An Investigation
All the stories and activity surrounding Charles Ponzi raised the suspicions of the Massachusetts Bank Commissioner, Joseph Allen. He was concerned that Boston’s entire banking system could be damaged, or even destroyed if Ponzi’s reserves became exhausted by further large-scale withdrawals. He launched an investigation that soon uncovered $250,000 in loans taken from the Hanover Trust, a bank that was effectively controlled by Ponzi himself.
Joseph Allen ordered for Ponzi’s accounts to be watched and his finances to be investigated. On August 9, 1920, the state-ordered audit into the Securities Exchange Company was completed. It concluded that Charles Ponzi was in debt to the tune of $7 million – over $90 million in modern money.
