Saturday, December 11, 2021

"The Ponzi of Paris: The Greatest, Wildest Confidence Artist in French History"

As mentioned over the years, "I have a morbid fascination with the underbelly of the markets, it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away)" but I was not familiar with this one.

From CrimeReads, December 3:

Marthe Hanau was a savvy woman at the head of a financial empire. She wasn't going to be taken down without a fight.

When he tracked her down in the winter of 1931, the trappings of her once-vast wealth—seaside villas, jewels, a fleet of fast cars—were gone. Roger Normand, billed as “an eminent French authority on law and finance,” found Marthe Hanau in a spartan apartment on the fifth floor of a run-down building in Montmartre that, he was dismayed to discover, had no elevator. The interview was conducted in a room that served as her office, furnished only with a writing desk, typewriter, and a leather chair that, like its owner, had seen better days.

Her defiance and sangfroid—the traits that catapulted her into the financial stratosphere before reality and allegations of orchestrating a massive fraud brought her crashing to earth in 1928—remained intact. “I owe a few hundred millions (of francs). What of it?” she said, peddling the only asset she had left—her limitless self-confidence. “I can and will repay every sou.”

Hanau was one of the most forceful, polarizing, and headline-grabbing figures in 1920s France. She built a financial empire that controlled hundreds of millions of francs that poured in from investors across the country. Her newspaper, La Gazette du Franc, promoted peace, prosperity, and her dizzying array of investment syndicates. France’s top financiers, it was said, sought her favor and advice. So did French politicians. And U.S. President Calvin Coolidge, Italian dictator Benito Mussolini, and other world leaders did not object when she brazenly published their signed photographs to lend credibility to her schemes.

She met with Normand in the midst of her long-delayed and seemingly endless trial on charges of swindling and breach of trust. She was accused of establishing a network of fake companies and using investors’ money to pay profits and dividends, in a French version of the scheme the infamous Charles Ponzi operated in Boston in 1920. Investors were promised annual returns of up to forty percent, doubling their money in less than three years. But her only crime, Hanau insisted, had been to defy the “moneyed powers” in a heroic battle to free hardworking men and women from the “bondage” of the banking system. “I wanted to fight the professional financiers on behalf of the money-saving masses,” she explained, “who are logically entitled to share in the profits their money was making.”

*****

Would the woman the French press dubbed a “money marvel” and the “Ponzi of Paris” win her new battle in the courtroom? Normand emerged from her Montmartre apartment convinced this magnetic, indomitable, “self-taught financier” might just pull it off.

Nothing in Hanau’s early life hinted at her meteoric career as a financial guru. She was born in 1884 in Paris, where her mother owned a store that sold baby clothes. She excelled in mathematics in school but abandoned plans to become a teacher. She was twenty-four when she married Albert Lazare Bloch, the son of a businessman in the northern city of Lille. In 1912 they opened a Paris perfume shop with a small factory at the back, where Hanau concocted her own fragrance, Garden of Murcia. They sold the business during the war and began marketing tubes of a rum-coffee mixture that troops could consume in the trenches, until it was banned when the authorities discovered the Tube du Soldat contained neither coffee nor rum.

Hanau went back to selling perfume and soap. The couple divorced after the war but remained friends and business partners. “I was no longer her confidant,” Bloch later explained, “but she valued my advice and I remained in her pay. It was purely a question of business between us.” Hanau, who was cold and aloof, admired her ex-husband’s outgoing personality and ability to ingratiate himself with potential customers. He was “the kind of fellow who could sell peanuts to the Pope,” he once admitted, and this was a skill set that would prove invaluable as Hanau embarked on a new business venture. “M. Bloch failed me as a husband,” she told friends, “but as a businessman I never had grounds for doubting his fidelity. Hence the severance of one partnership and the continuance of the other.”

Hanau began trading on the stock market and founded her newspaper in 1925. The Roaring Twenties were known as les annĂ©es folles—the crazy years—in France, but the country was a latecomer to the stock-buying frenzy of the money-mad decade. La Gazette du Franc, under the motto “Honest business is the only business,” urged readers to invest in French companies, and many of the stocks Hanau recommended proved to be winners. Soon she was selling shares in her own companies and a web of subsidiaries.....

....MUCH MORE