*, 1854-1918, Brit.-U.S., fraud. Italian-born Eusapia Paladino established a widespread reputation as a medium in England. During the many years of her success, she employed clever tricks to convince high-paying customers that she could conjure the dead. Her sauces were eerie affairs featuring a series of mirrors and lights producing fluttery, blurry images she claimed were those of spirits. Several noted British scientists, including Sir Oliver Lodge, were taken in by her humbuggery. In 1909, Paladino appeared in the U.S., where her tricks were finally exposed by Professor Hugo Msterberg of Harvard, after which Paladino's reputation went quickly into decline.
Patten, Carl Thomas
, d.1959, U.S., fraud. Carl Thomas Patten was the son of a Tennessee bootlegger and a first-rate flim-flammer, who preached old-time gospel while picking the pockets of his spiritual followers. A large, affable man who wore Stetson hats and hand-crafted cowboy boots, Patten was kicked out of high school for operating a still in the basement. He was arrested in 1935for moving stolen automobiles across state lines. Patten was headed down a ruinous path when he met Bible evangelist Bebe Harrison, the woman who was tochange his life. "The only woman I ever saw that I couldn't get fresh with," he drawled. Harrison agreed to marry Patten on condition that he take up her life's work. Patten dutifully studied the scriptures until the Fundamental Ministerial Association deemed him ready to be ordained one of their preachers.
The Pattens spent ten grueling years on the revivalist circuit before moving into the Elm Tabernacle in Oakland, Calif. Thanks to heavy advertising, the couple filled their church to overflowing within a few weeks. While Bebe preached about the wages of sin to the faithful, Patten devised new ways to spend the collection money. Much of it was pumped into newspaper advertising and sound trucks that cruised the streets of Oakland spreading the good word. "Nobody ever put over big-time religion here like I did," C. Thomas Patten bragged. (The "C", he explained, stood for cash.)
The tabernacle was unsuitable for the over-flow crowds the Pattens were drawing. They moved the show to the Oakland Women's City Club, and then the Oakland Arena, with its seating capacity of 8,000. In a nineteen-week period, the Pattens collected $35,000. Whenever something was needed Carl would exhort his listeners to come up with the funds to pay for it. If for any reason they were slow to pay, Patten rebuked them. "God is going to slap you cock-eyed in about two minutes! This is where the fireworks start. God has been talking to one man here for five minutes. I don't know whether he is going to knock him off his seat or not." Just who were these gullible people who swallowed Patten's sonorous lines so easily? According to Carey McWilliams
, who wrote for The Nation, they were for the most part "social outcasts and urban misfits." Many of them were elderly transplants from the rural South who signed over promissory notes to the con man in which they pledged him their worldly belongings after their deaths.
The Pattens devised a number of money-making schemes to line their coffers. They opened their own religious school and said that it was accredited by the University of California, which of course, it was not. About 300 students a year paid $20 a month tuition for the right to wear a collegiate sweater bearing the "P" across the front, and to take such dubious classes as Hawaiian Guitar, Homiletics, Divine Healing, and Scripture Memory. Carl and Bebe had each received a mail-order college degree from Denver S. Swain, proprietor of the suspect Temple Hill College and Seminary, located in McNab
The money kept rolling in until Summer 1947, when Patten committed a serious error of judgment. He sold the church, the school, and their properties to the Loyal Order of the Moose for $450,000. At this, some of the loyal parishioners registered skepticism and doubt for the first time, sparking a government investigation. "The D.A. can't prove I'm taking money under false pretenses," Patten fumed. "You can't prove that against a church...All the other churches are mad because we cleaned them out. None of them get crowds like we do. We have stolen their sheep."
Patten was indicted anyway, on charges of grand theft, embezzlement, fraud, and obtaining money under false pretenses. He was placed on trial in February 1950, was convicted on five counts of grand theft, and sentenced to five to fifty years in prison. During the lengthy trial, Patten was forced to hear the closing arguments from a hospital bed that had been wheeled in. He allegedly had suffered a heart attack and was attended by a private nurse and a handful of his loyal "students," outfitted in the famous collegiate sweaters.
The con man was paroled in 1953 on condition that he never again collect money from his followers. He never did, and was therefore able to live out his remaining days in total obscurity.
, 1887-1964, Brit., hoax. Hesketh Pearson, the author of fourteen biographies, including those of Charles Dickens and George Bernard Shaw, reluctantly admitted to writing The Whispering Gallery, published anonymously in 1927. The book contained startling admissions about European political life, including a dialogue between King Edward VII of England and Kaiser Wilhelm II of Germany, in which the Kaiser revealed his plan to conquer the world. Threatened with litigation, the publisher was forced to reveal Hesketh Pearson as the author. Pearson readily admitted to the hoax, but never revealed the motive behind it. He was acquitted at a subsequent trial, and returned to a distinguished literary career which ended with his death on Apr. 9, 1964.
Peck, Ellen (Nellie Crosby)
, 1829-1915, U.S., fraud. The notorious con woman Ellen Peck, born Nellie Crosby in the quiet village of Woodville, N. H., in 1829, spent the first half of her life as a law-abiding citizen. Peck was a schoolteacher in Connecticut before moving to New York City, where she met and married a businessman, Richard W. Peck. They moved to Sparkville, N.Y., had three children, and lived a quiet life.
For unknown reasons, Ellen Peck packed up and left for New York City in 1880. There she met an elderly man, B.T. Babbit, who had made a fortune selling soap. Peck became his confidante, dining with him frequently and visiting his office. On one occasion when Babbit left Peck alone there, she came across a folder on his desk containing $10,000 in negotiable bonds. Without hesitation she concealed them on her person and made off with them. When Babbit discovered the loss and began bemoaning it to Peck, she offered to act as his detective. Delighted not to have to involve the police, Babbit offered to pay her expenses up to and beyond the value of the bonds for the satisfaction of catching the thief.
Peck conducted her "investigation," quickly ran through her first $5,000 retainer conducting her "investigation." She spent another $5,000 of Babbit's money without turning up a culprit, then disappeared without a trace. Realizing that he had been swindled, Babbit hired some real private detectives, who caught up with her four years later in Sparkville. She was indicted for fraud, sentenced to four years in prison, paroled a year later, and continued her criminal career. Her next victim was another elderly man, Dr. Jason Marks, whom she bilked of $20,000 in cash and jewelry. Peck demonstrated her prowess in 1887 by conning robber baron Jay Gould out of an undisclosed sum. She was arrested again when Dr. Marks filed charges against her. Peck was released from prison in 1892 and lived with her family in Sparkville until the urge struck her again two years later. Now sixty-five years old, Peck took a suite of rooms at a fancy Brooklyn hotel, where she posed as Mrs. Mary Hansen, wife of Admiral Johann Carll Hansen of the Danish Navy. Hansen, a man of solid reputation, was on an extended vacation at the time, giving Peck plenty of latitude in her swindle. She started borrowing on his name from a number of banks and, before bank investigators caught up with her, she had obtained an estimated $50,000.
Months later, using an alias, Peck rented a New York City brownstone and targeted one of her neighbors, Dr. Christopher Lott, an elderly physician. Peck talked Dr. Lott out of his $10,000 life savings and destroyed his health, reportedly through excessive sexual activity. Peck continued her swindles until 1913 when, at the age of eighty-four, she attempted to bilk a Latin-American businessman on a luxury cruise in Mexico. After engaging him in an affair, she threatened to tell his wife. He gave her title to several valuable coffee plantations for her silence. She was arrested for this last swindle and died two years later with more than a million dollars stashed in various banks across the U.S.
Pencovic, Francis (AKA: Krishna Venta)
, 1911-58, U.S., fraud-mur. vict. Francis Pencovic was a petty thief who served minor jail sentences for burglary, larceny, bad checks, non-support of his wife, and sending a threatening letter to Franklin Roosevelt. He had held several jobs: boilermaker, shipyard worker, and dishwasher. During WWII, he founded a cult called The Fountain of the World, WKFL (Wisdom, Knowledge, Faith, Love). Now calling himself Krishna Venta and claiming to have been born in a valley in Nepal, Pencovic stated that he and his followers would take over the world in 1975, ten years after a communist revolution. Later, he claimed to be Christ returning to Earth, and another time claimed to have visited Rome in 600, and was "teleported" to the U.S. The charade worked for more than ten years—until Dec. 9, 1958--when two cult members, Ralph Muller, thirty-three, and Peter Kamenoff, forty-two, suspected Pencovic of sleeping with their wives. Using forty sticks of dynamite, the pair blew up the cult's headquarters killing themselves, Pencovic, five other adults, and two children.
, 1742-99, U.S., fraud. Elisha Perkins was a real physician, but became famous for a device with no basis in medicine. The Perkins' Patented Metallic Tractor device was a U-shaped piece of alloyed metal--supposedly iron, silver, and platinum in one prong and copper, zinc, and gold in the other-- which was thought to pull disease out when drawn over the body. Perkins patented the device in 1796, and counted George Washington among his customers. Most doctors, however, thought the tractor a fraud, and the Connecticut Medical Society, which Perkins had founded, expelled him in 1798. His son, Benjamin D. Perkins, took the device to Europe, where it sold well and was endorsed by other physicians who regarded "Perkinism" as a valid medical achievement. Benjamin, who was also a doctor, apparently admitted in his later years that the tractor was fraudulent, but he made a fortune from it.
Perryman, Charles Wilbraham, and Harris, George (AKA: H.K. Ablett, A.R. Fraser, George Martin, Herbert Smith)
, prom. 1903, Brit., fraud. Charles Perryman worked for a stock and share business run by Herbert Smith. When Smith died in 1903, Perryman continued doing business in the company's name, using Smith's name for transactions. Later, George Harris and another accomplice joined Perryman, and Harris began to open accounts, impersonating Smith and using other aliases. When the three needed references, they gave one of the aliases. Harris' activities were detected by the Incorporated Law Society, which suspended him for twelve months, but Harris continued to operate under other names. After making a profit of about £50,000, the three were caught because many of their customers began suing. The impostors cited the Gaming Act, calling their investments bets. After they were investigated and arrested, they were brought to trial and convicted. Perryman was sentenced to four years in prison, Harris received an eighteen-month sentence, and the third man was givena nine-month sentence.
Peters, Frederick Emerson
, 1885-1959, U.S., fraud. A likable, small-time con man, Frederick Emerson Peters, made a living defrauding expensive stores. The well-dressed Peters would enter a shop and purchase a major item, ostensibly a gift, and ask that it be delivered. He chatted casually to the clerk, bringing in low-key references to important people he knew and places he had been. Peters would then ask to cash a check for somewhat more than the cost of the item and most of the clerks obliged. The gift, sent to an incorrect or nonexistent address, ended up back at the store.
In 1915, Peters was arrested and sent to federal prison for ten years. He was released in 1920 when the secretary of war, Newton D. Baker, a friend of Peters' father, obtained a pardon for him from President Woodrow Wilson. He went right back to work, but now with the additional ability to impersonate famous people, such as Theodore Roosevelt, Jr., Philip Wylie, Booth Tarkington, and Franklin D. Roosevelt. Peters was once again caught and returned to prison.
Lacking reading material with which he had previously enriched his fraud, he obtained a library for McNeil
Island prison by writing U.S. major publishers, asking for books. Peters received some 15,000 new books which he read until he was released again in 1931. His impersonations were now more refined, and the attempted frauds much grander. Although Peters was periodically caught and returned to prison, he continued his impersonations. Finally, in 1952, at the age of sixty-seven, he was caught in Washington, D.C., by a detective who had been following his career for years. Peters' only comment was, "It's been a lot of fun, hasn't it?" He died in 1959, registered at a Connecticut hotel under someone else's name.
Pinkus, Joseph J.
, prom. 1902, U.S., fraud. When Joseph J. Pinkus told people they could lose three to five pounds a week safely, with no exercise and no reducing drugs, by following his Kelpidine Reducing Plan ("Take half a teaspoon of Kelpidine with any meal."), some people believed him and demonstrated their faith in cash. When the postmaster general of New Jersey brought Pinkus into court on charges of fraud, U.S. Supreme Court justices agreed that this so -called reducing plan was useless, but by the letter of the law could not say it was fraud. "An intent to deceive might be inferred from the universality of scientific belief that advertising representations are wholly insupportable," Justice Hugo Black said. But this could not be proved, despite the fact that the "wonder weight cure," kelpidine, was merely dried seaweed from the Pacific Ocean. The advertising claims misrepresented the product's power to take off weight, but proving fraud required more. Pinkus liked to think that when he was acquitted of fraud charges despite the numerous times he appeared in court, it was because he was not guilty of fraud. Technically, he was not. And technically is how he got off.
In 1902, Pinkus won the Reilly vs. Pinkus decision in which Pinkus was accused of offering a phony obesity treatment. He gloated, "I'm the only man who ever beat the Post Office in the Supreme Court of the U.S. by a unanimous decision." He did win, but Black agreed that the victory was simply procedural. Pinkus' attorney was not permitted to cross-examine doctors who testified on medical studies other than the volumes referred to. Black contended that the evidence presented was enough to support the postmaster general's finding that Pinkus' advertising claims misrepresented its power to take off weight, but that, in itself, did not prove fraud.
Pinkus kept the court system and postmaster general busy with myriad health items. When charged with fraud, he was either able to work around the intent of the law via its actual wording or was able to first make a minor change in his product's wording and then work around the intent of the law via its actual wording. Postal scams were, as they are now, numerous and difficult to prove. Often the names of relatives of a swindler already known to the postal service appear as entrepreneurs of new companies, making multiple offenses difficult,
if not impossible, to prosecute.
Poillon, Charlotte, and Poillon, Katherine
, prom. 1900s, U.S., fraud. Charlotte Poillon and her sister, Katherine Poillon, could match any man pound for pound. Charlotte, who occasionally boxed professionally, weighed 210, with Katherine a brawny 200. Together they perpetrated a series of lonely hearts swindles against unsuspecting New York men at the turn of the century. In 1903, for example, Katherine filed a breach-of-promise suit against William G. Brokaw for $250,000. The embarrassed financier settled out of court for $17,500 just to keep his name out of the papers.
In 1907, the Poillons were arrested and fined $10 on a drunk-and-disorderly charge after they tossed a hotel manager down a flight of stairs. The brawling antics of the Poillons in some of Manhattan's most fashionable hotels were legendary. In 1908, they were sentenced to jail for three months for defrauding the Hotel Bristol out of $135. In court they accused a judge named Barlow of not paying the hotel bill after spending the night with them in a riotous orgy. In 1909, six house detectives at the Hotel Willard forcibly ejected them for creating a disturbance--no easy task since Charlotte had once gone four rounds with prizefighter Gentleman Jim Corbett.
Rector's Cafe tangled with the Poillons in 1912 after Charlotte had to be carried from the dining room in a murderous rage. She filed a $25,000 lawsuit, but the court threw out the case after it was learned that Charlotte had been wearing gentleman's attire, and the waiters had made an honest mistake. In 1923, the sisters were in court again. Charles Dusenbury, a 73-year-old laundry-chain store owner, accused the Poillons of swindling him out of $3,000. In court the sisters showed a complete lack of interest by clipping paper dolls out of a newspaper. Dusenbury admitted that the $3,000 was a "gift" and the case was dismissed.
Several months later, W.N. Edelstein accused the Poillons of perpetrating a $23,338 fraud. These charges were more serious, and their position more tenuous. The Poillons hired William Fallon, New York's most famous criminal attorney, better known as the "Great Mouthpiece," who admired the spunk of the sisters and appreciated their eccentricity. But not even the great Fallon, who defended them successfully, could remain in their good graces for long. On one occasion the lawyer asked the sisters for a loan when he was short on cash. "You loafer!" Charlotte screamed. "Where do you think we'd get any money! I have half a mind to clean you up!"
By the late 1920s the exploits of the Poillon sisters disappeared from the newspapers. Charlotte surfaced briefly in 1929 when she replaced a department store boxer demonstrating athletic equipment. After slugging the bag for three weeks, Charlotte grew tired of the job and walked off, never to be heard from again.
, 1878-1949, U.S., fraud. Charles Ponzi was an Italian immigrant who arrived in New York in 1893. He believed that the streets of America were, indeed, paved not with gold but with suckers eager to give up their hard-earned savings to anyone with a get-rich-quick scheme. But several years passed before Ponzi came up with the right scheme, and when he did, it made the five-foot-two-inch sharper an overnight millionaire, a stellar U.S. businessman, a genius of finance, until his colossal fraud was discovered. When first arriving in New York, Ponzi took a job as a waiter, but was fired because he was constantly badgering customers with investment schemes.
With two dollars to his name, Ponzi emigrated from the U.S. to Canada, but he was arrested within weeks of his arrival for forging a check. Ponzi went to jail for six months. Upon release, he traveled back to the U.S., and went to Atlanta where he inveigled leaders of the Italian community in a wild immigration scheme. He would, said Ponzi, bring tens of thousands of Italians to the U.S. without any interference from immigration authorities. Certain Italian leaders in Atlanta advanced Ponzi considerable sums to finance the proposal. The dapper little man sneak a few illegals into the country before being jailed.
Ponzi next appeared in Boston in 1914 where he charmed the daughter of a wholesale grocer in the Italian community. They were soon married and Ponzi took over his father-in-law's business. He was a miserable businessman and the firm soon went under. "The market just fell out," was Ponzi's lame excuse to his wife, Rose. He then took a job as a translator for J.P. Poole, earning $16 a week. Ponzi sat at his desk most of the day working up schemes to fleece the gullible, but he discarded these ideas almost as fast as he thought them up, realizing that all were impractical. Then, in June 1919, Charles Ponzi hit upon an idea that would make him rich. He called it "The Ponzi Plan," but it was nothing more than the old Peter-to-Paul swindle. Ponzi had undoubtedly read and researched this kind of swindle as it had been practiced by William Franklin Miller, who operated the Miller Syndicate swindle in New York twenty years earlier.
At first the Ponzi Plan involved reply coupons issued by the International Postal Union. These coupons, Ponzi realized, were issued for cheap prices in certain countries where the economy was depressed but could be redeemed in other countries where rates for the coupons were higher. One could purchase an International Postal Union coupon in Germany, for instance, for a penny, and redeem the same coupon in the U.S. for 5¢. He quit his job and borrowed money, which he sent to relatives abroad to buy postal coupons. This done, Ponzi received the coupons, but when he tried to redeem them, he sank into a quicksand of red tape. His scheme collapsed. But even though it was impractical, the idea of the scheme was salable.
Ponzi went to his friends and relatives and showed them the stacks of coupons he had purchased in Italy and other foreign countries. He told them he was about to exchange these coupons for a 500 percent profit. Now was the time for them to get in on the action, he insisted. They would all be millionaires within a few months. The concept was fuzzy and unappealing to those Ponzi approached, but they nevertheless gambled with him, giving Ponzi $1,250. To their amazement, within ninety days, little Charley reappeared, returning $750 interest on the investment. The investors were shocked. "Reinvest and tell your friends," Ponzi told his investors. They did and within a few weeks, the little Boston office Ponzi maintained was overrun with hundreds of eager, money-waving investors.
Taking in hundreds of thousands of dollars, Ponzi quickly rented new offices for his Financial Exchange Company on School Street, which was in the heart of Boston's financial district. Ponzi spent most of his time trying to hire people to count the money he was taking in. But the cash flow was so heavy that he merely began stuffing the money in empty desk drawers, boxes, filing cabinets, suitcases, and wastebaskets. Hundreds of clamoring investors mostly from the Italian community in Boston, clogged Ponzi's offices every day. He recorded each investor's amount, and amazingly, within ninety days, he returned 50 percent interest on the money. Everyone reinvested, and they were further startled to see a return within forty-five days. This incredible repayment system went on for more than a year, with an average $200,000 a day taken in by Ponzi.
His clerks were Italians who spoke little English, mostly his wife's relatives, and they had no idea how to handle finances. They merely wrote down the investor's name and the amount invested and the day the investment was made. This was the limit of their banking ability. Ponzi then stuffed the money into hiding places and began to live like a millionaire. He purchased limousines, a huge mansion for his family, and diamonds for his wife. Ponzi even bought the Poole firm where he had once worked just so he could fire his former employer, whom he disliked.
Little Charley was a clothes horse who loved nothing better than to dress in the finest tailor-made clothes. He purchased 200 suits and 100 pairs of shoes. He bought two dozen diamond stickpins, a dozen malacca canes with solid gold handles, and 100 $5 ties. When Ponzi walked into a store, he began buying everything in sight. He carried huge amounts of cash on his person and hired armed bodyguards to follow him around. Summer 1920, Ponzi appeared at the Hanover Trust Company with two suitcases packed with $3 million in cash. He bought controlling interest in the financial institution.
Continuing to pay his skyrocketing interest rates, more money than ever poured into Ponzi's mysterious coffers. He began to give interviews to the press, telling financial reporters very little, except to point out repeatedly that he was one of the greatest financial wizards of the era. Certain journalists, however, began to question Ponzi's procedures, pointing out to readers that even the "Great Ponzi" could not legitimately return huge amounts of interest on investments in so short a time. Then the Boston Globe asked for an interview. Ponzi suddenly became shy, cautious. He hired publicity man William McMasters
to front for his firm, but McMasters
became suspicious about the oddball Ponzi operation.
After a few days of working with Ponzi, McMasters
shook his head and walked out, going to state authorities to report the obvious swindle. "The man is a complete financial idiot," McMasters
said of Ponzi. "He can hardly add. There is money stuffed into every conceivable place in his offices. He sits around with his feet on the desk smoking expensive cigars in a diamond holder and talking complete gibberish about postal coupons."
Because of McMaster
's statements, Ponzi was called before state authorities and ordered to bring his books showing all financial transactions. Arriving at the State House in Boston on July 10, 1920, Ponzi brought along stacks of musty, crumbling ledgers. Outside the building, scores of his admirers cheered Ponzi, one screaming frantically: "You're the greatest Italian of them all!"
Ponzi shook his head and said modestly: "Oh, no, Columbus and Marconi. Columbus discovered America. Marconi discovered the wireless."
"Sure," someone else responded in the crowd, "but you discovered money!"
The ledgers were examined thoroughly, dozens of financial experts and state auditors studying them. They reported that the books reflected a maze of misinformation. There were investors listed without the amounts of their investments, and there were huge sums of money recorded but no names of investors entered next to these amounts. Ponzi's employees were questioned, but they only blinked at questions which any junior accountant could have answered.
They knew nothing about banking or financial procedures and they had no idea how the amazing Charles Ponzi invested the staggering sums he took in each day. Nor did they have any idea what Ponzi actually did in his office, other than to sit about, smoke cigars and pontificate about the complicated world of big business. It became clear that Ponzi was simply taking in money from one investor on a ninety-day return on interest and remitting a portion of that money to another investor on a forty-five day return on interest.
Then the Boston Globe published a stinging expose of Ponzi, the result of its investigative reporters' long research into the mysterious affairs of Ponzi. His criminal arrests for forgery and smuggling were cited in the story. The result was a near riot on Aug. 13, 1920, as thousands of Ponzi's investors converged upon his small offices, all demanding the return of their money, with or without interest. Ponzi was impervious to it all, arrogantly telling his harassed and troubled clerks to "pay everybody off!" But this was easier said than done. Although Ponzi had taken in more than $20 million within eight months, the clerks ran out of money after paying back $15 million. Only then did Ponzi stir himself, running about the offices. Frantic, he yanked open empty file and desk drawers, muttering: "There's more money around here somewhere. There's got to be more money. Hurry, find it!" But there was no money to find.
Two days earlier, Ponzi had packed $2 million in a suitcase and had driven to Saratoga Springs to gamble at the tables of the largest casino. He had hoped to win millions and thus shore up his crumbling financial institution, but he was as miserable a gambler as he was a businessman. He lost every penny. A week later Charles Ponzi was arrested by federal agents at his twenty-room mansion in Lexington, charged with using the mails to defraud. While being tried, Ponzi, undaunted, was still sending out letters to his investors, urging them to re-invest. None did. Ponzi was convicted of mail fraud a federal offense, and sent to Plymouth Prison to serve four years.
Upon his release in 1925, he was again arrested for the same swindle, charged by the state of Massachusetts and convicted of fraud. He received another nine-year term. While free on bond, pending appeal, Ponzi fled to Florida where he attempted to swindle thousands in a non-existent real estate scam during the fantastic land boom then engulfing Florida. He was arrested, convicted, and sent to prison for a year. When released, Massachusetts authorities were waiting for him. He was again taken to prison in Massachusetts where he served out his nine-year state term, being released in 1934. He was then deported to Italy. Just before he sailed, Charles Ponzi held his last interview. His suit was old and shabby and his shoes were unpolished and run down at the heels. His wife Rose had divorced him, and he sadly stated that he was returning to his native land without a dime. "I bear no grudges," he said. "I hope the world forgives me."
But the swindler had not lost his touch. After only a few months in Italy, Ponzi was hired by Italian dictator Benito Mussolini, given a lofty position connected with the fascist treasury. Within weeks, however, Mussolini's ministers reported that Charles Ponzi was a "financial idiot" who knew nothing of international banking. Before Mussolini could fire him, Ponzi stuffed two trunks full of money and slipped out of the country on a tramp steamer headed for South America. A newspaper account related how Charles Ponzi, one-time multi-millionaire swindler, had died in a Rio de Janiero charity ward. According to some estimates, there was still $3 million missing from Ponzi's wild Peter-to-Paul scheme. It was never located.
Prince, Henry James
, 1811-99, Brit., fraud. The Reverend Henry James Prince preached the doctrine of the Spirit of Love, drawing huge crowds as curate of Charlinh, near Somerset, with his fire and brimstone sermons. Surrounded by adoring disciples, mostly female, he was forbidden by his bishop to continue preaching and left the Church of England to sermonize in open fields and barns.
Calling himself the prophet of Elijah, Prince moved to the then fashionable resort town of Brighton, and became the most popular preacher of his day, collecting £30,000 from his disciples and purchasing an estate at Spaxton, which he turned into the "Abode of Love." All his followers were told to sell their worldly goods and donate the proceeds to the community. About sixty people, mostly women, followed Prince. Viewing his flock as the "Brides of the Lord," Prince took over as the Lord, and often was addressed as "God" by his devotees. Letters addressed to "Our Lord God, Somerset," reached him easily. When a woman named Patterson, with whom Prince was publicly intimate (describing the relationship as an act of worship) became pregnant, Prince announced there would be no birth, and explained the ensuing child as an act of the Devil. Eventually beset by lawsuits, his operation was exposed, shocking Victorian morality, when three women sued for the return of about £6,000. Prince continued to live with a harem, and died surrounded by women, in 1899, at the age of eighty-eight.
, 1679-1763, Brit., fraud. The people of Britain became fascinated with the distant land of Formosa and made George Psalmanazar a rich man, though he had never been out of Europe and had created his idea of the island nation that is now called Taiwan out of his own gruesome imagination. Psalmanazar, probably French by birth, changed his name as a young man. In 1702 he arrived in London, where he was quickly heralded as the possessor of arcane knowledge. He translated the Church of England catechism into his made-up language, offering it to missionaries planning to go to the Far East.
When others who had been east questioned him, the 25-year-old wrote, in Latin, a book called Historical and Geographical Description of Formosa in which he made up an entire geography, culture, and history. He even went to Oxford to teach an entirely made-up language. Psalmanazar's description of Formosa included items gleaned from reading and from his imagination. In his version the natives killed little boys and burned their hearts for the glory of their gods. The native Formosans were, according to him, cannibals who ate the raw flesh of prisoners, and had colleges where classes were taught in ancient Greek.
Psalmanazar was challenged by some people, especially the astronomer Edmund Halley who asked simple questions about the sun and got nonsense for answers. Word got around, and the public lost interest in him. Soon thereafter, at the age of thirty-two, Psalmanazar emerged from a serious illness, and recanted everything he had said before. He became genuinely religious, regretting his imposture, although he never did return to his original name.
From the World Encyclopedia of Con Artists and Confidence Games