This is an I-Heart podcast.

And we return to our American stories.

Up next, the story of the man who lent his name to a scheme you may well know,

but the man you don't. We're talking about Charles Ponzi. Here to tell the story is John Small,

the man behind the podcast right about now. Take it away, John. A Ponzi scheme is an investment scheme where all the

returns are paid to earlier investors using the money that was contributed by newer investors.

So basically what you do is you pay the investors of your Ponzi scheme with the money from the new investors.

So it's a constant cycle. You have to keep on getting new investors in and the money that

the new investors put in you use to pay your old investors. Ponzi schemes have been around forever,

but they weren't really called Ponzi schemes until Charles Ponzi came around, probably

much to his disappointment.

He was actually born Carlo.

He was a poor Italian immigrant, and he came from like a working class family, but he always had a chip on his

shoulder about being not as rich as he thought he should be and he always thought he was much

richer than he actually was. When he turned 18, he got in his head that he wanted to go to America

because at that time Italians were hearing that America, like the streets were paved with gold.

This is a time of great prosperity in America and not so much prosperity in Italy.

And so his parents raised enough money, $200 for him to take a boat to Boston.

He was supposed to have some spending cash.

But being Charles Ponzi, he basically gambled all that spending

cash away on the boat, lost everything. So when he arrived, he was a penniless Italian immigrant,

and he spent many years traveling up and down the coast of America doing all sorts of odd jobs.

...