For the first time, ever, the public will have a chance to purchase the house that briefly belonged to the man whose last name came to epitomize the devastating financial weapon that has since become a household name. The Lexington, Massachusetts house that once belonged to Charles Ponzi before his arrest on mail fraud charges is now publicly listed for sale to the public - at a price of $3.3 million. Ironically, Ponzi's initial purchase of the property was conditioned on the requirement that the seller invest with Ponzi's Securities Exchange Company.
Originally built in 1913, the House was styled as a colonial revival mansion, featuring 16 rooms, a carriage house, and even a sunlight-illuminated conservatory. Its first owner, Richard Engstrom, was a prominent industrialist who spent an estimated $50,000 to build the house - an amount equal to nearly $1.2 million today when adjusted for inflation.
The house soon went on the market, and Ponzi reportedly took a keen interest. After originally offering $25,000 for the house, Ponzi ultimately agreed to pay $39,000, paying $9,000 in cash and supplying the remainder with a "postal reply coupon" that Ponzi assured the seller would soon be worth $30,000. Ponzi's Securities Exchange Company had been wildly successful, taking in over $250,000 per day at its peak.
However, Ponzi's purchase of the House came at a time when suspicions were mounting by authorities and journalists. Increasing skepticism ultimately culminated in a front-page expose by the Boston Post (a newspaper that had previously published a glowing review that prompted a mass of new investors) and Ponzi's surrender the following day to federal authorities on mail fraud charges. Ultimately, Ponzi's investors lost nearly everything, ultimately recovering less than 30% of total losses, which amounted to $20 million in 1920 ($225 million today).
After Ponzi's company was placed into bankruptcy, the house was eventually sold.
A photo gallery of the house is featured here.
For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
For more information about LexisNexis products and solutions connect with us through our corporate site.