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Quick answers
What did Charles Ponzi claim to be doing?
He told investors that profits would come from buying and redeeming International Reply Coupons across borders. Investigators in 1920 showed that coupon issuance could not support the money he was taking.
When did the scheme collapse?
Public unraveling came in July-August 1920 as the Boston Post published its investigation and investors sought redemptions. Ponzi surrendered to authorities in August 1920.
What was he convicted of?
He pleaded guilty to federal mail fraud in 1920. Massachusetts later convicted him of larceny after a 1922 mistrial and a 1925 guilty verdict. He served federal then state time.
How much money was involved?
Contemporary estimates commonly cite about $15-20 million in 1920 dollars of liabilities or take, with tens of thousands of note-holders. The figure is not comparable, unadjusted, to late-twentieth-century cases.
Did the Boston Post really break the case?
The Post's July-August 1920 reporting, using Barron and postal facts, is the investigation the Pulitzer board later honored. State and federal officers were already looking; the newspaper made the arithmetic public.
Was this the first such fraud?
No. Earlier promoters had paid old investors with new money. The 1920 Boston collapse is the namesake event in English, not the first instance in history.
The public investigation is a newspaper campaign plus parallel state and federal process. It begins when the books are already large.
This page records those steps. It does not explain how to structure a note program or how to delay a run.
Agencies
- Boston Post — Published the 1920 investigation that made coupon-market arithmetic a public fact and received the 1921 Pulitzer for public service.
- U.S. Attorney (District of Massachusetts) — Brought the federal mail-fraud case that ended in the November 1920 guilty plea.
- Massachusetts state prosecutors — Pursued larceny, enduring a 1922 mistrial and obtaining a 1925 conviction.
- Postal inspectors — Federal postal officers examined the use of the mails in connection with the notes and the coupon story.
What followed
- Press inquiries
Reporters asked how coupon volume could support the advertised returns and sought official postal figures.
- Barron analysis
A finance publisher supplied a market-size comparison the Post could print.
- Publication and run
July-August 1920 articles and investor redemptions arrived together; the office could not meet a full withdrawal.
- Surrender
Ponzi surrendered in August 1920 as state and federal officers took control of the story.
- Federal plea
Mail-fraud charges were resolved by a November 1920 guilty plea and a five-year sentence.
- State retrial
After a hung jury in 1922, Massachusetts obtained a 1925 larceny conviction.
Turning points
- The coupon-volume articles — Once the Post printed that the instrument's market was too small, the promotional story could not be a private dispute.
- The August 1920 surrender — The criminal case acquired a defendant in custody; the rest was charging theory and trial.
- The 1925 state verdict — Federal time alone would have ended sooner. The larceny conviction extended custody and sealed the Massachusetts record.
Investigators in 1920 were explaining a collapse in public view. The method they used was comparison of a real market with a set of notes -- not a secret forensic trick.
Public-record encyclopedia. Not legal advice. Not a how-to. Graphic detail is withheld. Wars belong in a separate atlas.