Ponzi schemes - who was Ponzi?

With some much recent news about Ponzi schemes - see the posts on Bernard Madoff and about the Sunshine Empire, the question that some ask is "who was Ponzi and what was his scheme?'

Ponzi was someone with a bright idea which he introduced in the USA as a means of generating great returns. His idea involved international reply coupons which could be bought in any country and used like postage stamps to send a letter overseas. These coupons could also be exchanged for cash in any other country. His brainwave was to buy the coupons in less developed countries and then to ship them to the USA where they could be exchanged for much greater amounts (sounds like a great form of arbitrage). Logistic problems prevented his plan from being carried out but he received such a large amount of investments in his plan that he decided to carry out a massisve deception by using new investment money to pay off previous investments.

If you wish to know more about his life and his ultimate fate, you may refer to wikipedia.