If you have heard of Al Capone and you will understand what I am talking about when I say that it was the Accountants who took on the Mob.

Al Capone was a legendary criminal. He never finished his sixth grade but the man was not stupid. At the age of 26 he became the head of Chicago’s underworld. He gained a stature of an international celebrity because of the odd blend of charm and brutality. In the year 1930, he was the top most wanted man in Chicago.

Chicago in 1920s was facing a lot of brutality and killings. The rival gangs were killing each other and their drive-by shootings became quite common. No one was safe:  neither general people nor public servants. The gangland murders which previously totaled to 16 in  a year, in his rule increased to a massive total of 64.

Al Capone was basically from NY but drifted to the west later on. His career as a gangster started when he was working under the crime leader Johnny Torrio. Johnny was involved in the inner circle of gangsters. After his death, Capone took over and consolidated his criminal career with prostitution, gambling, extortion and liquor racket. He made piles of money from his business ventures, which actually came from the killings and crimes but the case that was handled by his prosecutors make it look like a tax evasion.

He was an astute businessman. He hid most of his illegal earnings and never endorsed a single check in his lifetime. He did not maintain a bank account in his name and therefore conducted all his dealings in cash. After long inquiries and searches, the government was able to find out few people who agreed to testify against him and finally filed a case of tax evasion.

He was ultimately found guilty on that ground and was sentenced to a ten year long imprisonment and one year in Chicago prison. While he was serving his imprisonment Capone contracted Syphilis and brain damage as well. He grew insane after the seventh year due to an infection.

The year 1946 saw the death of Al Capone. His death had quite unexpected effect on the legitimate citizens as well as criminals. They began paying IRS for their back taxes. A grand total of $1million was deposited in the name of unpaid tax-fillings and this amount was just double the amount the previous year’s total.

It was only through the ingenuity of the accountants that a dangerous criminal like Al Capone was arrested. And it is also because of the hard work put in by these Accountants that the common people re-established their belief in the government.

A Ponzi Scheme essentially works as long as new investors are investing into the scheme. This in turn propels the continuous returns to the earlier or older investors. Thus, as and when, with time, the new investors stop investing in the scheme, the entire house of cards will collapse automatically. These sorts of investment plans are short-term scams that aid a company to attract or lure fresh and new investors, who invest their money and thus help with unusually consistent and abnormally high returns to the earlier investors. This scheme is often compared to the illegal pyramid schemes.

According to Investopedia, a Ponzi Scheme is named and termed after the clerk Charles Ponzi, who was blamed with notoriety for using such luring investment schemes to dupe thousands of people in New England into investing into Postage Stamp Scheme, back in the year 1919. The man immigrated to the United States from his hometown in Italy. Although, he did not invent this investment scheme, he surely made huge money with the help of this operation and thus came into the eyes of the people who later used the same technique to do the same.

However, the scheme collapses with time as the earnings are comparatively less than the payments made. Also the scheme is watched on with suspicion and thus might get interrupted by the legal authorities. The scheme is often seen as an investment boon for all its investors providing them with high returns even at the time of completion of the scheme. But in reality, such schemes only serve the initial investors or the people who started the scheme – all at the cost of innocent investors who invest towards the later part of the scheme.

A Ponzi Scheme, therefore is essentially a fraudulent operation. Throughout history, there have been several such Ponzi Schemes perpetrated by many people. One of the latest well known scams was the one run by Bernie Madoff who was then sentenced to 150 years in prison. The unveiling of this 50 million dollar scam will remain in the minds of the people of America, close as it came at the early days of the current economic recession.