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Good Money in Bad Faith: The 10 Biggest Scams of All Time

The Biggest
Good Money in Bad Faith: The 10 Biggest Scams of All Time

It’s a sad fact that not all enviably wealthy individuals got to where they are through honesty and moral scrupulousness. Some dodgy individuals will pursue personal wealth at the expense of others and sadly justice can be hard won in cases where the lawbreakers are also the lawmakers – or at least, the people behind the lawmakers.

But there’s little more satisfying than the shameless voyeurism of witnessing these loathsome individuals feel the full force of the law. The ordinary Joes who make up our list had grand plans to defraud the public – and they succeeded to launch some of the greatest get rich quick schemes in the world. They didn’t enjoy their ill gotten wealth for long, though, before karma – or more specifically, law enforcement – caught up with them. The  creativity of these individuals deserves some wary credit, and their legacies – exposing crucial problems of legislation and encouraging important reforms in the financial sector – are undeniable, but their lack of integrity means we’re not likely to be hailing these criminals as martyred heroes any time soon.

The next time you’re tempted to take a short cut on the road to success, remember the fate that befell these ten foolhardy wealth chasers. These outlaws certainly got rich quick, but they ended up spending their good years in jail mulling over their guilt instead of spending their money in glamorous establishments swooning over a new Rolex.

These are 10 of the biggest – and most crooked – ‘get rich quick’ schemes of all time, and the masterminds behind them.

10. The Ponzi Scheme: A $225 Million Scam

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In 1920 Charles Ponzi was responsible for a now-infamous get rich scheme where he would promise investors a 50% return in an unfeasibly short time. It was a more innocent age, and get rich quick schemes were rare, so most people couldn’t resist the offer. Charles Ponzi’s operation ended up taking in so much money it gained international attention but his tenuous business model crumbled when he started encountering difficulties paying his clients. Because, Ponzi wasn’t actually making real returns. He was, in fact, paying himself and old investors with money from new investors. This ticking time bomb of a system eventually blew up when the law discovered it. Investors lost an estimated $20 million in 1920 – which would equal about $225 million now. Charles Ponzi heralded the age of the ‘get rich quick’ dupes, and a ‘business’ model is now named after him; the Ponzi Scheme.

9. David Phillips’ Pudding Scheme: 1.2 million frequent flier points for $3,000

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David Phillips – or  ‘ that pudding guy’ – is another of the great get rich quick schemers. He is an American civil engineer currently teaching at the University of California. David Phillips is famous for accumulating over a million frequent flyer miles by exploiting loopholes in a healthy foods promotion in 1999. While shopping, Phillips discovered that the value of frequent flyer points he earned in a promotion exceeded the cost of the pudding he needed to buy to earn the points. In May 1999, David Philips was awarded 1,253,000 frequent flyer miles after buying 12,150 cups of pudding. He spent $3,500 in total. The value of the frequent flyers points he received far exceeded this but he didn’t do anything illegal. And so, for sheer perseverance and gall, Mr. Philips makes it on to our list.

8. Catch Me If You Can, Frank Abagnale Junior’s $10 million

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Frank Abagnale Junior makes it to this list for being one of the youngest fraudsters in history. Frank was only 16 years old when he scamming and by age 21, he had successfully cashed $2.5 million worth of fraudulent checks and posed as an attorney, pilot, doctor and university professor. His fascinating life has since been committed to film, with Leonardo DiCaprio playing Frank in the movie of his life. The law did eventually catch up with Frank Abagnale and he ended up behind bars. While committing cheque fraud, Frank learned a lot about the business and in a truly movie-like twist he landed himself a job in jail assist banks catch fraudsters just like him. After serving only 5 years of his 12 year sentence, Frank was released and now lives a crime-free life working and making a valuable contribution to curbing cheque fraud. Throughout his colourful life, Mr. Abagbale has amassed a fortune and is now worth an estimated $10 million.

7. James Frey’s $4.5 Million Little Lies

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James Frey makes it to this list for his book ‘A Million Little Pieces’. He released the book as a factual memoir and made millions in the process – he was even selected for Oprah’s prestigious Book Club list – but in a scandal that shook the literary world it emerged that the book was based on blatant fabrications. The crimes he credited himself with in his book – a confessional book about his fraudulent dealings and addiction – were revealed to be inaccurate and embellished. James Frey duped his publishers and fans of his books by passing off fiction as fact. We can only speculate as to whether his book would have made the splash it did if it had been dubbed as fictionalised from the outset; but Frey’s deceptive tactics earn him a solid place on this list of scamming money makers. He’s now worth a reported $4.5 million.

6. Stella Liebeck’s $0.5 Million McLaw Suit

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Stella Liebeck makes it to this list for taking full advantage of a legal situation to extort money from McDonalds. Stella Liebeck spilled Mc Donalds Coffee on herself and suffered third degree burns in the process. The 79 year old from New Mexico sued McDonalds but wasn’t content at receiving an amount equivalent to her medical bills. Eventually, McDonalds paid out (an estimated) over half a million dollars in punitive damages. Ms. Liebeck makes it on to our list for taking advantage of her situation to get rich quick and becoming the poster child for frivolous litigation while setting some complex legal precedent.

5. The Faking Fox sisters: From Riches to Rags

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The three American Fox sisters were central to the Spiritualism movement; a belief that spirits of  the dead can communicate with the living. They were Leah, born in 1814, and her younger sisters Margaret and Kate Fox.  Margaret and Kate apparently summoned responses from the dead through the sound of ‘rappings’ on hard surfaces – reportedly common in séances. Their demonstrations convinced their older sister, and then countless others, that they had the ability to communicate with spirits. Leah managed her sisters’ careers in Spiritualism and they were hugely successful – until Margaret had a fit of conscience and confessed, in 1888, that the rappings were fake. She even revealed the method behind the trickery. This marked the end of the Fox sisters’ career and their descent from riches to poverty. Within 5 years of the confession, the Fox sisters were all dead.

4. The Woman Who Faked Cancer for $12,000: Lori Stilley

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Lori Stilley is most recent entry on the list, and arguably one of the most extreme. In 2011, Lori Stilley began to fake a serious illness lasting almost two years, claiming to family and friends she had stage 4 bladder cancer. In the process, she received generous financial donations from family and friends to the tune of $12,000. Supporters rallied to donate, prepare her meals and even pay for her wedding. Not content with hoodwinking her loved ones, Stilley went ahead to write an eBook about her struggles which earned $3000. This year, after supporters became suspicious of her sudden recovery and reported her to officials, Lori was sentenced to 500 hours community service. An extraordinary and truly scandalous story of a woman who faked a tragic illness to extort money from her family members, this one falls squarely in our top five.

3. The Million Dollar Man Who Sold The Eiffel Tower, Victor Lustig

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In the early 1900’s, Victor Lustig gained notoriety famous for coning countless people – including, shockingly, the famous American gangster Al Capone. He makes it into our top 3 because of one very special con; succeeding to sell the Eiffel Tower. A ‘confidence trickster’, the Austria-Hungarian Lusting postured to metal dealers that the Eiffel tower was for sale. He posed as a government official and made the sale, walking away with a briefcase full of money. The man who agreed to the sale soon realised his error but was too embarrassed to report it the police. Lustig’s grand schemes and stunning skill for evading arrest land him at number 3 on our list of biggest scammers. His scams totalled hundreds of thousands of dollars million dollars at the time, equating to over $1million today.

2. The Brooklyn Bridge for $50,000: George Parker

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If you think selling the Eiffel Tower is impressive, what about famous New York landmarks like the Statue of Liberty, Grant’s Tomb, Madison Square Garden, the Metropolitan Art Museum? George Parker’s claim to fame, and to the penultimate spot on our list, is ‘selling’ all of these. He even sold the famous Brooklyn Bridge multiple times for years, reportedly asking for between $50 and $50,000 depending on his buyer. There isn’t much more to say about Parker; his stunning portfolio of false sales speaks for itself.

1. Gregor MacGregor: The Millionaire ‘King’

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After fighting for his country in the Latin American wars of independence, Gregor MacGregor returned home in England with news that he was now leader or ‘Cacique’ of an island nation called Poyais in South America. He showed his admirers a guidebook highlighting the landscape of Poyais and its abundant natural resources. Incredibly, the island didn’t actually exist – making MacGregor the grandest schemer on our list. His plan earned him enormous wealth from more than 250 hopeful colonists eager to buy land rights. When colonists reached Gregor’s alleged nation, they found only a wild jungle. Most of the colonists were weakened from the journey and during their relocation, many died.  While this tragic tale unfolded, the shameless MacGregor was rolling out his Poyaisian scheme in France.

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