Have you ever seen this slick, vintage car while cruising down the street?
No? Well that makes sense, since they never really made it onto the road. But you never would have
guessed that based on the ads for the car that ran at the height of the 1970s fuel crisis.
The Dale was supposedly a maximum efficiency car that sported three wheels
and promised 70 miles per gallon. It was the brainchild of Geraldine Elizabeth Carmichael.
To investors, Carmichael claimed she was the widow of a NASA engineer and a mother
of five. In reality, she was a wanted fugitive who had ties to a counterfeiting operation.
Hi, I’m Justin Dodd, filling in for Erin this week on the List Show. Carmichael did make a
few prototypes of the car, and one was even featured on The Price is Right. Hundreds of
orders poured in, and all was looking great … Then came an ill-fated test drive intended to
raise money from Japanese backers. With no funding to actually produce the car, Carmichael eventually
went into hiding with investors’ money. The story of her disappearance was featured on
an episode of one of our favorite shows, Unsolved Mysteries, and she was arrested shortly after.
I’ve said it once and I’ll say it again: You can fool the general public,
but you can’t outrun Robert Stack. The Dale is just one example of a historical scam,
con, grift, lure, or trick that I’m going to share with you today. Let’s get started.
I don’t know who you have to bamboozle in order to get an entire category of scams named after you,
but I suppose Charles Ponzi would be able to tell me. Ponzi emigrated from Italy to the U.S.
in the early 1900s. He reportedly gambled away his life savings on the boat ride over.
After a few illicit attempts at making money—more than one leading to brief imprisonment—he
finally came up with the scheme that his name would eventually become associated with.
In 1920, Ponzi discovered that international postal reply coupons— which are essentially a
form of prepaid postage—could be purchased and exchanged for five cents worth of U.S. postage
stamps. If the coupons were bought in a country with a weak economy, where they cost less money,
then exchanged for a regular stamp in a country with a stronger economy,
and then sold, one could essentially make free money. More or less.
Ponzi began recruiting people back in Italy to help with his scheme. This operation might never
have landed him in hot water if he hadn’t been so…let’s say “ambitious.” The trouble came when he
began convincing “investors” to lend money to his “Securities Exchange Company”, which he would then
pay back plus 50 percent interest in 90 days. It sounded too good to be true!
That’s because… it was. Most of the money was not going to buy foreign postal coupons anymore,
it was going into Ponzi’s pocket, and the rest was going to pay back other investors.
The sham couldn’t stay afloat forever. The New York postmaster said that for Ponzi to
have made as much money as he claimed, he’d need to have moved about 160 million postal vouchers
across borders. But at the same time, the Wall Street Journal learned that the previous year,
less than 1.2 million had been issued worldwide, with a value of less than 60,000 dollars. Whoops.
Ponzi had stolen $20 million from his investors, and he was charged with mail fraud. Nowadays,
any scam that functions by paying back old investors with new investors’ money
is called a Ponzi Scheme. Charles Ponzi didn’t invent the
Ponzi scheme, though—he just perfected it. A man named William “520 Percent” Miller stole at least
$100,000 from his “investors” while working as a bookie in Brooklyn back in 1899 using similar
methods. This type of scam was also alluded to by Charles Dickens back in the mid-1800s.
Apparently, at one point in time, the practice was known as the “rob Peter to pay Paul” scheme.
Pretty good name, but Ponzi Scheme is catchier. Another old-timey scam is the practice of salting
a mine. “Salting,” in this case, refers to adding valuable materials to a sample or mine
in order to dupe potential buyers. This has been a fairly common practice during various gold rushes
throughout history, when a single profitable gold mine could guarantee you a life of comfort.
If you could convince a buyer that your mine was the El Dorado of holes-in-the-ground by sprinkling
gold dust throughout it, you could make enough money to leave town and start a new life before
your marks were any the wiser. Some schemers would go as far as to load a shotgun with ore
shavings and blast it into the rock surface so as to create a convincingly embedded wall of gold.
And this practice isn’t ancient history. A huge scandal in the 1990s centering on Bre-X
Minerals later inspired the Matthew McConaughey movie Gold. It was essentially a multi-billion
dollar salting operation, with mystery, lies, and specious reports of gold deposits in Indonesia.
Throw some sunglasses on and give me an “alright alright alright” and the movie
basically writes itself. Selling something with an
artificially inflated value is one thing, but selling something that doesn’t even belong to you
is another beast entirely. Take Peaches O’Day, the fictional character played by Mae West in the film
Every Day’s a Holiday, who sells the Brooklyn Bridge to a gullible buyer. What a hilarious
concept for a silly and totally-not-true film! Well, turns out, someone really did sell the
Brooklyn Bridge. Actually, scratch that, several people sold the bridge. Like, many times over.
One con man by the name of George C. Parker forged convincing documents proving his ownership
of the bridge. He’d sell it to marks who were convinced they could make a fortune charging
tolls on their newly purchased bridge. Parker also reportedly sold the Metropolitan Museum of Art and
The Statue of Liberty at various points. Two other bridge scammers were Charles and Fred Gondorf,
who would literally erect signs that read “Bridge for Sale” during the hours they knew police
officers weren’t around. The most perplexing part of these stories is not that someone
would have the gall to sell a city bridge, but, in the words of Luc Sante, author of Low Life:
Lures and Snares of Old New York, “ ... that there would have been suckers both gullible enough and
sufficiently well-heeled to fall for it." The Gondorf brothers had many other cons up
their sleeves, including a horse-racing scam which would eventually help inspire the film
The Sting starring Robert Redford and Paul Newman. Though not an intentional con, per se,
it is worth noting that the makers of the film were sued for plagiarism
by author David W. Maurer, who claimed the movie was suspiciously similar to his book The Big Con,
a nonfiction account of early 20th century con men. The studio eventually settled out of court.
While the phrase “mail fraud” doesn’t sound like a wild, high-intensity criminal activity,
these cons have the potential to be some of the most profitable and wide-ranging. Take the case
of the Baker estate. Over the course of several decades, countless individuals with the surname
Baker were contacted by representatives of the estate of Jacob Baker of Philadelphia, a
tremendously wealthy man who died while his estate was unprobated. These other Bakers were convinced
that they had claim to part of this fortune, and if they just paid the representatives a fair sum
of cash, they could stake those claims. These people never received their money,
because Jacob Baker never existed. His entire estate was fabricated, and over the course of
nearly 70 years, the con raked in millions from people who happened to be named Baker. In 1936,
28 people were indicted for what was probably the most wide-ranging case of mail fraud at the time.
Then there’s Oscar Hartzell, who used similar tactics to separate people from their money in
hopes of reaping some part of an unclaimed fortune. His tale’s protagonist, though,
was not fictional. It was Sir Francis Drake, the famed adventurer. Hartzell convinced thousands
of Drakes that they could claim some of Drake’s fortune (which, according to Hartzell, had now,
with interest, grown to $100 billion). All Hartzell had to do was sue the British government,
an expensive endeavor—hence the need for investments from his Drakes.
His scam went on for years, and he was eventually arrested in 1933. Somehow, this didn’t deter his
victims. Some of the people he had swindled even sent him more money for his trial! Reportedly,
even after his death in 1943, many believed in Hartzell and their claim to the Drake fortune.
What’s a good con without a good costume? An 1888 newspaper reported about a con artist who
introduced himself as Father McCarthy and established himself in the local church.
His con involved going “looking for a gift” for a cardinal,
picking out some choice diamonds and jewelry, and then having them brought over to the priests’
quarters. When the jeweler arrived, McCarthy would open the door, dressed as a priest of course,
and bring the gems into another room to show other men of the cloth.
McCarthy was, in reality, sneaking out a back entrance, never to be seen in town again.
And lastly, if you’re looking for some old-timey conning advice, you should turn to
Victor Lustig. Lustig was one of the most notorious confidence men of the 20th century.
He’s known today as “the man who sold the Eiffel Tower twice” because, well, I think you can guess
why. He also created one of the most successful counterfeit money operations in history. Before
he died behind bars, he’s said to have written down his Ten Commandments for aspiring conmen.
Some highlights include: Never look bored. / Wait for the other person to reveal religious
or political views, and then have the same ones. / Never boast, but let your importance be
quietly obvious. / And lastly, never get drunk. Lustig sounds like the perfect George Clooney in a
historical prequel to Ocean’s 11. What historical con-woman would you cast alongside him?
Thanks for watching Mental Floss on YouTube. Let us know your favorite modern-day scam
in the comments below, hopefully one that you didn’t fall for too recently.
There are only so many foreign princes out there, you know. I’ll see you next time.