Adele Spitzeder
Adelheid Luise "Adele" Spitzeder, also known by her stage name Adele Vio, was a German actress, folk singer, and con artist. Initially a promising young actress, Spitzeder became a well-known private banker in 19th-century Munich when her theatrical success dwindled. Running what was possibly the first recorded Ponzi scheme, she offered large returns on investments by continually using the money of new investors to pay back the previous ones. At the height of her success, contemporary sources considered her the wealthiest woman in Bavaria.
Opening her bank in 1869, Spitzeder managed to fend off attempts to discredit her for a few years before authorities were able to bring her to trial in 1872. Because Ponzi schemes were not yet illegal, she was convicted instead of bad accounting and mishandling customers' money and sentenced to three years in prison. Her bank was closed and 32,000 people lost 38 million gulden, the equivalent of almost 400 million euros in 2017 money, causing a wave of suicides. Her personal fortune in art and cash was stripped from her.
After her release from prison in 1876, Spitzeder lived off benefactors and unsuccessfully tried to act again in Altona and Berlin. She left Germany for Vienna but police there prevented her engagement, so she returned to Munich in 1878 to publish her memoir. She was arrested again in 1880 for attempting to open a new bank without having the necessary permits but later released without charges. Spitzeder performed as a folk singer, living off friends and benefactors, but she never left her criminal life completely behind her, resulting in further trials and periods of incarceration. She died of cardiac arrest on 27 or 28 October 1895 in Munich.
Spitzeder never married, but she carried on several lesbian relationships. Outwardly, she maintained the persona of a pious Christian woman who helped the poor, which aided the success of her business.
Early life
Adelheid Luise Spitzeder was born on 9 February 1832 in Berlin. Her parents were the actors and singers Josef Spitzeder and Elisabeth "Betty" Spitzeder-Vio. She had six half-siblings from her father's first marriage to Henriette Schüler. Her parents met in Berlin where both were engaged at the Königsstädtisches Theater, Josef as a director and Betty as an actress; they married in 1831. That year, he performed as a guest at the National Theater in Munich to critical acclaim. King Ludwig I offered him and his wife an annual salary of 6,000 gulden if they took a permanent engagement at the National Theater, which led to the family moving to Munich. When Josef Spitzeder died suddenly on 13 December 1832, Ludwig I agreed to help Betty by paying for the children's tuition. Betty then married Franz Maurer and took an engagement at the Carltheater in Vienna in 1840, where Spitzeder attended a Höhere Mädchenschule run by the order of the Ursulines; after a year, she entered the convent's boarding school. In 1844, she and her mother moved back to Munich, where the family lived with Spitzeder's half-siblings and cousins. At age 16, she went to a renowned school led by Madame Tanche. After leaving Tanche's school, she was tutored in foreign languages, composing and piano-playing.Acting career
Wanting to follow in her parents' footsteps and against her mother's wishes, Spitzeder studied with Munich actresses Konstanze Dahn and Charlotte von Hagn. In 1856 or 1857, she debuted at the Hofbühne in Coburg to great acclaim playing Deborah and Mary Stuart. In her memoirs, she claims that the Duke of Coburg and the Duke of Württemberg both praised her talent. Since there were no vacancies at Coburg, she left the Hofbühne to take an engagement at Mannheim before returning to Munich for a few guest roles at the National Theatre. Despite being offered a contract to play there, she knew that she would only be tasked with playing supporting roles due to fierce competition and thus decided to instead work at the theater of Brno. According to her autobiography, her success there led to conflicts with the other actors which in turn led her to leave the engagement after six months for health reasons. She then returned to Munich for six months to recuperate. Despite her mother's urging, she returned to acting at Nuremberg where she was engaged for a year. Afterwards, she played in Frankfurt, Bern, Zürich, Mainz and Karlsruhe. After returning to Munich to visit her mother, she was offered an acting job in Pest with annual salary of 3,000 gulden which she turned down at her mother's wishes. Her mother offered her 50 gulden per month for life if she turned the job down. Nevertheless, she took one last engagement in Altona. During one of her engagements, she met Emilie Stier, stage name Branizka, a fellow actress with whom she soon began a romantic relationship.Despite multiple engagements over a period of many years, she failed to achieve lasting success on the stage. The contemporary source Der Neue Pitaval attested that she had the necessary talent but attributed her lack of success to her appearance. In his biography of Spitzeder, Julian Nebel cites a contemporary describing her as having a "not very beautiful, square face with rough traits, out of which a long, broad nose protrudes; the mouth is broad, the chin pointy, the gray eyes hard to read, a real butch". Her "masculine" behavior is generally highlighted, such as her cigar smoking and surrounding herself with beautiful young women.
Unable to restrict her lifestyle, she began to live at the expense of her creditors and accrued significant debt in Hamburg and Zurich while working there. In 1868, she returned to Munich with her girlfriend Emilie to await job offers from theatrical agents but did not receive any she wanted. Dejected and penniless, she only had her mother's stipend of 50 gulden to live on. The money, however, was not sufficient to pay for her lifestyle of residing in hotels and inns with her girlfriend and six dogs.
Spitzedersche Privatbank
Spitzeder soon had to borrow money from moneylenders to maintain her lifestyle. In late 1869, she met a carpenter's wife in Munich's Au district, then the city's poor neighborhood. After gaining her trust, Spitzeder claimed she knew someone who would pay the woman a return of 10 percent each month on her investments. The wife gave her 100 gulden and immediately received 20 gulden, two months of returns, with the promise of another 110 gulden within three months. According to a contemporary story in Harper's Weekly, Spitzeder also placed an advertisement in the city's major newspaper, the Münchner Neueste Nachrichten, asking to borrow 150 gulden with the promise of 10 percent interest after two months. Another contemporary source, a 1872 article in the Münchner Neueste Nachrichten citing her indictment, claims her first money lending activities started in the spring of 1869.Growth of business
Spitzeder's banking services quickly became the talk of the town in Munich's poorer communities thanks to favorable word-of-mouth advertising and soon, more people gave her their savings. In 1869, she officially founded the Spitzedersche Privatbank. Because her customers were mostly workers from the northern outskirts of Munich, especially the town of Dachau, her bank also came to be known as "Dachauer Bank". Some farmers sold their farms to live off the interest alone. Many lower-class Christians mistrusted the Jewish moneylenders, preferring to bank with a Christian, and she soon had to rent additional rooms in her hotel to accommodate her up to forty employees. One of her employees was Rosa Ehinger, whose beauty and charm Spitzeder used to attract young men to the bank.Spitzeder's business practices and accounting were unconventional and chaotic. Money was deposited in large sacks and in various cupboards. Her employees, all or almost all without training in accounting, regularly simply took money, with the accounting being restricted to recording the names of depositors and the amounts they paid in, often only signed with "XXX" by her illiterate customers. Her business relied solely on acquiring new customers quickly enough to pay existing customers with the newly acquired money. According to some sources, hers was the first known Ponzi scheme. Contemporaneous English-language publications such as Harper's Weekly referred to it as the "Spitzeder swindle". In her doctoral thesis, Hannah Davies recounts the case of Johann Baptist Placht, who in 1874 was indicted for running a Ponzi scheme in Vienna and notes that contemporaries compared his business model to Spitzeder's. Unlike Placht and other fraudsters, Spitzeder never made claims of investing the money and explicitly gave no securities, which paradoxically led customers to trust her more.
By October 1871, the proprietor of the hotel in which she was living and working was no longer willing to tolerate the customer traffic. Spitzeder moved into the house at No. 9 Schönfeld Street near the Englischer Garten which she bought for 54,000 gulden of her customers' money. Including bank employees, there were 83 people who worked from her house, many of whom were brokers who received a five-to-seven percent commission for each new customer. She soon expanded her business and started buying and selling houses and land throughout Bavaria, buying 17 houses in prime locations in Munich alone. By 1871, she received 50,000 to 60,000 gulden each day, although she had lowered her returns paid to 8% per month. Despite the size of her business, the bank had no premises of its own and all business was done first out of her hotel rooms and later her house. By 1871, Spitzeder was in possession of multiple millions of gulden and artwork valued at several million. According to a contemporary report in Harper's Weekly, at the height of her fortune in 1872 she was considered to be the wealthiest woman in Bavaria.