Who Doesn’t Want to Get Rich Quickly?
We’d all like that, especially when you can sit back and relax once you invest while a money manager does all the rest. Just wait a short period of time and you’ll be in the clover, right?
Unfortunately, if it sounds too good to be true it probably is. When you are victimized by fraud, you are generally entitled to receive a refund or, in certain circumstances, apply for a chargeback.
The term “get-rich quick scheme” was coined over a century ago, but they’ve probably been around as long money itself. The phenomenon gained notoriety in the United States after 1899, when a Brooklyn bookkeeper turned conman named William F. Miller bilked investors out of $1 million money (the equivalent of $29,900,000 today) by promising huge returns in very little time.
In the 1920s, an American swindler named Charles Ponzi would leave his mark on the history of crime. Ponzi began to amass capital by legally purchasing large numbers of international postal reply coupons in post-World War I Italy, where they were cheap, and then selling them off in the U.S., where they were much more expensive. His success in arbitrage then attracted investors. But eventually the market for postal reply coupons collapsed. There was no longer a profit to be made by re-selling the coupons, which until then provided the funds to pay dividends to his initial investors. Instead, with or without any knowledge of Miller’s own scheme, he perfected the method by paying their dividends with money provided by new investors.
As would be expected, the charade collapsed from its own weight once the dividends the mass of existing investors were expecting exceeded the amount of money being brought in by the new ones. Ponzi’s model, built step by step like a pyramid by adding new blocks of investors atop of the veteran ones, quickly became known, therefore, as a pyramid scheme. Eventually the concept became synonymous with his name in popular culture as well.
Want to Buy a Bridge in Brooklyn?
It has become a cliché and the butt of an often repeated joke, but there actually was someone who sold the Brooklyn Bridge to unsuspecting tourists. Not once, but many times. Twice a week on average for a number of years, in fact. And if those same visitors to New York weren’t interested in a bridge, he had a variety of other local landmarks in his fake real estate portfolio as well. George Parker (1870-1936) successfully conned tourists out of their money by convincing them to buy the original Madison Square Garden, the Metropolitan Museum of Art, Grant’s Tomb, and even the Statue of Liberty.
Victor Lustig (1890-1947), knowingly or not, took Parker’s business model to new heights, literally. Born in Sudetenland in what is now the Czech Republic, he put his fluency in a number of languages to good use as a conman on both sides of the Atlantic. His most infamous feat came after World War I, when he impersonated a corrupt French official who was looking for a bribe to sell off the Eiffel Tower (which was then in need of repair since it was originally intended to be a temporary structure) as scrap metal. Lustig sent off official-looking proposals to scrap metal dealers, found one who was familiar with the prevailing moral turpitude of French bureaucrats, and forked over the money. Lustig attempted to sell the landmark a second time to a more astute businessman, but escaped to Vienna before he was caught. He was eventually arrested in the U.S. for counterfeiting and died in prison. Among his other accomplishments was conning Al Capone out of $5,000 and selling money-printing machines to wannabe counterfeiters that broke down immediately after they started to work.
Why stop with a bridge in Brooklyn or scrap metal in Paris? Today you can go online and purchase stellar real estate on the moon, Mars or even Venus. You can take your pick of any one of a number of sites, some of which actually claim to hold trademarks, copyrights and even licenses that enable them to sell it to you. It’s all nonsense, but you will get an official-looking certificate, which is something that neither Parker nor Lustig ever presented to their victims.
If you think you have been victimized by a pyramid scheme, consult with our fund recovery experts at MyChargeBack.