Have you ever heard about a car that promised to be super efficient but never actually hit the roads? Back in the 1970s, during a big fuel crisis, there was a car called the Dale that was supposed to be the answer to everyone’s problems. It had three wheels and claimed to get 70 miles per gallon. This car was the idea of Geraldine Elizabeth Carmichael, who told investors she was the widow of a NASA engineer and a mother of five. In reality, she was a fugitive involved in counterfeiting.
Carmichael managed to create a few prototypes of the Dale, and one even appeared on the game show “The Price is Right.” People were excited and placed hundreds of orders. However, during a test drive meant to attract Japanese investors, things fell apart. Without the money to actually produce the car, Carmichael disappeared with the investors’ cash. Her story was featured on “Unsolved Mysteries,” and she was eventually caught.
Have you ever heard of a Ponzi scheme? It’s named after Charles Ponzi, who moved from Italy to the U.S. in the early 1900s. He lost his savings on the journey over and tried various illegal ways to make money, which landed him in jail a few times. Eventually, he came up with a scheme involving international postal reply coupons. These coupons could be bought cheaply in countries with weak economies and exchanged for more valuable stamps in stronger economies, supposedly making free money.
Ponzi convinced people to invest in his company, promising them a 50% return in 90 days. It seemed too good to be true because it was. He used new investors’ money to pay back earlier ones, pocketing the rest. The scam collapsed when it was revealed that Ponzi would have needed to move an impossible number of postal vouchers to make the money he claimed. He was charged with mail fraud, and now any scam that pays old investors with new investors’ money is called a Ponzi scheme.
Another old trick is “salting” a mine. This involves adding valuable materials to a mine to trick buyers into thinking it’s full of riches. During gold rushes, some people would sprinkle gold dust in a mine to make it seem valuable, sell it, and then leave town before the buyers realized they’d been duped. Some even used shotguns to blast gold shavings into the rock to make it look real. This scam isn’t just history; a similar scandal happened in the 1990s involving fake gold deposits in Indonesia.
Imagine buying a famous bridge! In the past, con artists like George C. Parker sold the Brooklyn Bridge multiple times. Parker forged documents to “prove” he owned the bridge and sold it to people who thought they could make money by charging tolls. He also “sold” other landmarks like the Statue of Liberty. It’s surprising that people fell for these scams, but they did.
Mail fraud might not sound exciting, but it can be very profitable. For decades, people with the last name Baker were told they could claim part of a fictional fortune from a man named Jacob Baker. They paid money to stake their claims, but Jacob Baker never existed. This scam lasted nearly 70 years and made millions. Another con artist, Oscar Hartzell, convinced people they could claim a fortune from Sir Francis Drake. Even after Hartzell was arrested, some victims still believed in the scam.
In 1888, a con artist pretended to be a priest named Father McCarthy. He tricked jewelers into bringing valuable gems to him, claiming they were gifts for a cardinal. Dressed as a priest, he would take the jewels into another room and sneak out the back, never to be seen again.
Victor Lustig was a notorious con artist who famously sold the Eiffel Tower twice. He also ran a successful counterfeit money operation. Before he died, he wrote down his “ten commandments” for con artists, which included tips like never looking bored and letting others reveal their beliefs first. Lustig’s life sounds like something out of a movie!
These stories show that scams and cons have been around for a long time, and they continue to evolve. It’s always important to be cautious and skeptical of deals that seem too good to be true!
Work in groups to create a short skit about one of the scams mentioned in the article. You can choose the story of the Dale car, the Ponzi scheme, or any other scam. Focus on the key events and characters involved. Perform your skit for the class, highlighting the main elements of the scam and how people were deceived.
Using the information from the article, design a poster that warns people about common scams and how to avoid them. Include tips on recognizing scams and what to do if you suspect a scam. Use visuals and catchy slogans to make your poster engaging and informative.
Choose a modern scam that is not mentioned in the article and research how it works. Prepare a short presentation for the class, explaining the scam, how it compares to the historical scams in the article, and what people can do to protect themselves. Use visuals or a slideshow to enhance your presentation.
Imagine you are a victim of one of the scams from the article. Write a diary entry describing your experience, how you were deceived, and your feelings about the situation. Share your entry with the class and discuss the emotional impact of being scammed.
Divide into two groups and prepare for a debate on whether scams today are more sophisticated than those from the past. Use examples from the article and your own research to support your arguments. After the debate, discuss as a class how technology has changed the nature of scams.
Here’s a sanitized version of the transcript:
—
Have you ever seen this slick vintage car while cruising down the street? No? Well, that makes sense since they never really made it onto the road. But you never would have guessed that based on the ads that ran for the car at the height of the 1970s fuel crisis. The Dale was supposedly a maximum efficiency car that sported three wheels and promised 70 miles per gallon. It was the brainchild of Geraldine Elizabeth Carmichael.
To investors, Carmichael claimed she was the widow of a NASA engineer and a mother of five. In reality, she was a wanted fugitive with ties to a counterfeiting operation. Hi, I’m Justin Dodd, filling in for Aaron this week on the List Show. Carmichael did make a few prototypes of the car, and one was even featured on “The Price is Right.” Hundreds of orders poured in, and all was looking pretty great. Then came an ill-fated test drive intended to raise money from Japanese backers. With no funding to actually produce the car, Carmichael eventually went into hiding with the investors’ money. The story of her disappearance was featured on an episode of one of our favorite shows, “Unsolved Mysteries,” and she was arrested shortly after.
I’ve said it once and I’ll say it again: you can fool the general public, but you can’t outrun Robert Stack. The Dale is just one example of a historical scam, con, grift, lure, or trick that I’m going to share with you today. Let’s get started.
I don’t know who you have to bamboozle in order to get an entire category of scams named after you, but I suppose Charles Ponzi would be able to tell me. Ponzi emigrated from Italy to the U.S. in the early 1900s. He reportedly gambled away his life savings on the boat ride over. After a few illicit attempts at making money, more than one leading to brief imprisonment, he finally came up with the scheme that his name would eventually become associated with.
In 1920, Ponzi discovered that international postal reply coupons, which are essentially a form of prepaid postage, could be purchased in exchange for 5 cents worth of U.S. postage stamps. If the coupons were bought in a country with a weak economy where they cost less money, then exchanged for a regular stamp in a country with a stronger economy, and then sold, one could eventually make free money.
Ponzi began recruiting people back in Italy to help with his scheme. His operation might never have landed him in hot water if he hadn’t been so ambitious. The trouble came when he began convincing investors to lend money to his securities exchange company, which he would then pay back plus 50% interest in 90 days. It sounded too good to be true, but that’s because it was. Most of the money was not going to buy foreign postal coupons anymore; it was going into Ponzi’s pocket, and the rest was going to pay back other investors.
The sham couldn’t stay afloat forever. The New York Postmaster said that for Ponzi to have made as much money as he claimed, he’d need to have moved about 160 million postal vouchers across borders. But at the same time, the Wall Street Journal learned that the previous year, less than 1.2 million had been issued worldwide, with a value of less than $60,000. Ponzi had stolen $20 million from his investors and was charged with mail fraud. Nowadays, any scam that functions by paying back old investors with new investors’ money is called a Ponzi scheme. Charles Ponzi didn’t invent the Ponzi scheme; he just perfected it.
Another old-timey scam is the practice of salting a mine. Salting, in this case, refers to adding valuable materials to a sample or mine in order to dupe potential buyers. This has been a fairly common practice during various gold rushes throughout history. When a single profitable gold mine could guarantee you a life of comfort, if you could convince a buyer that your mine was the Eldorado of holes in the ground by sprinkling gold dust throughout it, you could make enough money to leave town and start a new life before your marks were any wiser.
Some schemers would go as far as to load a shotgun with ore shavings and blast it into the rock surface to create a convincingly embedded wall of gold. This practice isn’t ancient history; a huge scandal in the 1990s centering on X Minerals later inspired the Matthew McConaughey movie “Gold.” It was essentially a multi-billion dollar salting operation with mystery lies and specious reports of gold deposits in Indonesia.
Selling something with an artificially inflated value is one thing, but selling something that doesn’t even belong to you is another beast entirely. Take Peaches, the fictional character played by Mae West in the film “Every Day’s a Holiday,” who sells the Brooklyn Bridge to a gullible buyer. What a hilarious concept for a silly and totally not true film! Well, it turns out someone really did sell the Brooklyn Bridge. Actually, several people sold the bridge multiple times. One con man by the name of George C. Parker forged convincing documents proving his ownership of the bridge. He would then sell it to marks who were convinced they could make a fortune charging tolls on their newly purchased bridge.
Parker also reportedly sold the Metropolitan Museum of Art and the Statue of Liberty at various points. Two other bridge scammers were Charles and Fred Gondorff, who would literally erect signs that read “Bridge for Sale” during the hours they knew police officers were not around. The most perplexing part of these stories is not that someone would have the gall to sell a city bridge, but that there would have been suckers gullible enough and sufficiently well-heeled to fall for it.
The Gondor brothers had many other cons up their sleeves, including a horse racing scam that would eventually help inspire the film “The Sting,” starring Robert Redford and Paul Newman. Though not an intentional con per se, it is worth noting that the makers of the film were sued for plagiarism by author David W. Maurer, who claimed the movie was suspiciously similar to his book “The Big Con,” a non-fiction account of early 20th-century con men. The studio eventually settled out of court.
While the phrase “mail fraud” doesn’t sound like a wild, high-intensity criminal activity, these cons have the potential to be the most profitable and wide-ranging. Take the case of the Baker estate. Over the course of several decades, countless individuals with the surname Baker were contacted by representatives of the estate of Jacob Baker of Philadelphia, a tremendously wealthy man who died while his estate was unprobated. These other Bakers were convinced that they had claims to part of this fortune, and if they just paid the representatives a fair sum of cash, they could stake those claims. These people never received their money because Jacob Baker never existed; his entire estate was fabricated. Over the course of nearly 70 years, the con raked in millions from people who happened to be named Baker.
In 1936, 28 people were indicted for what was probably the most wide-ranging case of mail fraud at the time. Then there’s Oscar Hartzell, who used similar tactics to separate people from their money in hopes of reaping some part of an unclaimed fortune. His tale’s protagonist, though, was not fictional; it was Sir Francis Drake, the famed adventurer. Hartzell convinced thousands of Drakes that they could claim some of Drake’s fortune, which, according to Hartzell, had now, with interest, grown to $100 billion. All Hartzell had to do was sue the British government—an expensive endeavor, obviously, hence the need for investments from his Drakes. His scam went on for years, and he was eventually arrested in 1933.
Somehow, this did not deter his victims. Some of the people he had swindled even sent him more money for his trial. Reportedly, even after his death in 1943, many believed in Hartzell and their claim to the Drake fortune.
What’s a good con without a good costume? An 1888 newspaper reported about a con artist who introduced himself as Father McCarthy and established himself in the local church. His con involved looking for a gift for a cardinal, picking out some choice diamonds and jewelry, and then having them brought over to the priest’s quarters. When the jeweler arrived, McCarthy would open the door dressed as a priest, of course, and bring the gems into another room to show other men of the cloth. McCarthy was in reality sneaking out a back entrance, never to be seen in town again.
Lastly, if you’re looking for some old-timey conning advice, you should turn to Victor Lustig. Lustig was one of the most notorious confidence men of the 20th century. He’s known today as the man who sold the Eiffel Tower twice because, well, I think you can guess why. He also created one of the most successful counterfeit money operations in history. Before he died behind bars, he’s said to have written down his ten commandments for aspiring con artists. Some highlights include: never look bored, wait for the other person to reveal religious or political views and then have the same ones, never boast but let your importance be quietly obvious, and lastly, never get drunk.
Lustig sounds like the perfect George Clooney in a historical prequel to “Ocean’s Eleven.” What historical con woman would you cast alongside him? Thanks for watching Mental Floss on YouTube! Let us know your favorite modern-day scam in the comments below—hopefully one that you didn’t fall for too recently. I mean, there’s only so many foreign princes out there, you know? I’ll see you next time!
—
This version removes any inappropriate or sensitive content while maintaining the overall narrative and information.
Scam – A dishonest plan or activity, often designed to trick people into giving away their money or personal information. – In history, many people fell victim to a scam when they invested in the South Sea Bubble, believing they would make a fortune.
Fraud – Wrongful or criminal deception intended to result in financial or personal gain. – The infamous Ponzi scheme is a classic example of fraud, where Charles Ponzi promised high returns to investors but used new investors’ money to pay off earlier ones.
Investors – Individuals or organizations that allocate capital with the expectation of receiving financial returns. – During the California Gold Rush, many investors funded mining operations, hoping to profit from the discovery of gold.
Money – A medium of exchange in the form of coins and banknotes, used to facilitate trade and economic transactions. – The introduction of paper money in China during the Tang Dynasty revolutionized trade and commerce.
Scheme – A large-scale systematic plan or arrangement for attaining a particular goal, often with a negative connotation. – The New Deal was a series of schemes introduced by President Franklin D. Roosevelt to help the United States recover from the Great Depression.
Con – A trick or deception, often involving persuading someone to believe something untrue. – The infamous con artist, Victor Lustig, once “sold” the Eiffel Tower by convincing investors it was being dismantled for scrap metal.
History – The study of past events, particularly in human affairs. – Understanding history helps us learn from past mistakes and shape a better future.
Gold – A precious yellow metal that has been highly valued throughout history for its rarity and beauty. – The discovery of gold in California in 1848 led to a massive influx of people hoping to strike it rich, known as the Gold Rush.
Bridge – A structure built to span physical obstacles such as a body of water, valley, or road, facilitating transportation and communication. – The Brooklyn Bridge, completed in 1883, was a marvel of engineering and connected Manhattan and Brooklyn, transforming New York City.
Counterfeiting – The illegal practice of making imitation money, documents, or goods, with the intent to deceive. – During the American Revolution, the British attempted to destabilize the American economy by counterfeiting Continental currency.
