5 Most Unusual Fraud Cases in History
Miscellaneous / / November 01, 2023
Selling plots of a country that never existed, paid protection from witches and the theft of the Eiffel Tower.
1. Investing in a non-existent country
Once upon a time there lived a Scotsman named Gregor MacGregor in the 19th century. In general, according to his main type of activity, he was military - went to distant Venezuela to fight for its independence from the Spanish crown. There he rose to the rank of brigadier general, but then decided that this career was not for him: there was no chance, they would kill him, there was no point in tempting fate.
In 1820, MacGregor accidentally found himself on the shores of the Gulf of Honduras and there he developed a very original plan for how to make a fortune for the rest of his life. For a drink, he bought from a local Indian chief a signature on a paper he had drawn up, according to which he was given a territory of 32,375 square kilometers on the Mosquito Coast.
This is, for a second, larger than Belgium - such a solid piece of land.
The newly minted landowner MacGregor arrived in London and began to gather investors, praising his “state” to them. He owns his lands named Poyais - Poyars called themselves Indianswho lived here. He came up with the name Cacique Poyaisa for himself - in the local language it supposedly meant “prince.”
According to the Scotsman, Poyais was a real paradise - rich fertile lands in Central America, ready to accept settlers. Prince MacGregor distributed brochures and entire reports in which he described the prospects of his fictional country. Why, His Highness even printed the Poyais currency, for which he exchanged real British pounds.
He was able to convince many people in Europe, including investors and future settlers, to invest in Poyas' "infrastructure". He sold land, shares and promised enormous wealth.
Many British and Europeans who trusted McGregor moved to the beautiful country of Poyas... and found there only impenetrable jungles, in which only useful fauna spiders And snakes, and the only mineral resources were rotten wood.
By the time the colonists who had lost their savings returned and sued MacGregor, he prudently fled London. He spent for some time in Scotland and France, continuing to trade in the territories of a non-existent country. And then he returned back to Venezuela, where he died safely in 1845 in his own home.
2. Sale of the Eiffel Tower
Victor Lustig counts one of the greatest swindlers of the 20th century. Real name: Robert Miller, born in 1890 in Austria-Vegria. He studied at the University of Prague, and when he was expelled from there for a sword duel with another student, he entered the Sorbonne.
Lustig began his career as a swindler by beating passengers on transatlantic flights at cards, as well as selling fake lottery tickets. But this was not enough for him, and he decided to do a really big deal.
Victor submitted forged documents to the vice-director of the department of the Ministry of Posts and Telegraphs of France and turned to the five largest scrap metal dealers in the country. Pretending to be a French official, he said that he was going to sell for scrap... the Eiffel Tower.
The maintenance of this iron contraption is supposedly too expensive, and tourists She's not particularly interested. And therefore, the government made a strong-willed decision to rid France of the tower.
The tender for 7,200 tons of metal is a tasty morsel.
One of the tycoons, Andre Poisson, secretly gave Lustig a bribe, secretly from four competitors. He, “bypassing the protocols,” concluded a contract with him on behalf of the government and also accepted payment for the tower from him - Total about 70 thousand francs, huge money at that time! And fled to Austria.
Do you think that's all? No matter how it is. Poisson, realizing that he had been duped, was embarrassed to contact the police so as not to spoil his reputation. And Lustig returned to Paris after some time and according to exactly the same scheme sold Eiffel Tower for the second time. Naturally, to another buyer.
The second client, however, did not hesitate and called the police, so Lustig had to quickly emigrate in USA. There he became interested in counterfeiting, which is why he went to Alcatraz, spent 12 years there and died behind bars from pneumonia. End.
3. Levying a tax to protect against witches
In 1639–1660, revolution raged in England. And in such difficult times, society often begins to forget itself in religion, reaching the point of fanaticism, and to look for both real and imaginary enemies. Many Englishmen then sincerely believed into existence witches, weaving intrigues against good people. And they really wanted to protect themselves from these assistants of Satan.
Naturally, demand creates supply, and in 1644, a lawyer from Essex named Matthew Hopkins decided to change his profession and become a witch hunter. He took himself two assistants named John Stern and Mary Lackland, and together they began to travel from village to village, offering their services to identify sorcerers, sorceresses and other illegal practitioners of black magic.
Naturally, the illiterate villagers joyfully welcomed the savior and paid him any money requested, if only he would save them from the witches.
I would be jealous of the methods Hopkins used. inquisition. He deprived female suspects of sleep, poked them with needles, threw them into water, sawed them with a dull knife - and if the victims did not bleed or drown, they were declared guilty and brought to justice. And according to the Statute of Witchcraft of 1604 by King James I in England, witchcraft was punishable by death by hanging.
In total, Matthew Hopkins killed more than 230 people. He took very substantial payments from local governing bodies for his work. It got to the point that in the city of Ipswich in 1645 it was even necessary enter a special tax to protect the population from witches. In 14 months of tireless searching, Hopkins killed more people than all the other hunters in 160 years of persecution of witchcraft in England.
Perhaps he would have continued to make money by forcing innocent people under torture to confess to non-existent crimes, but died from tuberculosis in 1647. And after his death interest in witch hunt in England gradually began to decline.
4. The first financial pyramid in the USA
Italian Charles Ponzi arrived to Boston in 1903 with only $2.50 in his pocket in the hope of improving his financial situation. At first, he traded in counterfeiting checks and also helped illegal migrants. For this, Ponzi was imprisoned in an American prison for five years.
Freed, scammer decided on a more ambitious scheme. He made a small start-up capital through currency exchange scams and then founded the Securities Exchange Company in the early 1920s. Legend has it that it was an international bond trading firm, but in fact the SEC was the first known pyramid scheme in history.
Ponzi began attracting investors by promising them 50% profits within 45 days or 100% profits within 90 days. He managed to involve more than 17 thousand people in his scheme.
Suspicious, you say? Well, in those days the American investor was still unafraid. Ponzi used the money of new investors to pay profits to previous investors. Naturally, he kept a certain percentage, quickly having saved up 20 million dollars. This is still a decent amount, but back then it was fabulous wealth.
When the influx of new people into pyramid dried up, the company went bankrupt, the Ponzi scam was exposed, and he was sentenced to 9 years in prison. After serving part of his sentence, Charles was released for good behavior. In the end he moved to Brazil, where he died of a heart attack in 1949 at the age of 66, penniless.
5. Activities of the South Sea Company
At the turn of the 17th–18th centuries, Great Britain waged wars against France, Spain and Portugal and accumulated huge debts. And to solve the financial problems of the crown, in 1711 Lord Treasurer Robert Harley offered restructure them by converting them into shares of the South Sea Company, which he founded.
This organization promised the shareholders asiento (from Spanish. reale assiento - "royal consent") - the right to a monopoly trade in slaves with the Spanish colonies in South America. Spain gave it to Great Britain in 1713 during the signing of the Peace of Utrecht, which ended the War of the Spanish Succession.
But the South Sea Company was unable to implement the asiento. The Spaniards were extremely unhappy with the way the British were conducting business, so they accused them of smuggling and violating the terms of the treaty. At the instigation of Spain, Dutch and French traders began to violate the Company's monopoly. In general, things did not work out right away for the enterprise that was supposed to get Britain out of the debt hole.
But in 1720 the Company's leadership dissolved rumors that the Spaniards allegedly placed their ports completely at their disposal. Although they actually, on the contrary, limited the capacity to three British ships per year. The deceived shareholders began to invest in the South Sea Company, and its shares began to grow by leaps and bounds. They were purchased by everyone - from titled persons to peasants.
Even the smartest people of that time believed and invested. Among them were, for example, physicist Isaac Newton and writer Jonathan Swift.
Naturally, the bubble could not inflate indefinitely. In September 1720 the stock price of the South Sea Company collapsed, which led to its bankruptcy and the financial ruin of thousands of investors. An investigation began that revealed both numerous violations of the organization and bribery among members of the British Parliament, which turned a blind eye to them.
Many bigwigs were sentenced to prison, including the then Chancellor of the Exchequer, John Aisleby. True, some of the accused owners of the Company fled abroad.
Newton, by the way, lost £20,000 is about £3.5 million at today's exchange rates. When asked why so many people invested in such a dubious enterprise, he replied: “I can calculate the movement stars, but not the madness of people."
By the way, even after the collapse, the South Sea Company was not dissolved. Her restructured, and it continued to function until 1855. Over the 140 years of its existence, it has never brought any noticeable profit.
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