She Opened The “Ladies’ Deposit Company” In 1879 And Scammed Thousands Of Unmarried, Working-Class Women Out Of Their Money In One Of The Greatest Frauds Of All Time

Throughout history, certain people have left behind a lasting legacy. These individuals weren’t known for their virtuous deeds but for their acts of deception.
In the late 19th century, a woman named Sarah Howe concocted an elaborate hoax known as the Ladies’ Deposit Company that scammed thousands of women out of their money.
Sarah Howe was born in Providence, Rhode Island, around the year 1826. For most of her early life, she worked as a fortune teller in Boston. She was arrested for fraud several times in 1875 because she had a tendency to take out multiple loans and then refuse to pay them back.
In 1879, she cooked up one of the greatest frauds of all time, fooling an entire nation of single women. She opened the Ladies’ Deposit Company and accepted deposits from unmarried, working-class women who didn’t own their own homes.
Deposits could only be in amounts of more than $200 but less than $1,000. A return of eight percent in interest each month was promised.
Even though Howe did not advertise her bank—new members could only be referred by other members in good standing—she quickly attracted a following and gained $500,000 in deposits from 1,200 women.
On the surface, the Ladies’ Deposit Company seemed to be a wonderful opportunity for single women to further their finances and gain independence from men. But in reality, it operated as a Ponzi scheme before Ponzi schemes were even a thing.
Howe took money from depositors under the guise that they would receive high-interest payments from stock market investment gains.
Instead, she paid the interest with money from later depositors. Her scam also placed a limit on the money that could be withdrawn. The women could only draw from the interest money they had accumulated, not from their original capital. She got away with this rule because she said it helped prevent members from overspending.

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Howe’s bank drew a lot of media attention since a bank run by a woman who only serves women had never been heard of before.
In interviews, she claimed her bank was backed by a Quaker charity that was formed in Alexandria, Virginia. She also did not disclose any specific details about her business methods, saying that it would anger her superiors.
In September 1880, the Boston Daily Advertiser ran a series of articles criticizing the bank, explaining that something suspicious seemed to be going on.
Soon after, new deposits stopped being made at the bank, and existing members demanded that their money be returned.
Howe started paying back $80,000. Then, she went on the run with $50,000 of the bank’s money. She was arrested for cheating by false pretenses and sentenced to three years in jail.
Upon her release from jail, she managed to launch another scheme in 1884, having learned nothing from her past experiences. This also fell apart, and she returned to prison in 1888.
After being released in 1889, she took up fortune telling again. She died at the age of 65 in 1892. Until the day she died, she maintained that she was not responsible for the Ladies’ Deposit Company.
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