The 10 Greatest Scams Of All Time
We’re living in a golden age of scamming right now. The Internet has allowed hucksters, con men and grifters to reach out and touch suckers from Toledo to Tokyo and drain their money lickety-split. Hell, it sure beats working. If you’re looking to step into a new career as a scammer, it behooves you to learn from history. But also keep in mind that not every single one of these folks have a happy ending, so scam at your own risk. Here are ten of the ballsiest, most effective scams from history so you can see how it’s done. Have at it!
Maria Duval’s Psychic Empire
One of the most enduring scams in history is the fake psychic, who promises insight into the unknowable in exchange for sometimes vast sums of money. The most prolific and profitable psychic scammer of all time is Maria Duval, who ran a mail fraud scheme where she claimed to have predicted the stock market, located 20 missing people and won the confidence of celebrities. Her company would send mass-produced letters to gullible folks claiming that Duval had a premonition about them and all they had to do was pay up. The operation netted an estimated $200 million over the years before the Department of Justice shut Duval – or at least somebody using her name – down.
Charles Ponzi’s Scheme
You know you’re a master scammer when you get a style of scam named after you. Charles Ponzi was an Italian financial swindler who came up with a gimmick that was so simple it turned out to be brilliant. It started as a legit business buying international postage and re-selling it for a profit. But once he had some capital on hand, his inner scammer came out. Ponzi got investments from wealthy people, promising a significant regular dividend payout. That payout came from new investors, creating a massive reverse pyramid that collapsed in two years. Ponzi made out like a bandit, buying a mansion in Lexington, Massachusetts. When the cops brought him in for mail fraud, he owed investors $7 million and had no way to pay a dime of it.
Victor Lustig’s Landmark Sale
The story of a con artist getting some desperate rube to buy a landmark like the Brooklyn Bridge seems like an urban legend until you realize that it actually happened. Victor Lustig was an Austrian master salesman who plied his trade on cruise ships traveling from America to Europe. While living in Paris in the 1920s, he read an article about how the French government was having problems finding money to maintain the Eiffel Tower. He invited several of the city’s scrap metal dealers to an auction using forged government stationery and sold one the rights to tear down the tower. He hauled ass out of the city with a briefcase full of cash, but couldn’t resist the urge to do the swindle again in six months and was busted by his mark. Amazingly, Lustig avoided arrest and went on to scam another day.
The ADE 651 Explosion
When you buy a bomb detector, you expect it to detect bombs. It’s sort of in the name. But James McCormick, the inventor of the ADE 651, couldn’t even do that – yet still managed to bilk several countries out of millions of dollars. McCormick produced the device in a shed in his back garden with his wife, assembling them out of cheap Chinese parts and selling each one for as much as $40,000 to the governments of Iraq, Thailand and multiple other nations. The basic design was ripped off from a golf ball locator and demonstrations were rigged to “prove” it worked. McCormick got ten years in jail for his scheme, which netted him millions of dollars while simultaneously putting lives at risk all over the globe.
John Brinkley’s Ballsy Implants
Impotence is a powerful motivator, and the sheer volume of boner-promising pills and supplements is evidence that people will pay for sexual vitality. One of the most successful scammers of all time in this department was Dr. John Romulus Brinkley, who ran a medical clinic specializing in implanting chunks of goat testicles into the scrotums of human men. Needless to say, there is no medical benefit to performing a surgery this bizarre, but that didn’t stop Brinkley from bringing in a cool million dollars a year in 1930 currency. Eventually, the American Medical Association chased him out of the country, but he simply relocated his business to Mexico and kept cutting balls.
Gregor MacGregor’s Island Paradise
What better way to get cash money than by starting your own country? Gregor MacGregor was the self-proclaimed absolute ruler of the nation of Poyais, located off the coast of Honduras. The island, about the size of Wales, was touted to have deliciously pure water that could cure any ill, along with bountiful fruit and wild game and plenty of space for homesteaders to start a new life. MacGregor swiftly began getting money from investors, raising around £200,000 and getting seven ships worth of eager Poyaisians to set forth to their new home. When they arrived, of course, they found a desolate wilderness nothing like what had been sold to them, and two thirds of them died before making it back to Scotland.
Bobby Thompson’s Veteran’s Fund
The man known as Bobby Thompson seemed to have a bulletproof resume as head of the U.S. Navy Veteran’s Association, a nonprofit that had been in existence since 1927. Only one problem: he wasn’t Bobby Thompson. He was actually John Donald Cody, an ambitious grifter who had found the defunct organization and revived it as a multi-state telemarketing scam to fill his pockets with as much as $20 million in donations. There is no evidence that the USNVA ever donated a dime to veterans, but it spent plenty of money bribing politicians to let them collect donations in their states. Cody was arrested in 2012 and had a checkered past of his own – a former Army intelligence officer, he’d been on the run from the law since 1987 after using travelers’ checks to drain $99,000 from the estates of two women. He was sentenced to 28 years in prison and ordered to pay back $6.3 million in fines and costs.
The South Sea Bubble
We like to think of scamming as being a relatively modern invention, going along with the increase of disposable income with advanced capitalism, but as this one shows people have been running hustles for hundreds of years. In 1711, the South Sea Company was formed to handle Britain’s £9,000,000 debt. The company became the major underwriter of the country’s borrowing, in exchange for exclusive trade rights with South America. The public was sold a bill of goods on the company’s eventual profitability, and at their peak a single share was going for a thousand dollars. Unfortunately for the SSC, war with Spain made trade with South America an impossibility – and the company directors knew it. They were never intending to trade, setting up the company just to siphon money from investors. It collapsed in 1720, causing a net loss to the economy of around two hundred trillion of today’s dollars.
Bernard Madoff’s Investment Hustle
One of the most notorious modern practitioners of the Ponzi scheme, Bernie Madoff “made off” with $65 million in what has been called the single greatest fraud in American history. Madoff set up his firm in 1960 with $5,000 he’d earned from working as a lifeguard, and with some of his father’s friends as clients started buying and selling stocks. From all accounts, his company was legit for a while, but when competition got tough Madoff began promising ridiculous returns on funds invested with him. Those returns were paid out in classic Ponzi fashion by deposits from new clients. He kept things relatively exclusive, and 16 separate investigations didn’t turn up any evidence. When the market crashed in 2008 and investors raced to pull out money, Madoff’s house of cards collapsed and he confessed the fraud to his sons, who turned him into the authorities.
If you were responsible for the largest financial fraud in your country’s history, one that drained 10% of its economy, would you follow it up by running for a seat in Parliament? Imagine the balls on Kamlesh Pattni, who did just that. The Kenyan businessman was a key player in the Goldenberg scandal, which paid a foreign company 35% more than they had to for gold exports. Pattini was the man who set up Goldenberg International, which ostensibly exported gold. Only one problem: Kenya doesn’t make gold. The scam grew and grew until a whistleblower inside the company realized that something was off and reported it to the authorities. The total cost to Kenya was around a billion dollars. Oh, and Pattni lost the election.