Riches to rags: how legendary fraud Charles Ponzi's schemes crumbled.

• Author: Koerner, Brendan I.

Ponzi's Scheme: The True Story of a Financial Legend

By Mitchell Zuckoff

Random House, $25.95

A successful scam consists of two essential parts: the fraud and the getaway. An ill-gotten fortune, no matter how spectacular, isn't very useful if it can only be spent on cigarettes and candy bars at the prison commissary. So a competent con artist will figure out from square one not only how to part the suckers from their cash, but also how to disappear when the inevitable end becomes imminent.

Casual fans of flim-flam history are already aware that Charles Ponzi, whose surname is now synonymous with "pyramid scheme," couldn't dodge the law when his financial house of cards collapsed in 1920. The pint-sized immigrant from Lugo, Italy, born Carlos Pietro Giovanni Gugliemlo Tebaldo Ponzi, never went on the lain, nor did he try to hide his fortune from investigators. He was incarcerated then deported, and spent his final years living in penury in Brazil, dying with $75 in his bank account. Hardly a post-scare resume worthy of the Hucksters Hall of Fame.

It's easy to interpret Ponzi's failure to abscond with the loot as an indicator that he was only half a scammer--excellent at the fraud part of the equation, but not so strong on the endgame. But Mitchell Zuckoff offers a different take in the terrific Ponzi's Scheme: The True Story of a Financial Legend, portraying the man as more delusional than criminal. His Ponzi never fled because, like Enron's Kenneth Lay or WorldCom's Bernard Ebbers, he somehow convinced himself that he could forestall the day of reckoning long enough to make a buck for his investors. His real sin was similar to that of so many failed CEOs of the past few years: Ponzi bought into his own spiel and decided that words were more important than facts.

The whole tale seems ludicrous to modern readers, given our day-to-day familiarity with real-estate infomercials and emails promising a slice of Mobutu Sese Seko's riches. We're trained to be wary of too-good-to-be-true offers--a company peddling mortgage rates of 3 percent is obviously not on the up-and-up. Bostonians in 1920, alas, weren't quite as sharp when it came to separating opportunity from swindle. This was the era in which, much like the mid-to-late 1990s, securities speculation seemed the road to wealth for Everyman, and federal regulation was still virtually non-existent. Ponzi did especially well by targeting people like himself, immigrants and blue-collar sorts who...