Charles Ponzi could be described as a clever businessman, or a ruthless cheater, depending upon how you look at him. I view him primarily as a charismatic leader who was able to convince people to give him large sums of money, even when they did not understand his investment scheme.

After an unremarkable professional life and a stint in prison, Mr. Ponzi devised a scheme utilizing .postal reply coupons. in the early 1900s. These coupons were included with letters to family, and the family could redeem the coupon at the post office for postage on a return letter. Mr. Ponzi.s scheme seemed simple: trade international postal reply coupons to turn a profit.

James Lewis Jr., the operator of one of the largest Ponzi schemes in U.S. history was sentenced to 30 years in prison last week. That was the maximum sentence that could be imposed. He was also ordered to pay $156 million in restitution.

The sentence comes after a guilty plea to one count of money laundering and one count of mail fraud. 12 charges were dropped in exchange for the guilty pleas on these two counts.

The Ponzi scheme lasted for almost 20 years, and took in $311 million. Lewis represented to investors that he was earnings returns of 18% to 40% by investing in leased medical equipment, financing medical insurance, making commercial loans, and buying and selling troubled businesses.

In reality, Lewis was using money from new investors to pay of old investors, the classic Ponzi scheme. Some investors received money back from the scam, leaving a loss of $156 million for the later investors.

Leslie John Hamilton was sentenced to 30 years in prison for masterminding a pyramid scheme that he claimed was an investment in rare coins. The scheme involved over 300 victims, who lost more than $10 million.

Hamilton was convicted by a federal jury on 28 counts of mail fraud and wire fraud, after representing himself as a master coin grader. He claimed that he bought coins below market value, and then resold them for a profit. Investors were promised returns of 8% to 150%. In reality, investors were paid “returns” on their money via collections from new investors, typical of a traditional Ponzi scheme.

The fraudster continues to claim that he is not guilty, and is the target of a government conspiracy.

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