“ We do not see that a minor whose money could not be identified is in a better situation that that of the other defendants. Like them, on August 2d, he was only a creditor of Ponzi, and was moved to avoid insolvency by a preference just as they were. A minor is not exempt from the defeat of an unlawful preference by section 60b of the Bankruptcy Act as amended. ”

“ The outstanding facts are not really in dispute. It is only in the interpretation of those facts that our difference of view arises.
In the first place, we do not agree that the action of the defendants constituted a rescission for fraud and a restoration of the money lent on that ground. As early as April, his secretary testifies that Ponzi adopted the practice of permitting any who did not wish to leave his money for 45 days to receive it back in full without interest, and this was announced from time to time. Two of the defendants expressly testified to this. ”

“ These things they could do without violating any statutory rule against preference in bankruptcy, because they then would have been endeavoring to get their own money, and not money in the estate of the bankrupt. But to succeed they must trace the money, and therein they have failed. It is clear that all the money deposited by these defendants was withdrawn from deposit some days before they applied for and received payment of their unmatured notes. ”

“ He was willing, he said, to give others the opportunity to share with him this profit. By a written promise in 90 days to pay them $150 for every $100 loaned, he induced thousands to lend him. He stimulated their avidity by paying his 90-day notes in full at the end of 45 days, and by circulating the notice that he would pay any unmatured note presented in less than 45 days at 100 per cent. ”