Ponzi Schemers Who Conned Their Way to the Top

Ponzi schemes, named after Charles Ponzi, is a fraudulent investing scam that pays existing investors with funds obtained from new investors. When the stream of new investors is interrupted, the scheme collapses and hundreds, if not thousands of people are left empty handed. Throughout history, there have been several schemes that have made history for how much they were able to deceive people out of. Let’s find out who they are and how they were able to trick people. 

1. Sarah Howe

After a failed attempt at clairvoyance, Sarah How opened the Ladies’ Deposit Company in 1879 which she marketed as either a safe haven for women or a bank, depending on her client. The “company” which was only for single women, claimed that investing with them would lead to an 80% monthly interest rate. According to Howe, it was to help women become more independent, but she marketed it to women with no power making them less likely to complain. Things began to head downhill when investors could not withdraw their money. Howe claimed that it was to “prevent them from wasting it”, but she was uncovered when the story broke in the Boston Daily Advertiser. She spent three years in jail and when she got out, she started another scheme which earned her $50,000. This time, she took the money and ran.

2. William Miller

William Miller, founder of the Franklin Syndicate promised investors a 10% return every week or a 520% return annually. He claimed to have insider secrets and knew what made companies profitable despite not giving away any details. After getting his friends to invest, they got others to invest and then he advertised his business across the country. It became so popular that people mobbed him at his home for the chance to invest. Miller’s company collapsed when he partnered up with Edward Schlesinger who wanted to be paid in cash and hid it unlike Miller who kept it in his home. By November, he could not meet demands and realizing that he was going to be caught, his lawyer advised him to hide the money in the lawyer’s account. When he received a 10-year sentence, the lawyer kept the money, some $25 million today, only to give Miller’s wife and children $5 a week for their upkeep. 

3. Ron Rewald

From the late 1970s to the early 1980s, Ron Rewald, a successful businessman, “former football player” and holder of several “degrees”, lived a life of luxury in Hawaii. He ran an investment company called Bishop, Baldwin, Rewald, Dillingham & Wong which promised a 20% return on investments. According to him, his company was a sure-thing and despite claiming to have a company with over 150 employees around the world, there was no one but him. In 1983, shortly after people were catching on to him, Rewald attempted to take his life. In total, he’d conned people out of $55 million and was convicted of 94 counts of fraud, perjury and tax evasion. 

4. Ioan Stoica

In the early 1990s in Romania, Ioan Stoica, created a Ponzi scheme that promised investors 800% of its profit. Investors were required to wait 3 months to withdraw their capital, which allowed Stoica time to use payments from new investors to pay the old ones. Although many spent the interest, they did not withdraw their initial deposit and when the news began to spread, Stoica became a household name. It is believed that Stoica made between $1 and $5 billion and when he was exposed as a fraud it led to rioting across the country. He was sentenced to 7 years in prison but only served 2. No one got their money back.

5. Gerald Payne

In the 1990s, Gerald Payne, the founder of Greater Ministries International, conned 18,000 people out of $500 million. It started when he promised members of his church that they could double their money in less than two year and that his program was taken from the Gospel of St. Luke. He also said that the profits each investor made was “up to god”, so any failed investment would mean that they were being punished. The scheme was brought to light when he was accused of selling unregulated securities by the Securities and Exchange Commission. He and his associates were charged with money laundering and fraud. He was eventually sentenced to 27 years imprisonment. 


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