Get-Rich Scams of the Roaring Twenties

Get-Rich Scams of the Roaring Twenties

The economy boomed during the Roaring Twenties and rising incomes gave ordinary Americans access to enticing new conveniences, including washing machines, refrigerators, cars and other luxuries that would have once seemed unattainable.

But for many, that wasn’t enough.

With newly-minted Wall Street millionaires flaunting their mansions and opulent lifestyles in a style akin to the protagonist of F. Scott Fitzgerald’s 1925 novel The Great Gatsby, it was easy for an average Joe to dream big, too, and envision parlaying a few dollars in hard-earned savings into a similarly vast fortune.

That eagerness played right into the hands of the Roaring Twenties’ legions of fast-talking promoters, charlatans and outright swindlers, who enticed the would-be wealthy with scores of seemingly foolproof schemes—from stock in companies that didn’t really exist, to speculation in Florida real estate or California oilfields, to Boston-based conman Charles Ponzi’s promise that investors could make a 50 percent return in 90 days’ time by investing in a bizarre plan to redeem overseas postal coupons.

READ MORE: 8 Ways ‘The Great Gatsby’ Captured the Roaring Twenties

Boom Times Invite Risk

In some ways, the get-rich-quick schemes were the inevitable by-product of an optimistic era in which anything seemed possible.

“The frontiers of capitalist innovation always attract investment scams, and there were many such frontiers in the 1920s, fed by technological invention—radio, airplanes, telephony, electrification, chemical breakthroughs—and the associated more general economic boom of the era,” explains Edward J. Balleisen, a professor of history and public policy at Duke University and author of the 2017 book Fraud: An American History from Barnum to Madoff. “Those frontiers suggest the potential—and actual example—of great riches, and boom times make credit easier to obtain.”

People wanted to follow the example of heroes such as automobile mogul Henry Ford and aviator Charles Lindbergh, who had dared to dream. “These men were celebrated for their pluck, courage and daring,” says Nate Hendley, author of the 2016 book The Big Con: Great Hoaxes, Frauds, Grifts and Swindles in American History. “Intentionally or not, the message that filtered down to the public was: Be bold. Courage is good. Don’t be timid. In other words—don’t hesitate to invest your cash!”

Prohibition also played a role in making the citizens susceptible, according to Hendley. “It turned street-corner thugs such as Al Capone into millionaires. Average, law-abiding citizens had no problem buying illegal booze from such people. Once citizens had crossed that moral line and started frequenting illegal speakeasies and buying black-market booze, they naturally became more receptive to sleazy but enticing pitches to invest in get-rich-quick schemes.”

READ MORE: How Prohibition Put the ‘Organized’ in Organized Crime

The Original Ponzi Scheme

At the same time, many people lacked the financial literacy to understand the difference between investing in a legitimate company and a scheme such as the one operated by Ponzi, an Italian immigrant who claimed to have become a wealthy man through sheer ingenuity and hard work.

“Americans love a rags-to-riches story,” Hendley says. The Boston-based Ponzi told investors that he’d discovered a way to make a fortune by buying Spanish mail coupons and redeeming them for U.S. stamps, to take advantage of the weakness of Spanish currency. In reality, Hendley explains, what Ponzi actually did “was simply take money from new investors and give it to old investors, without actually investing in anything tangible…in other words, he merely recirculated cash.”

Some 40,000 investors entrusted Ponzi with $15 million. But after U.S. postal inspectors started probing his scheme, it collapsed, and Ponzi went to prison. Many of his investors refused to believe they’d been conned, and hung on to his worthless certificates.

READ MORE: How the Ponzi Scheme Got Its Name

A Millionaire Oil Baron Who Wasn’t

Though the scam became known as a Ponzi scheme, its namesake wasn’t the only one who perpetrated it. In Chicago, Leo Koretz, an immigrant from Bohemia, made a mint selling shares in supposedly lucrative rice plantations in Arkansas that didn’t actually exist, as well as in a logging company that he claimed owned land with oil beneath it.

“Koretz was an accomplished actor who lived a lie for most of his life, playing the role of millionaire oil baron who was willing to share his success with his relatives and friends,” explains Dean Jobb, a journalism professor at University of King’s College in Nova Scotia and author of the 2015 book Empire of Deception: The Incredible Story of a Master Swindler Who Seduced a City and Captivated a Nation.

He operated his grandly named Bayano Syndicate swindle for almost 20 years, far longer than any Ponzi scheme survived until Bernie Madoff’s multi-billion-dollar fraud was exposed a decade ago.”

Koretz promised and delivered high returns, and this attracted more investors and money to keep his pyramid scheme afloat, Jobb says. He also managed to convince many of his investors to reinvest their paper profits in more worthless Bayano stock—in effect, conning them twice.

Florida Land Speculators

Florida, which attracted northerners who were eager to escape winter weather, also became a paradise for land speculators, who bought properties at cheap prices and sold them for large profits. Some of the speculators never actually went to Florida themselves. Instead they hired young agents who stood out in the hot sun and convinced buyers to put down a non-refundable down payment on a parcel.

Many of the purchasers couldn’t afford to actually pay off the loans; instead, they were gambling that land prices would rise even more, so that they could resell and walk away with a profit. Eventually, though, the market stalled, prices fell, and many were stuck with properties worth far less than they’d expected.

Sales of Elusive Oil Wells

The growing demand for petroleum to fuel automobiles also led to oil drilling schemes concocted by promoters who mailed out literature and handed out flyers that promised a fabulous return. Some even chartered buses to round up potential investors and drive them out to the oil fields for a look-see.

As described in a Los Angeles Times review of Jules Tygiel’s 1994 book The Great Los Angeles Swindle: Oil, Stocks and Scandal During the Roaring Twenties, one of the most audacious promoters was Courtenay Chauncey “C.C.” Julian, who bought newspaper and radio ads in which he cajoled, “You’ll never make a thin dime just lookin’ on.”

Julian attracted $2 million from 40,000 small investors, and actually used it to drill wells and open a chain of gas stations. But after authorities began to suspect him of cooking the books and other improprieties, he sold his collapsing company and avoided a mail fraud indictment by fleeing to Shanghai, where he committed suicide.

Wall Street Scams

Wall Street offered its share of get-rich-quick schemes as well. With stock prices rising, small investors were tantalized by the prospect of bigger returns on their savings than bank accounts would pay in interest. But they had no way of knowing that the market was being manipulated by wealthy investors.

One infamous 1920s scam was the Radio Pool, in which manipulators drove up the price of RCA stock, took their profits, and left other shareholders to watch helplessly as their shares sank. To make matters worse, many small investors were enticed into buying shares of companies on margin—essentially, with loans that they had to repay out of their pockets if the stock price went down.

READ MORE: Warning Signs Investors Missed Before the 1929 Crash

The proliferation of get-rich-quick scams in the 1920s was so intense that titans of industry began to worry about the con artists’ and fly-by-night firms’ corrosive effect on the system, even if they were willing to look the other way at the misrepresentations that their own kind sometimes perpetrated.

“Members of the business establishment saw the worst frauds as economic parasitism that gnawed away at the profits of legitimate firms, and potentially undercut broader public confidence in markets, and capitalism, more generally,” Balleisen explains. “At least occasionally, those business leaders fretted about the potential threat posed by Soviet communism.”

That angst led to the rise of private-sector watchdog groups such as the Better Business Bureau, a nationwide organization formed in 1921 that investigated and alerted the public to unscrupulous operators, and increasing aggressiveness by government regulatory agencies.

With the Wall Street crash of 1929, the prosperity that had funded the rise of get-rich-quick schemes vaporized. The money may have dried up, but the allure of easy wealth had become a permanent part of the American psyche.

“The notion that anyone can be a millionaire was strong in the 1920s,” Hendley says, “and never went away.”

7 of the Greatest Scams Ever

You may have heard the one about 51-year-old Maria Gabriella Perez, the owner of a Beverly Hills beauty salon, who was arrested by federal authorities this week for allegedly stealing credit card information from Jennifer Aniston, Anne Hathaway and Liv Tyler among others. Perez, it seems, racked up $280,000 in fraudulent charges in a year.

Several years ago my son and I were the victims of a scam perpetrated by a bad guy who lived in Arizona. In total, we lost about $15,000 in cash and collectibles, far less than the hundreds of thousands of dollars lost by some of his other victims, who were located across the globe.

Needless to say I was furious and more than a little embarrassed and I wanted to get even. Of course, this guy didn&rsquot use any of his real information. But, hey, I&rsquom an investigative reporter, so I did a little (OK a lot) of investigative work and finally tracked him down. Ultimately I turned Phoenix authorities on to him. Actually, they were already looking for him, but I like to think I had a hand in putting him behind bars. He was ultimately arrested and is set for trial soon. Couldn&rsquot happen to a nicer guy.

Anyway, all this got me to thinking about all the scams that people have fallen prey to over the years. So, for your reading pleasure, here are seven of my favorites, in no particular order. Oh, and it goes without saying, "Don't try any of these at home." [Why Old People Make Good Scam Targets]

Work at Home Scams

&ldquoBe part of one of America&rsquos Fastest Growing Industries. 
Be the Boss!
Earn thousands of dollars a month from home!&rdquo

Ads like this are everywhere &mdash on telephone poles, in your newspaper and e-mail and on your favorite websites. Although the jobs are different, the message is the same&mdashyou can earn a great living working from home, even in your spare time.

Some even promise a refund if the &ldquojob&rdquo doesn&rsquot work out. If you&rsquore like many people, you&rsquore probably thinking, &ldquoWhere do I sign up?&rdquo But what you really should do is run, not walk, as far away from these ads as you can get.

The reality is most of these jobs are scams. The con men or women advertising them may get you to pay for starter kits or certifications that are useless. And they might even charge your credit card without permission.

One of the most well-known work-at-home scams involves stuffing envelopes. The ads say that if you pay a &ldquosmall fee&rdquo like $99, you&rsquoll learn how to earn lots of money stuffing envelopes at home. But all you get for your money is a letter telling you to scam your friends and relatives the same way you were scammed by getting them to buy the same envelope stuffing &ldquoopportunity.&rdquo Sticking it to them is the only way you&rsquoll ever see any return on your investment.

Overweight? Have I got a deal for you.

Well, maybe not me, but scammers who promise that they&rsquoll help you lose weight if you pay them a small fee. They&rsquoll try to sell you bogus weight loss products like a patch containing kelp you wear that will make you lose weight, or a pill that will not only help you lose weight, but will also reverse the aging process. If you bite on one of these scams, the only thing you&rsquore going to lose is your hard-earned dough.

The Nigerian Scam

Unless you live in a cave or on the moon, you've probably heard about this one. Here&rsquos how it works:

The scammer emails you claiming to be a Nigerian official, businessperson or the surviving spouse of a former government official. He or she offers to transfer millions of dollars into your bank account in exchange for a fee&mdashin this case, not a small fee, either. If you respond to the initial offer, you might even receive &ldquoofficial looking&rdquo documents. Then the scammer asks you to provide a blank bank letterhead, your bank account numbers, and some money to cover transaction and transfer costs and attorney&rsquos fees.

Of course, you&rsquoll lose your money and you&rsquoll never see a dime of those promised millions. [Online Phishing Scams Get Personal]

Salting the Gold Mine

This is an oldie but a goodie. In the olden days, dishonest mine owners would put a few gold nuggets in worthless mines to convince prospective buyers the mines contained a ton of gold and get them to buy their claims. As the story goes, some old-time scammers even used to fire shotguns loaded with gold dust into the sides of the mines.

900 Phone Number Scam

You get a telephone call or a notice in the mail notifying you that you&rsquove won a sweepstakes or a lottery. But to claim your prize you have to call a 1-900 toll number.

As you listen to the lengthy message you&rsquore racking up significant charges that will go straight into the scammers&rsquo pockets. These charges will then appear on your monthly phone bill and you&rsquoll be on the hook for them. Oh, I forgot to mention. You really didn&rsquot win the sweepstakes or the lottery.

This is a low-tech version of the recently discovered Trojan malware virus directed in smartphonesrunning Google&rsquos Android operating system. Once installed on the phone, the Trojan begins sending text messages, or SMS messages, to premium rate numbers &mdash numbers that charge a fee &mdash without the owners&rsquo knowledge or consent, taking money from users&rsquo accounts and sending it to the cybercriminals.

Money Order Overpayment Scam

The scam begins when a con artist answers a classified ad or auction listing, offering to buy the item for sale and pay for it with a money order. Then he comes up with a reason for sending a money order for more than the purchase price for the item. The scammer then asks the seller to wire back the difference after the money order is deposited and &ldquosupposedly clears.&rdquo

Because the money order looks very real, the bank typically accepts it as legitimate. Unfortunately, the money order is fake and the seller is liable to the bank for the entire amount. He also loses the money he sent the scammer and the item he sold.

The Ponzi Scheme

One of the biggest swindlers in U.S. history, Charles Ponzi&rsquos name is associated with the Ponzi &ldquopyramid&rdquo scheme &mdash you know, the one allegedly used by Wall Street&rsquos Bernard Madoff to defraud unsuspecting investors out of $65 billion.

In the 1920s, Charles Ponzi tricked thousands of New England residents into investing in a postage stamp speculation scheme. At that time the annual interest rate for bank accounts was just 5 percent, but Ponzi promised investors that he could provide a 50 percent return in 45 days and a 100 percent profit in 90 days.

Initially, Ponzi bought a small number of international mail coupons to support his scheme, but then he used money from later investors to pay off his earlier investors. In his heyday, Ponzi made millons of dollars but he ended up broke and in prison.

After writing about all these scams, I guess it bears repeating: If it seems to good to be true, it probably is.

Linda Rosencrance has written about crime and security for Boston-area newspapers. She has written about cybercrime and cybersecurity for Computerworld and TechNewsDaily. She is the author of four true crime books &ldquoMurder at Morses Pond," &ldquoAn Act of Murder,&rdquo &ldquoRipper" and "Bone Crusher."

The “Dollar Store”

In the 1880 census, Benjamin Marks listed his occupation as “gambler.” That was true enough, but it obscures the many guises of his trade, including card shark, horse-track bettor, and casino owner. But he earned a place in history books for apparently inventing the idea of a crooked “Dollar Store.”

This frontier town fixture posed as a typical shop, yet no one bought anything. Rather, they were tempted into the back for a little hand of cards: three-card monte games. While most dealers set up tables on the street, Marks and his descendants had actual storefronts.

Starting in Cheyenne, Wyoming, he moved to Council Bluffs, Iowa, where he established a legal casino in town and hosted card games (and prostitutes) in his riverside home. Investigators later counted millions of dollars of ill-gotten gains.

Centennial Technologies (1996)

In December 1996, Emanuel Pinez, the CEO of Centennial Technologies, and his management recorded that the company made $2 million in revenue from PC memory cards. However, the company was really shipping fruit baskets to customers. The employees then created fake documents as evidence that they were recording sales. Centennial's stock rose 451% to $55.50 per share on the New York Stock Exchange (NYSE).

According to the Securities and Exchange Commission (SEC), between April 1994 and December 1996, Centennial overstated its earnings by about $40 million. Amazingly, the company reported profits of $12 million when it had lost approximately $28 million. The stock plunged to less than $3. Over 20,000 investors lost almost all of their investment in a company that was once considered a Wall Street darling. Pinez was found guilty on five counts of securities fraud, including insider trading and booking bogus sales of fictitious products to increase reported revenue.

8 James Frey's A Million Little Pieces

Writer James Frey rocked the literary establishment and shamed Oprah Winfrey when it was discovered that his 2003 best-selling memoir A Million Little Pieces was really a million little lies. Frey’s book was released as a factual memoir, a confessional that recounted his battle with drug and alcohol addiction and skirmishes with the law. A Million Little Pieces was a New York Times bestseller, Oprah selected it for her Book Club, and Frey was the toast of the literati. Only Frey’s book was more of a work of fiction than a factual memoir. In 2006, The Smoking Gun revealed inaccuracies, lies, and embellishments in the book. Frey hit the media circuit, including Oprah’s couch, to apologize for the scam.

1. The original Aunt Jemima came from a caricature on a vaudeville advertising lithograph

Aunt appeared as a means to address enslaved older Black women in the American South prior to the Civil War, as did Uncle for their older male counterparts. Younger Black people considered it a term of respect at the time. Black people were denied the courtesy titles of Mrs. and Mr. The term continued in use following the Civil War, no longer deemed respectful. Following Reconstruction and the onset of the Lost Cause Period, the terms became stereotypes for the so-called contented slaves of the antebellum plantations. Ben was a common name for Uncles, though Tom was avoided because of the negative connotations indicating a docility toward their masters. In 1875, Billy Kersands, a popular Black minstrel and comedy performer, wrote a song entitled Old Aunt Jemima. Some say Christopher Rutt attended a performance of a minstrel show in which the song was performed by a character presenting the image. Others claim he lifted it directly from an advertising poster.

Regardless, the image was already a stereotype by 1889. The stereotypes included a large, buxom Black woman, wearing a kerchief covering her hair, with a wide bright smile and a constantly upbeat attitude. An apron also appeared on the character. Similar &ldquoMammies&rdquo appeared in plays, minstrel shows, magazines, and books of the period, many of them sharing the name Jemima, often shortened to just Mima. They all depicted the same image, that of a slave more than happy with her lot in life, and a cook of what later became known as comfort foods. The Mammy character continued more or less the same for decades, though as will be seen, the name Aunt Jemima became trademarked and its use largely prohibited to anyone besides the Aunt Jemima Mills.

Built on Sand: The Get-Rich-Quick Scams of 1920s Florida

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The Florida Boom of the 1920s and How It Brought On the Great Depression
By Christopher Knowlton

In 1925, some 7,000 people seeking a new life and perhaps a new fortune entered Florida each day. In Massachusetts alone, owners of more than 100,000 bank accounts used their savings to invest in Florida land. Deposits in Florida banks increased 400 percent in three years. Ohio politicians were so shocked by the size of the wave of cash flowing southward that they banned Florida real estate firms from doing business in their state.

Will Rogers, who was good at analyzing this sort of thing, knew there was a simple explanation. Speaking of his friend Carl Fisher, the Kubla Khan of Miami Beach, Rogers said, “Carl discovered that sand could hold up a real estate sign.”

Sand, that is, that’s been enriched with large supplements of hype and hubris, then put in the service of greed. That’s the subject of Christopher Knowlton’s “Bubble in the Sun: The Florida Boom of the 1920s and How It Brought On the Great Depression,” which, subtitle notwithstanding, does not remotely make the case that the Florida land boom of the 1920s “brought on the Great Depression.” (Knowlton, in fact, effectively disavows the assertion himself, so I’ll blame an overweening publisher for the misleading subtitle.) But the book does offer a story that, though often told before, is worth the spirited retelling Knowlton brings to it.

His characters are a writer’s dream. There’s D. P. Davis, who in 1924 sold 300 building lots in Tampa Bay in three hours — while they were still underwater — and who remarried his first wife because, his brother said, he wanted to make his mistress jealous. There’s Barron Collier, who developed 1.2 million acres of southwest Florida that made him, if you could believe the price tags he put on them (and many thousands did), richer than John D. Rockefeller. The impresario who built Coral Gables, George E. Merrick, hired a publicist who would describe him as a brilliant artist who used “wood and steel and stone” to “paint his pictures upon a canvas of spacious fields, cool groves and smiling waterways.” The society architect Addison Mizner spun a fairyland of neo-Spanish castles in Palm Beach. His con man brother Wilson prophetically said, “Easy street is a blind alley,” and not much later the two of them found themselves stumbling along its darkened length.

To me, though, Carl Fisher (who put that sign in the sand) is the paradigmatic character in the Florida saga. Fisher came out of the fringes of the automobile business. He built the Indianapolis Speedway, initiated the idea of the first transnational highway and made his first fortune manufacturing headlights before seeking a second one on a dredged-out slice of Biscayne Bay. When Warren G. Harding came to play golf in Miami Beach, Fisher provided a small elephant to serve as the president’s caddy, an unbeatable photo op in a decade that wasn’t wanting for competition. His advertisements spread cheesecake photos (the term itself coined by Fisher’s publicist) of women in bathing suits across the country. One bore the caption, “Turalura Lipschits and Her Twin Sister Tondalaya Are in Miami Beach Enjoying Seventy-Eight-Degree Sunshine on December 21!” But even more enticing than the shapely Lipschitses and Miami’s balmy skies was the lure of quick riches, a lure Fisher set with his 1919 decision to raise prices on the land he was peddling by 10 percent — and his simultaneous assertion that he would raise those prices by the same amount annually. “In trying to stoke a small fire,” Knowlton writes, Fisher instead provided fuel for “a conflagration.”

Other metaphors are available: “The smell of money in Florida, which attracts men as the smell of blood attracts a wild animal, became ripe and strong last spring,” wrote Gertrude Matthews Shelby, sent south by Harper’s Monthly to chronicle the boom. Though “inclined to scoff” at the grand claims of instant riches, she soon put down her notebook and “succumbed to the boom bacillus.” Shelby pocketed the 2019 equivalent of $190,000 in one month of buying and selling undeveloped land — “not much,” she concluded, “but a lot to a little buyer on a little bet.” Today, what Shelby did would be called “flipping” in 1920s Florida, where there was always a new victim wandering into a speculator’s cross hairs, it was called “reloading.”

Knowlton is not the most sure-footed of anecdotalists. Especially in his opening chapters, the reader is too often led to the edge of a telling revelation only to find nothing there: “In fact,” he writes of Fisher, “one of his two wives would recall that he was nearly as nimble with his feet as with his hands.” The next sentence only tells us he wore horn-rimmed glasses. But once Knowlton gets to the bubble’s inevitable puncture, the sheer gravitational pull that eventually grounds all speculative balloons exerts its irresistible power. Ambition morphs into mendacity, the profit motive becomes avarice.

At one point, as national magazines began to expose the worst of the fraudulent real estate rackets, the industry fought back with an event called “The Truth About Florida,” which was exactly the opposite. The luminaries who traveled to New York to make the case that Florida’s real estate market wasn’t speculative at all included its governor, its leading newspaper publishers and a phalanx of at-risk developers and overextended bankers — “the very men,” Knowlton writes, “who were most culpable in creating the speculative boom in the first place, a boom that they now insisted didn’t exist.” The truth squad, their faces straight, said the bad press the state was getting was nothing more than “Northern propaganda” (another, latter-day, sometime Floridian would have called it “fake news”). There was nothing to worry about.

Collapse arrived just three months later. Newspapers once brimming with real estate ads now gave their dwindling space to a different kind of content. Before the bust, one day’s Miami Daily News had run to 504 pages and weighed as much as a healthy baby just two years later, in 1927, a single edition of another Florida daily carried 41 pages of tax delinquency notices. In time, nearly 90 percent of Florida’s municipalities were compelled to default on their bonds. Overleveraged banks collapsed. Empty lots stretched across mile after mile of unbuildable land. The developer Walter P. Fuller offered the not-quite-last word in a memoir published nearly three decades later: “We just ran out of suckers.”

The one great weakness of “Bubble in the Sun” is the absence of those suckers. Entirely missing are the hapless (or, if you prefer, foolish, or credulous, or maybe just plain greedy) individuals who climbed aboard the bandwagon — earnest dreamers who thought they were buying a retirement haven on a beach but ended up with a patch of fetid swamp small-time speculators who made some fast money, then crashed while reaching for yet more the thousands upon thousands you can find lingering at the finishing line of any speculative mania, left holding nothing but scraps of worthless paper.

But in the long run, they were not the only losers. That’s why Walter Fuller decided to amend his comment on the shortage of suckers. “That isn’t quite correct,” he said. Pondering his own world of developers and promoters and fellow-traveling bankers and corrupt officials, he said, “We became the suckers.”

Many paid for their sins, largely through crippling alcoholism, personal bankruptcy and extreme public humiliation. Addison Mizner was broke by 1930. When George Merrick of Coral Gables died at 55, he left an estate of $400. In the late 1930s, an associate encountered Carl Fisher loitering on a park bench in Miami Beach. “I’m a beggar — dead broke,” Fisher said. “No family to fall back on.”

Overall Summary

Carlson puts a spotlight on the scams that stand out in history, breaking down the events and wrapping up the stories in neatly defined independent chapters. This allows the reader the option to skip ahead to the stories that they find most interesting.

From the story of Ivar Kreuger, the Match King from Sweden, to the devastating impact of Bernie Madoff’s multibillion dollar Ponzi scheme - readers have their pick of some of the most despicable con artists to ever live.

Beyond being a good read on some of history’s most notorious bad guys, Don't Fall For It also delves into the reasons why people buy in to seemingly obvious scams. And it also shows how these scams have been able to dupe a wide cross-section of society -- including the rich and famous and even sitting presidents!

Top 15 Get Rich Quick Schemes That You Should Stay Away From

Of course everyone wants to make easy money at home. Who wants to commute for an hour one way to a job in a major city? The answer is no one, but that is usually where the jobs are located in some areas of the country. Most people bristle at having to spend more money on gas and car expenses because of commuting to work in another city or state, when the expenses noted at the end of the year trump the sum total of the national debt. For these reasons and more, who wouldn’t want to earn money “the easy way.”

Unfortunately, many get rich quick schemes are really too good to be true. They are scams, and they are often meant to humiliate, embarrass and steal the identity of the person being scammed. They target definite vulnerable demographic segments of the population, such as the elderly or disadvantaged. And as bad as this gets, they also trick highly educated and Internet savvy people too into believing that they can make money fast on these programs. Below are twenty of the most popular get rich quick schemes to avoid.

1. Internet business opportunities

Be careful here because if they require down payment to become a “partner” the person paying the fees could be stuck being liable for a business which is later sued on various merits unknown to the new “investor.”

2. High Yield Investment Programs

into with people who are not willing to meet face to face. While these are often risky investments, many of them are Ponzi schemes so be careful when someone suggests you jump on board the next hot thing.

3. Microcap Scams with Penny Stocks

These are securities sporting low prices issued by small companies which guarantee big returns. Many people invest in them because they find a tip telling them to buy the stock on a forum or investment blog. Truth is, many of these tips are plants meant to drive the price of the stock up so that initial investors, scammers, make money. Investigate any company before investing in them.

4. Buying real estate and “flipping” a home DIY style

Some people made quite a bit of money flipping houses, others lost everything. Make sure the market in the area being considered for the flip has actually rebounded first before buying a foreclosed home or one on short sale for the best chance of seeing real returns on resale.

5. Investing in a company when a sales rep has secret inside information

The movie Wall Street was based on this concept and it is the very thing that Martha Stewart went to jail for. Information that comes from insiders may be illegal so do not get involved in this type of transaction without understanding the nature of the info being offered “for a price.”

6. Stuffing envelopes at home

This includes writing letters, backing envelopes or other envelope jobs from rogue companies which offer pennies (or even a tenth of a penny) on the dollar for each envelope “stuffed.” It will take thousands to make any money and this usually results in the person paying for the privilege of working for a few dollars a day.

7. Books/Seminars/Conferences/Webcasts

Which promise you’ll earn big in real estate/marketing/business/the stock market understand that these people make their money up front by taking payment for the people who attend the conference or meeting. What they say after you have paid for your ticket does not matter and in many cases are complete fabrications on the truth of what happens in that particular industry.

8. Ponzi schemes

The name Bernie Madoff might immediately come to mind, there are other Ponzi schemes to watch out for. Traditional Ponzi schemes take money to one investor to provide returns for another while lining the pockets of the scam artist. Eventually, the money is gone and investors lose out.

9. Selling magnetic “power bracelets” to people in your community who play sports

These have not been uniformly proven to enhance performance so don’t push them on friends, neighbors and family members just yet. You may be stuck with boxes of inventory (bracelets) and no outlet to sell them off to others at the end of the day.

10. Pyramid schemes

These include any scheme where you buy something, are encouraged to get 12 more people “under you” to do the same and you have to encourage them to each bring in 12 more people. Remember, you are never going to really be on the top of this mountain, you are only one of 12 people someone else brought in and will never get much money from this effort (but you may lose some friends over it).

11. Getting paid for Pay Per Click ads online

Understand that these ads are going to make someone rich, but it is not the person who is not owning the website. If you are a writer of a blog and have PPC ads, you will see pennies on the dollar as a result of your creative effort and the webmasters usually put the ads on which they prefer, not which you would rather see adjacent to your content.

12. Getting paid to write reviews online

These include book reviews, reviews of movies or restaurants or the like will never pay out big money in the long or short run. This is because the reviewers are offering their opinion and some never even see the movie, so the reviews are inaccurate and are paid accordingly.

13. Mystery shopper

Mystery shopper sounds like a great job so there are a plethora of websites that promise to help you get started in this field. However, these sites sometimes make the person interested in doing this part time job buy a list of which stores offer the service locally, so you spend money before you can even make money.

14. Putting together jewelry or “hand work” at home

These jobs offer the chance to work from home putting together jewelry or furniture and never pay well enough to make it work it to do the service of assembling items for someone else who will make good money once the materials are sold to others.

15. Online writing jobs which ask for your personal information in exchange for up front advances for work to be performed in the future

If this sounds too good to be true, it usually is. For this reason and others, no one should ever be given your social security number even if the “employer” claims that he needs it to fill out the appropriate tax forms for your services rendered online. Any online writing job should be verified or it may be a scam where the identity thief is the one who gets the bonus at the end of the assignment, not the writer.

10 Of The Biggest Scams Ever In History

Since the time people started using money, there have been numerous cases of scams and frauds. History shows that scammers are expert in preying on people’s gullibility. But even after stealing millions, the future for these people does not bode well, and usually, their frauds are exposed. In this article, we have collected the 10 biggest scams in history which left the investors penniless and sometimes even destroyed entire economies.

1. In 1996, a Canadian mining company, Bre-X, announced a huge discovery of gold, and in the process went from a penny stock to $280 per share, with a total value of $4 billion. In reality, it was all a fraud and the lead geologist was shaving off gold from his wedding band to add to drill-core samples.

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During the late 1990s, geologist John Felderhof believed that a property near the Busang River in Indonesia would produce gold after mining. At his advice, David Walsh, the founder of Bre-X Minerals Ltd., bought the property. The project manager of the gold mining project was Filipino geologist Michael deGuzman. When deGuzman tested the initial samples, he didn’t find any trace of gold, so he shaved off some gold from his wedding band, added it to the samples, and declared the first estimate of the total find to be about 62 metric tons.

The news of the presence of gold in Bre-X’s property soon spread like wildfire. The company claimed that it was going to be the richest gold mine ever discovered. Mining investors rushed to invest and the stock price of Bre-X started climbing, and it rose from pennies to $280 per share.

Michael deGuzman kept on salting the samples, and that worked until 1997. In 1997, the Indonesian government got involved, and from February 1997, the evaluation of the site began. In March 1997, deGuzman committed suicide by jumping from a helicopter. Bre-X and its mine’s reputation started going downhill from then on. On March 26, 1997, an American firm announced that its core sample collected from Busang contains a negligible amount of gold. As a result, the Indonesian government postponed signing the mining deal with Bre-X. Stock prices began to fall, and thousands of investors lost billions. TSE and NASDAQ suspended trading of Bre-X stock, and it went bankrupt on November 5, 1997.(1,2)

2. Founded in 1985, the Enron Corporation claimed revenues of nearly $101 billion during 2000 and employed approximately 20,000 staff. But the real value of the company was exposed at the end of 2001, after which the company was declared bankrupt. Enron was responsible for wiping out over $78 billion in stock market value.

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The American company Enron came into focus after 1996 when it began reporting a steady increase in its sales each succeeding year. From 1996 to 2000, the sales of Enron was reported to increase from $13.3 billion to a staggering $100.8 billion. It was declared as “America’s Most Innovative Company” by Fortune magazine for six consecutive years. But at the end of 2001, the actual financial condition of Enron was revealed. The report stated its accounting fraud, also known as the “Enron Scandal,” and the company filed for bankruptcy in 2001.

The Enron Scandal revealed the loopholes in accounting rules in America. The company used to book revenue from huge energy-derivative contracts at their gross value instead of their net value. Basically, Enron served as a middleman on deals. It would put together a seller with a prospective buyer and take “delivery” of the contract. Then it would book the entire “sale” as its own revenue. This was made possible due to a loophole in the procedures approved by the Financial Accounting Standards Board (FASB). According to the board, each company had a “free option” as to how to account for the deals of energy contracts.(1,2)

3. In 1821, a Scotsman, Gregor MacGregor, invented a fictional Central American republic called “Poyais” and convinced hundreds of people in his home country of Scotland to invest in the nonexistent country, and even oversaw the deployment of a ship of 250 people hoping to start a new life in Poyais. When their ship arrived, they found nothing but undeveloped, inhospitable jungle.

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Gregor MacGregor was born in 1786 at Glengyle, Scotland. He carved out a place for himself in history by pulling off one of the biggest frauds of the early 19th century, gaining over £200,000 in the process. In the early 1820s, McGregor invented an entirely fictional country and named it “Poyais” He claimed it was located near the Black River in what is now present-day Honduras. McGregor claimed that Poyais covered eight million acres, and he was the prince of this land. He also claimed that the land was rich in natural resources but required manpower to turn it into a developed country.

MacGregor began an aggressive campaign to make people believe in his fictional country. He printed advertisements and leaflets and gave interviews in national newspapers. He even had Poyais-related ballads composed and sung. In mid-1822, a 355-page Poyais guidebook was being sold in London and Edinburgh which contained elaborate maps and details about this fictional country. The official-looking book convinced many people, and they started buying Poyaisian land certificates. By early 1823, about 500 people had bought Poyaisian land.

After that, McGregor began making arrangements to send interested people to Poyais. On 10 September 1822, a vessel with 70 emigrants on board sailed towards the non-existent country. Later, on 22 January 1823, another vessel sailed with almost 200 emigrants aboard. Upon reaching the land which was they believed to be Poyais, the emigrants realized they have been duped. Few travelers were able to return, and most of them died due to diseases like yellow fever and malaria.(1,2)

4. In the early 1990s, the infamous Italian criminal Charles Ponzi scammed investors out of about $7 million by passing on new investors’ money to existing investors and presenting it as a sustainable investment.

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In the summer of 1919, Charles Ponzi was living in Boston. The idea for a scam began forming in his mind when he received a letter from a Spanish company. The letter contained an international reply coupon (IRC). This coupon could be redeemed by the recipient for postage to the sender’s country. Ponzi realized that he can buy the coupon in one country and then exchange them for postage in another country with a higher value of postage. Soon, he set his plan into motion, but he required a large amount of capital to buy the IRCs with cheap, European currencies.

To raise the money, he went to his friends and promised them double returns in 90 days. Some people invested and they got the interest as promised. In January 1920, Ponzi opened his own company to promote this scheme. In the beginning, 18 people invested. They got the promised interest the next month. As word spread about this unbelievable scheme, investments started pouring in.

By June 1920, the net total investment in Ponzi’s scheme rose to $2.5 million. People began mortgaging their homes and even invested their life savings in the scheme. But no one realized that Charles Ponzi was paying the earlier investors with the money invested by new investors. Ponzi’s rapid rise drew suspicions, and his publicity agent found incriminating documents related to the scam. The agent wrote an article for the Boston Post which brought Ponzi’s scam into public view. From then on, things went downhill for Charles Ponzi, and his investors lost about $20 million. In November 1920, Ponzi was sentenced to five years in prison.(1,2)

5. After buying the financial institution Lincon Savings and Loan Association, Charles Keating began investing savers’ cash in high-risk ventures without informing the depositors. The scam was revealed in 1989 after the business failed leaving thousands of elderly investors with worthless bonds.

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Charles H. Keating was a champion swimmer, activist, lawyer, banker, and real estate developer. But the thing he is most known for is his role in the savings and loan scandal of the late 1980s. Charles Keating became the head of Lincoln Savings and Loan Association in 1984. Immediately after joining the enterprise, he fired the existing management. During those times there were quite loose restrictions on banking investments. Taking advantage of this opportunity, Keating began investing depositor’s money in high-risk investments. For the next four years, Lincoln’s assets increased. It rose from $1.1 billion to $5.5 billion.

In 1989, Lincoln Savings’ parent company, American Continental Corporation, went bankrupt. The day after American Continental Corporation went bankrupt, Federal authorities seized Lincoln Savings. The scam left 23,000 customers with worthless bonds.(1,2)

6. In 1925, a Portuguese named Alves dos Reis forged a government contract authorizing him to print money and “officially” printed himself 100 million escudos, the equivalent of 0.88% of Portugal’s GDP at that time, leading to the “Portuguese Bank Note Crisis.”

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In 1924, Alves dos Reis was in jail for embezzling money from a company. During his 54-day stay in jail, he planned a scam which later came to be known as the “Portugal bank note affair.” After being released from jail, Reis forged a contract in the name of the Central Bank of Portugal, Banco de Portugal. Then he posed as a representative from the bank and convinced a London-based company that the bank had authorized him to print his own bank notes. Reis further claimed that the money they were going to print was a part of a secret project, and it would be used to financially aid a struggling Portuguese colony, Angola.

According to Reis’s instructions, the London-based company printed an equivalent of £1,007,963 of bank notes. The notes were then circulated into the Portuguese economy. In June 1925, he created the Bank of Angola & Metropole to help Angola. He even went on to buy the controlling interest in the Bank of Portugal following which he hoped he would be able to successfully hide his scam. But the low-interest rates of the Bank of Angola & Metropole piqued the interest of journalists, and they raised questions. Finally, the Bank of Portugal noticed the bank notes with duplicate serial numbers, and Reis’s scam was exposed. Five years later, he was sentenced to 20 years in jail.(1,2)

7. In the 1920s, Ivar Kreuger, who owned banks, film companies, newspapers, mines, telephone companies, and railways, decided to form a monopoly to control all the world’s safety matches. International banks begged him to let them invest, not knowing that his many companies existed only on paper, profitable only because they were invested in each other.

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The Swedish civil engineer Ivar Kruger began his career by helping in building New York’s Plaza Hotel and other landmarks. After gaining experience, he opened a company in Sweden in 1908. His company soon became the best construction firm in Sweden. Then Kruger took over his father’s match business. In 1917, he founded the Swedish Match Company. In the post-depression era after WWI, Kruger began to acquire match-making factories around Europe.

From 1925, Kruger began offering loans to insolvent countries at a bargain that was hard to refuse. He would also provide loans to countries that offered him a national monopoly on match production. Using his skills, he increased the sales in the country. Since the governments taxed matches, the increase in sales would increase tax revenues used to repay the loans. By 1931, the Swedish Match Company controlled 250 factories in 43 countries. But his empire collapsed during the Great Depression. On 12 March 1932, he committed suicide by shooting himself.

The death of Kruger led to the “Kreuger crash.” It hit investors and companies all over the world, especially in America and Sweden. After his death, Kreuger’s forgery of Italian bonds amounting to $142 million was found out. In Sweden, Kruger owed more than the country’s national debt. As a result, the suicide rate increased in Sweden and the prime minister fell. In America, his shares collapsed taking with it the life savings of thousands of people.(1,2)

8. Nigerian scammer Emmanuel Nwude once sold a fake airport to a major international bank for $242 million, and the scam wasn’t discovered until 3 years later.

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Emmanuel Nwude is a Nigerian fraud artist who was formerly the Director of Union Bank of Nigeria. In 1995, he defrauded a Brazilian man, Nelson Sakaguchi, who was the Director at the Brazil’s Banco Noroeste. Nwude began his scam by impersonating the then Governor of the Central Bank of Nigeria, Paul Ogwuma. Posing as the governor, he convinced Sakaguchi to invest in a new airport located in Nigeria’s capital, Abuja. In exchange, he asked for a $10 million commission.

The fraud remained undetected until 1997 when a Spanish bank decided to take over the Banco Noroeste Brazil. When an official from the Spanish bank enquired about the large sum of Noroeste’s money which was sitting in the Cayman islands unmonitored, it led to a criminal investigation. It was found that Sakaguchi had paid $242 million in between 1995 to 1998 to Emmanuel Nwude who promised him an airport which actually never existed.(source)

9. When “Count” Victor Lustig discovered that the famous Eiffel Tower was in need of repairs, he faked some government papers and sold the tower to scrap metal dealers twice with a total of over $200,000 in bribes to throw the multi-million dollar contract their way.

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Victor Lustig began his conman career through a “money-printing machine.” The machine would produce a counterfeit bill of $100. His client would buy the machine for a high price believing that it would provide them with huge profit in the future, but the machine would produce $100 bills only for the next 12 hours after which its supply became exhausted resulting in blank notes. By the time the person realized the scam, Lustig was long gone.

Lustig’s sale of Eiffel Tower began in 1925 when he read about a repair and maintenance of the tower in a newspaper. He invited six scrap metal dealers and posing as a government official said that Eiffel tower would be taken down. Then he asked them to submit a bid and finally secured a deal with one of the dealers. For finalizing the deal, scrap dealer Andre Poisson offered a large bribe and secured the deal. After receiving the money, Lustig went away and Poisson was too embarrassed to lodge a police complaint. A month later, Lustig returned back to Paris and repeated the same trick. His second victim went to the police, but Lustig evaded arrest.(source)

10. From 1997 to 2002, over 4,000 people paid an advance fee in order to receive new cars at a fraction of their value. The cars supposedly came from the estate of a wealthy Christian man according to his will. The scheme took in over $ 21 million, but neither the deceased, his alleged will, an estate of any kind, or the cars ever existed.

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The “miracle car scam” began with a story circulated by a man named Robert Gomez who claimed that he was the adopted son of John Bowers, a wealthy executive of a food company. Three years later, just before Christmas Bowers claimed in his church that he is now the heir of Bowers’ estate which is valued at $411 million. He also said that Bowers had instructed in his will that a fleet of 16 luxury cars would be given to fellow believers as a “gift.” The beneficiary needed to pay an amount of roughly $1,000 to $1,100 as a conveyance fee for each vehicle. The news spread through word of mouth and many church members showed interest in the deal. People started depositing the conveyance fee, and in a course of four years, from 1997 to 2002, 4,000 people deposited the advance fee.

The staggering number of car sales aroused suspicion, and an investigation was launched. Investigators found out that a man called John Bowers, as described, never existed and neither did his estate or cars. It was also revealed that in 2002, Gomez, along with his accomplice, had collected $21.1 million from people. In 2003, he was sentenced to 21 years and 10 months in federal prison.(source)

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