The Con is On
By Dean Jobb
A few weeks before Christmas in 1923, a half-dozen Chicago businessmen boarded a steamer bound for Panama. They were looking forward to touring vast oil fields operated by the Bayano River Syndicate, an investment that was earning them annual profits of an astounding sixty percent.
The promoter behind this lucrative enterprise, a charming and generous lawyer named Leo Koretz, saw them off, and then disappeared. Within days, the investors discovered the truth—there was no syndicate in Panama, and no oil. They had been duped in one of the most audacious and longest-running Ponzi schemes in history, eclipsed only by Bernie Madoff’s spectacular multibillion-dollar fraud.
Ponzi schemes—the rob-Peter-to-pay-Paul scam named for 1920s Boston fraudster Charles Ponzi—are just one of the many ways the gullible can be relieved of their money. From Victor Lustig, the man who sold the Eiffel Tower for scrap metal, to the elaborate hustles immortalized in the movie The Sting, the exploits and imagination of the con man seem to know few bounds. Want proof? Here’s a trio of true crime books where the con takes center stage.
Let’s start with a cutting-edge technology that offers investors a surefire bet on the future. This may sound like a pitch for Bitcoin, but a little more than a century ago it was the hype surrounding a new vehicle navigating the traffic-clogged streets of London: the electrobus.
In A Most Deliberate Swindle: How Edwardian Fraudsters Pulled the Plug on the Electric Bus and Left Our Cities Gasping for Breath (RedDoor Publishing), journalist-turned-author Mick Hamer resurrects a forgotten corporate fraud that helped to deliver a deathblow to the development of electric vehicles, leaving city dwellers to choke on the fumes of diesel-powered buses and trucks for generations. “The electrobus swindle didn’t just impoverish the shareholders of Edwardian Britain,” Hamer writes. “We were all robbed.”
The electrobus, as the name implies, was a battery-powered, double-decker omnibus that debuted in London in 1906. And it appeared, the author notes, when “the future of transport technology hung in the balance.” Horse-drawn vehicles would soon be a relic of the past, but it was not yet clear what type of engine and fuel—steam, gasoline, or electricity—would replace them.
The electrobus seemed to be the logical choice. It “glided noiselessly . . . giving forth no blue vapour and no smell,” gushed a journalist who boarded one for a demonstration run through central London. “The doom of the petrol-driven omnibus is at hand,” another observer predicted.
But the electric bus was headed for the scrap heap, largely because its backers were a motley band of stock promoters and con men looking to turn a quick buck. The chief villain was a German-born lawyer named Edward Ernest Lehwess, whose claim to fame was a bid to drive around the world. He left London with great fanfare in 1902 but only made it as far as the Russian border.
The London Electrobus Company eventually operated a fleet of twenty buses. But the promise of these “original green machines,” as Hamer calls them, was dashed as insiders looted the company’s coffers and newspaper exposés sullied its reputation. Shareholders soon discovered that one of the company’s major assets was a worthless patent held by the grandly named Baron de Martigny, who turned out to be a Canadian-born music-hall entertainer.
Hamer, who has covered the transportation industry for decades, unraveled a web of scams and chased down an array of bad guys to nail this story of greed and deceit. His journalist’s eye for characters and telling detail ensures the narrative never lags.
Electric vehicles are making a comeback as governments battle climate change and, ironically, London plans to have 300 electric buses on its streets by 2020. “The paradox at the heart of the electrobus story,” Hamer notes, “is that although the company was crooked the buses themselves were well engineered and well managed.”
When it comes to being crooked, few could top Nancy Clem. One newspaper dubbed her “the wickedest and most irresponsible woman in the world.” A charming “woman of brain and of power,” she was said to be able to twirl men around her fingers “like ribbons.” She also may be one of the few swindlers in history to get away with murder.
The bodies of Jacob and Nancy Jane Young were found near Indianapolis in 1868. Both had been shot with different weapons and the print of a woman’s boot at the scene raised suspicion that one of the assailants was Clem, who was involved in shady moneylending schemes with the couple.
In The Notorious Mrs. Clem: Murder and Money in the Gilded Age (Johns Hopkins University Press), Indiana history professor Wendy Gamber recreates the murder case that exposed one of America’s earliest female confidence tricksters. Clem acted as a broker for people with money to lend, finding borrowers and promising returns of up to twenty percent. Gamber argues it was a crude form of the Ponzi scheme, with some investors profiting handsomely while others lost their life savings.
When Clem stood trial for murder, her secretive business dealings were used to suggest her guilt. Her moneylending practices might have been illegal, but her real sin, prosecutors and press coverage suggested, was dabbling in business—a man’s world.
Gender roles are a consistent theme as Gamber carefully and thoughtfully recreates Clem’s trials—there were four, as a result of hung juries and successful appeals—and what they say about attitudes toward women in the Gilded Age. Observers attributed her criminal conduct to the corrupting influence of money. Financial independence and an unladylike interest in business, one prosecuting attorney argued, “turned her mother’s milk to gall.”
This is a fascinating story of prejudice, questionable justice, and social inequality. While the focus is on Clem as an accused murderess, there are insights into her swindling career. Like all good fraud artists, Gamber notes, “Clem was charming and persuasive, and she convinced people who should have known better to part with their money.”
For a comprehensive guide to how the likes of Clem, Lehwess, and other slick-talkers operate, check out The Big Con: Great Hoaxes, Frauds, Grifts, and Swindles in American History (ABC-CLIO). Canadian true crime author Nate Hendley has scoured the history books and the Internet to compile this “greatest-hits” collection of the clever ploys and outrageous exploits of con artists.
The best-of-the best are here, including Ponzi, Madoff, Koretz, and Joseph “Yellow Kid” Weil, a brazen Chicago-based swindler who began plying his trade more than a century ago. Hendley relies on the pioneering work of David Maurer, an American professor who studied the con men of the 1930s, for a rundown of quick-hit cons with quirky names such as The Smack, The Tat, and The Pigeon Drop.
The Big Con casts a wide net, exploring everything from online malware and phishing scams and famous hoaxes to fake mediums and promoters of quack remedies. A section devoted to “despicable scams” blasts those who take advantage of the sick and elderly or try to cash in on natural disasters through bogus appeals to help victims. There’s a rundown of classic con movies, from The Sting to 2013’s American Hustle—a list that, surprisingly, omits the Ocean’s franchise and its homages to the con man’s skill and daring.
As he assembled this entertaining and informative collection, Hendley wanted to do more than simply glorify the exploits of con men. The text is sprinkled with tips on how to avoid common scams. “Con artists are not the loveable rascals often portrayed by the popular media,” he notes, “but criminal predators who victimize real people.”
A question that arises throughout the book is why Ponzi schemes and other well-publicized swindles continue to thrive in an age when a quick Google search is likely to expose the truth. The problem, Hendley concludes, is us. “Natural human greed ensures that many scams stay evergreen, while human credulity means many people will continue to embrace nonsensical ideas.”
The Yellow Kid once was asked why swindles work, even scams based on improbable stories such as vast Panamanian oil fields. He downplayed his own skill and blamed the victim. A con man needs a willing dupe, and the lure of easy money can break down the defences of people who should know better. “I never cheated an honest man, only rascals,” he claimed. “They wanted something for nothing. I gave them nothing for something.”
These books, unlike a worthless share certificate in a dubious enterprise, offer something worthwhile—insights into con artists and the tricks of their trade.
Dean Jobb is the author of Empire of Deception (Algonquin Books), the true story of 1920s Chicago swindler Leo Koretz. His next book recreates the crimes of Thomas Neill Cream, a Victorian-era doctor who murdered at least ten people in Canada, Chicago and London. His website is www.deanjobb.com.