The Ponzi Scheme and Mental IllnessDecember 26, 1919 Charles Ponzi borrowed $200 to buy office furniture. In January 1920, he then began explaining to the people of Boston how he could buy stamps and sell them overseas and give them a 50% return on their investment in 45 days and a 100% return in just 90 days. People came so quickly that he was able to pay a 100% return in just 45 days. The news spread quickly and more and more investors came. Soon Charles had two offices and hired people to take orders for stamps. Soon after, Charles was earning up to $1 million a week, Charles reportedly said. “A huge line of investors, four abreast, stretched from the city hall annex... to my office!... Hope and greed could be seen on the face of each. thousands of outstretched fists! Madness, money madness, was reflected in everyone's eyes. To the gathered crowd, I was their dream come true. (SSA, 2008) There was a problem. Profits from stamps were tiny. Only a fraction of a cent represented the return on these stamps. So where did all these profits come from? Investors who invested early received payments from later investors. The scam began on December 26, 1919, and on July 26, 1920, the Massachusetts district attorney shut down the scam. 7 months was enough to turn a $200 loan into $10 million. After news of the scam got out, people started demanding their money back. It claimed it could repay investors at face value and unmatured stamps at a reduced rate. Ponzi continued to pay investors from July 26 to August 13...... middle of paper...... people lose money and make money. Markopollos allegedly found 29 red flags that reveal Madoff's Ponzi. Works Cited Bach, S. (1985). Narcissistic states and therapeutic process. New York and London: Jason Aronson.M.Currie, SM (2009). Handbook of frauds, scams and scams. London and New York: Taylor and Francis Group. Sanders, P. (2009). Madoff. Guilford, Conn.: The Lions Press.SSA. (December 24, 2008). aechive.org. Retrieved July 13, 2010 from ssa.gov/history: http://web.archive.org/web/20041001-20051231re_/http://www.ssa.gov/history/ponzi.htmlstaff, MC (2009, NOV 19 ). narcissistic personality disorder. Retrieved July 21, 2010, from MayoClinic.com: http://www.mayoclinic.com/health/narcissistic-personality-disorder/DS00652/DSECTION=symptoms Zuckoff, M. (2005). Ponzi's Scheme, the story of a financial legend. New York: Random House.