mother, telling her in a letter that he had a job as a “special assistant” to a prison warden.

In 1911, Ponzi made his way to Boston again, was caught in an illegal immigrant smuggling operation, served more time in prison, and married a local Italian woman, Rose Gnecco, upon his release (never telling her about his past, of course). And in 1918, Ponzi began the ruse that would forever enshrine his name in U.S financial history.

In a nutshell, Ponzi took advantage of inflation after World War I to mail postal reply coupons back and forth between Italy and America, the decreased value of which allowed him to buy them cheaply overseas but sell them for a bigger profit in the U.S. On the surface, this wasn’t a real crime. It was when Ponzi began corralling investors with promises of instant big returns, however, that this pyramid scheme became a shaky deck of cards.

Things came crashing down when a series of articles in the Boston Post came out in July 1920, questioning Ponzi’s amazingly high returns. A bit of a showman who enjoyed the media spotlight (shades of Al Capone), Ponzi had a hard time sustaining his popularity when later articles revealed his past con jobs and prison convictions. The fact that it took three trials to convict him added to his reputation as a slick operator.

Convicted of mail fraud in 1922, Ponzi, while out on bond, high-tailed it to Florida, where – incredibly – he began another swindle, this one involving real estate. He was caught and convicted of that in 1926, was freed after posting bond, and then tried to pull off one last con job:  an escape.  Disguising himself, Ponzi tried to sneak on to a merchant ship but was quickly caught and sent back to Massachusetts to serve out his original term.

After his release in 1934, Ponzi, a non-citizen, was finally deported back to Italy, where he briefly worked for the Italian government (and allegedly pocketed money from the Fascist regime’s treasury!) before moving to Rio de Janiero, Brazil a few years later, where he died in near-poverty in 1948.

So why “Ponzi scheme?” Easy: Anglo-American prejudice. Note the time period: During World War I, thousands of Italian immigrants were summarily thrown out of the country during the U.S. government’s infamous Palmer Raids, aimed at ridding the nation of so-called anarchists. This same animus toward Italians carried over to a pair of fellow Italian Americans in Boston during the same era: the socialists Luigi Sacco and Bartolomeo Vanzetti, who were executed in 1927 after a kangaroo trial.

As it turns out, there were others who were far more adept at screwing the system, even at the time.

One of Ponzi’s earliest mentors was Charles W. Morse, a Wall Street financial scammer with whom he once shared a jail cell. Certainly, as a native-born American, Morse knew the ins-and-outs of the U.S. financial system better than the immigrant Ponzi and passed along some insight.

And in 1930, only a few years after Ponzi’s conviction, Bernard Marcus and Saul Singer, who ran the Bank of the United States (BUS), fleeced innocent depositors out of millions and caused the collapse of the bank.

And then, to top them all, along came Bernie Madoff in the 1990s.

Yet, the name “Ponzi,” along with other terms or names associated with Italic culture (Machiavelli, Capone, godfather, family, and soprano), continues to be the gold standard for shadiness. If our nation can now objectively “re-assess” public statues and historical figures, why not do the same for Madoff vs. Ponzi?  -BDC