On July 7, 1988, Alexander Pandis, a young man with a weight problem and a ready smile, entered a plea agreement in U.S. District Court. “Fraud charges clip high roller,” said the headlines, “Con man tells luxury life, fraud.”
In a matter of months, Ponzi had become one of the best-known men in Boston. He was said to own 200 suits and two dozen diamond stickpins. He arrived at work in a limousine driven by a Japanese chauffeur. He oozed confidence and goodwill. He announced plans to build an Italian hospital and to give $100,000 to a local orphanage. He was kind to elderly women, pulling them out of the queue outside his office and taking them through a back door to the front of the line. The common man in the North End saw him as a genius, a benevolent wizard. The wizard himself talked of running for mayor. And all the while, his 16 clerks kept on sorting the incoming cash, piling it in closets, desk drawers, even wastebaskets.
Ponzi’s empire collapsed. His secret investment method was exposed, and it proved to be desperately simple: he was paying off old investors with the money of new investors, borrowing daily from Peter merely to pay Paul. Like modern-day chain letters, the scheme was doomed from the start: it would collapse as soon as there were no new investors, as soon as Ponzi ran out of Peters, which Ponzi did the instant state and federal authorities shut him down. In August 1920, a preliminary audit determined that the Securities and Exchange Company had liabilities of $6.9 million and assets of only $2 million. Later accounts reported that Ponzi had taken in $15 million, more than half of which could not be accounted for. His last investors received 12 cents on the dollar.
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She happened to be in the now-defunct Paradise Inn one night in the fall of 1985 because she had been recruited by that impresario to appear in a “South American Night” revue. Late in the evening, an elegantly dressed young man came up, said she looked a little bewildered–so elegant a lady in such a saloon–and offered to buy her a drink. Flynn was indeed bewildered–she had been recruited to perform, but she was never called to the stage–and she ordered a 7-Up. She recalls that the nice young man introduced himself as Alex Pandis and said that he played the harp, that he had just finished his final performance with the Chicago Symphony, and that he had received a standing ovation.
He was thoughtful in other ways as well. He took three rings of hers, worth over $4,500, and sent them out to be polished. Her mink coat disappeared; lo, he had sent it to Russia, where a sable coat was being made for her at the cost of $250,000; the Russian tailors needed the mink for measurements, and it was due in September.
He said he realized that she had been through a lot for him. When he entered negotiations to sell an interest in his company to the father of a friend, he said he would add a bonus to Rena’s investment in recognition of her patience. He told her he would pay her $200,000. He said he should never have borrowed money from her in the first place. Perhaps he would pay her $300,000.
