Salmon, James, See: Berry, John
Salomen, Edith (AKA: Ann O'Delia Diss Debar, Vera P. Ava, Countess Landsfeldt, Sister Mary, Theo the Swami)
, b.1849, U.S.-Brit., fraud. For a stiff price Edith Salomen promised to conjure up the long departed spirits of Shakespeare, Cicero, Frederick the Great, or anyone with whom people, with the ability to pay, cared to speak. Salomen was one of the nineteenth century's most famous con artists, having learned the technique at an early age from her father, who passed himself off as a learned professor.
Born in Kentucky, Salomen left home when she was twenty. She caused an immediate stir in Baltimore by claiming to be the illegitimate daughter of the famous dancer Lola Montez and her lover, Ludwig I of Bavaria. The local newspapers were filled with stories about the long-lost heiress and scion. Eager to make her acquaintance, many of the city's most eligible young bachelors asked for her hand in marriage. One man in particular, whose family was a pillar in local society, turned over nearly $200,000 to the swindler, and then Salomen was exposed as a fraud by his parents. While awaiting her fate, Salomen began smoking opium in such large amounts that she had to be hospitalized. morning she arose from her bed, seized a knife, and stabbed an orderly. Salomen ran screaming through the corridors trying to convince the doctors that she was indeed insane. They were easily fooled.
Committed to an asylum, Salomen enticed a physician named Mesant into marriage. The doctor agreed to sign her release papers and in the following year Salomen was back on the streets. Mesant conveniently passed away which afforded the widow a chance to branch out to a more lucrative field, hypnotic mysticism. In New York she married General Diss Debar, taking the name "Ann O'Delia Diss Debar" for her alias. She set up shop on Madison Avenue, advertising sances on demand. Salomen would lapse into a semi-hypnotic trance, bringing back the souls of the dearly departed. Her most famous victim was Luther R. Marsh, an aging lawyer whose lifelong dream was to become a famous painter. Salomen put him in touch with the sixteenth century master Raphael after Marsh had given her a sizable amount of cash. In ten days, she promised, Raphael would produce an original oil on canvas. The famous Italian artist was a man of his word. Marsh viewed the original work in a locked cabinet ten days later. As an added touch, the paint was still wet.
The astonished lawyer became a true believer. Next he wanted to commune with Shakespeare, Charlemagne, and Cicero. Once his money was gone Marsh signed over the deed to his house on Madison Avenue. Finally, relatives came to his rescue and had Salomen and her confederates arrested. She served six months in jail and was released. At this point the seer had no further need of a husband. She divorced the general and with a new identity as Madame Vera P. Ava took to the lecture circuit, combining her talks on the spiritual world with a crude vaudeville routine. She was hooted off the stage. A series of bigamous marriages followed. In Kansas City she married a man named Smith, but abandoned him after picking his bank accounts clean. Salomen moved on New Orleans, taking for her husband a man named Mr. Jackson. He became her trusted assistant, helping her set up a series of "psychic lectures" in which she again brought forward the famous and the obscure from the spirit world. The Countess Landsfeldt, as she now called herself, was soon exposed. "The most popular ghost was that of Frederick the Great," commented one journalist, "and for an extra charge of two dollars per head he appeared wearing the Imperial Crown of Germany, oblivious to the fact that that particular crown was in the possession of the Austrians."
Forced to flee New Orleans, she continued to Chicago, where she was dubbed Sister Mary. This time the scam involved raising money for a fictitious orphanage. From there, Salomen and her husband traveled to Capetown, S. Africa. She opened up a "Theosophical University," which handed out degrees in the field of "higher mysticism." When the university was forced to close down, Salomen took her show to England where she was known as "Theo the Swami," a new variation on the Theosophical University swindle. Jackson and Salomen were exposed as frauds by Chief Detective Inspector Kane of Scotland Yard. The self-styled Swami was placed on trial in 1901, found Guilty, and sentenced to seven years in prison. After completing her sentence, Salomen left England for the U.S. where she faded into obscurity.
, prom. 1668-1808, Italy, hoax. Titus Petronius Niger has been widely regarded as the author of Satyricon, a first century tract published in Rome during the reign of Emperor Nero. The wistful romantic prose survives only in fragments, but from time to time, individuals have come forward claiming to have "discovered" the missing pieces.
In 1668, Roman experts attested to the authenticity of thirty new pages, allegedly uncovered in a library at Trau, Dalmatia, by Martinus Statilius. These experts did not account for the textual and grammatical errors however, which shed grave doubt on the validity of Statilius' claim. The issue still remains in doubt. In 1693, a French soldier named Francois Nodot announced that he had found additional missing text in Belgrade while on military maneuvers. His claim was dismissed as a hoax when he failed to produce more than a facsimile of the original.
A century later, Spanish writer Joseph Marchena passed off a bogus Petronius text which he claimed to have located in a Swiss monastery. In 1808 Professor Heinrich Eichstadt of Jena demonstrated that Marchena's research was fraudulent. He had borrowed the text from an ancient manuscript at the university library.
Schafer, James B. (AKA: The Messenger)
, c.1901- , U.S., fraud. Not even the Michigan chapter of the Ku Klux Klan was immune to James Schafer's many swindles. At his fraud trial in 1942, it was alleged that Schafer had "stole their money and sold them out," a charge hotly denied by the defendant.
Schafer, sometimes called the "Messenger," was a self-made man who decided the quickest way to a pot of gold was through religion. In 1935, the former advertising salesman founded the "Royal Fraternity of Master Metaphysicians,"which attracted people who were willing to pump enough money into the racket so that Schafer could purchase the one-time Vanderbilt mansion on Oakdale, L.I., for $2,500,000.
Many of Schafer's followers went to live with him at the mansion which he had renamed "Peace Haven." For two years, he fed them a vegetable diet and a steady stream of "prophecy." The press picked up on the story, and publicized his efforts to raise Baby Jean Gauntt in this "pure" environment. However, Baby Jean was returned to her mother in Manhattan soon after-wards. The inhabitants of Peace Haven were evicted when Schafer was not able make the payments on the 110-room mansion.
Suspicious that the "Messenger" was not everything he said he was, several followers filed suit. Schafer was indicted for fraud and brought to trial. Among other things, it was alleged that he had swindled the Ku Klux Klan while he was a member of the Michigan contingent. Defense attorney Raymond Wise denied the charge. Nevertheless, Schafer was sentenced to a prison term of two-and-one-half to five years in Sing Sing for the theft of $9,000 from one of his parishioners. The sentence was imposed by Judge Owen Bohan of the General Sessions Court of Manhattan on May 5, 1942.
, prom. 1910, Ger., big.-fraud. Anna Schneider had convinced the dashing young nobleman Count Renenski that she was the long lost daughter of William II, emperor of Germany and king of Prussia from 1888-1918. She presented her credentials to the count, and to him, the claim seemed to be legitimate. She said that the kaiser had secretly married her mother, Vera Savanoff in 1880, and had given her a daughter, Anna. The next year he married Princess Augusta Victoria, a member of the Royal House.
Count Renenski was deeply moved by the story and agreed to help her establish her claim. In the process, he fell deeply in love with the young woman and proposed marriage. She accepted, and the ceremony was scheduled for July 10, 1910. But the count had been swindled. Anna Schneider quietly fled with £3,000 and a large quantity of the family jewels.
Schneider was a Bonn beer-hall waitress who had researched her victim thoroughly before taking action. By the time her crime was detected she had moved to Hamburg, where she took on a new identity as a well-heeled society woman. Here she deceived Colonel Bernstorff, a cousin of Johann Heinrich Bernstorff, the famed German diplomat to the U.S. They became lovers, but the colonel was saved further embarrassment when the Berlin police arrested Schneider after she tried to get 100,000 francs for a check written for 1,000. Sent to a bleak prison in West Gradenz, Schneider discovered to her surprise that the governor was none other than Colonel Bernstorff. A few days after her arrival, Bernstorff forgave her for her past transgressions and they were married. The honeymoon lasted only three weeks, long enough for him to establish that Anna Schneider was already married. She was returned to prison,
and ordered to finish out her original sentence, plus five years for bigamy.
Scribner, John C.
, prom. 1900, U.S., hoax. John C. Scribner, an agent for the Wells Fargo Company, perpetrated an innocently intended hoax with far reaching effects when he planted a skull in Marson's Mine, Calaveras County, Calif., around the turn of the century. The skull was "discovered" by Professor James D. Whitney, a California state geologist who then excitedly announced to the scientific community that he had uncovered a genuine artifact of the Pliocene Age.
A battery of paleontologists and anthropologists, including William Henry Holmes, director of the U.S. National Museum, descended on the site to lend their opinion. Holmes declared the skull to be genuine. Scribner kept the secret until he died, when his sister and an Episcopal minister who were privy to the deception revealed the truth of the matter. In 1902, Bret Harte wrote a short story about the affair called "To the Pliocene Skull."
, 1675-1704, Brit., fraud-count.-rob.-mur. By his own estimate, Thomas Sharp had been imprisoned in Newgate Prison at least eighteen times. Between his prison terms, Sharp and his gang of thieves frequented the Vine alehouse at Charing Cross. The owner of the pub was a wealthy old man whose private quarters were upstairs. To get at the secret place where he stashed his money, Sharp lit a small fire in the clubroom. "Fire!" the thief cried. The old man raced upstairs to retrieve his valuables. Sharp followed, and saw for himself the location of the safe. Meanwhile, Sharp's accomplices had extinguished the fire. Sharp and his friends returned the following night with their women. After a sumptuous meal, he quietly removed £500 from the owner's safe.
Sharp was born in Surrey, and earned his living with loaded dice at the gaming tables until he finally grew tired of court fines and the pillory. So Sharp and his robbers turned to counterfeiting. They manufactured Black Dogs, coins resembling shillings, made of cheap pewter. Eventually Sharp was caught and returned to Newgate, while several of his companions went to the gallows. When Sharp was released, he dabbled in astrology, which proved to be a lucrative fraud. Pretending to understand an Arabic dialect translated by Dutch orientalist Thomas van Erpe, Sharp swindled a printer's daughter out of fifty shillings by predicting her marriage.
In 1704, Sharp added murder to his long list of criminal offenses. Sharp's victim was a shoemaker who owned a small shop facing Great Queen Street. Sharp murdered him for trying to prevent a robbery. Thomas Sharp was captured, convicted, and hanged at Long Acre, Drury Lane, on Sept. 22, 1704.
, prom. 1583, Italy, hoax. At Modena, Italy, in 1583, Charles Sigonius announced his discovery of a work by the first century B.C. Roman statesman and orator Marcus Tullius Cicero. The work, entitled "De Consolatione," was an essay in which Cicero consoled himself over the loss of his daughter Tullia. Exactly 200 years later in 1783, a letter written by Sigonius was found by Terabosilii. The letter was a confession by Sigonius that he himself had written the "De Consolatione" by constructing the essay based on a mere fragment he had found.
, c.1475-1535, Brit., fraud. Crowned King Edward VI in Dublin in 1487 while posing as the young Earl of Warwick in a complicated scheme with the support of Margaret, sister of Edward, and an Oxford priest who trained him for the assignment. After he was named king, he traveled to Lancashire with the backing of poorly-supplied Irish levies and Germans. He was beaten at Stoke in 1487. He was granted a pardon, and served as royal falconer thereafter.
, 1810-70, U.S., gamb. A Kentucky native, Elijah Skaggs perfected his card sharping techniques before the age of twenty-one. Skaggs started his career in Nashville, where he had reasonable success. Among his first purchases with the money he made cheating in cards was a true gambler's outfit, black frock coat and pants, black silk vest, white shirt, patent
leather boots, and a black stovepipe hat.
Skaggs, who specialized in faro, continued to study the techniques of dishonest dealers. If he couldn't deduce how they pulled a particular cheat, he offered them money; if they refused to divulge the secret, he threatened to expose them. Eventually Skaggs increased the range of his operations to many of the towns along the Mississippi River, including New Orleans and St. Louis. He also hired and trained employees to expand his operation. His efforts were successful he netted approximately $100,000 a month from his rigged faro games.
By the time Skaggs was thirty-seven, he was a millionaire. However, amid growing publicity about his crooked operations, Skaggs decided to retire to a plantation in Louisiana. Skaggs invested heavily in Confederate bonds, and when the South lost the war, Skaggs lost his fortune. When Skaggs died in Texas in 1870 at the age of sixty, he was a homeless, penniless drunk.
Slack, John, See: Arnold, Philip
Smith, Cecil Brown (AKA: Rev. Thomas Henry Clifford)
, prom. 1904, Brit.-Scot., fraud-big. Cecil Brown Smith acted the part of a paralyzed beggar well, taking in more than £6 a week. His con worked until October 1904 when London detective-constable Coney followed him to London Bridge Station where the alleged vagrant treated himself to oysters and ale before ably boarding a train for his lovely home in the London suburb of Norwood. Smith was arrested and charged with fraud.
During his trial, he sobbed, pleaded guilty, claimed he feared for his family's reputation, begged forgiveness, and vowed to straighten out his life if the court showed mercy in their decision. The courtroom audience supported Smith and pitied him until a medical officer proved that Smith was in perfect physical condition. The judge, untouched by Smith's admonitions found him guilty and sentenced him to three months' at hard labor.
Several years later, Smith discovered religion, and once again found himself in jail. In 1910, while posing as the Reverend Thomas Henry Clifford, Smith preached to congregations and married couples illegally. In addition, he was charged with bigamy. In court, Smith pleaded guilty to all charges except bigamy and was once again found Guilty. He was sentanced to ten months at Hard Labor.
Smith, Jefferson Randolph II (AKA: Soapy Smith)
, 1860-July 8, 1898. U.S., fraud. Jefferson Smith, "known as the "king of the frontier con men," and the foremost practitioner of the "Prize Package Soap Sell Racket," was a product of the ruined post-Civil War South. Born in Georgia, Smith passed through the difficult Reconstruction period with a firm resolve to escape the ravages of his war-torn homeland. His family moved to Round Rock, Texas, where he found work as a salesman and hotel runner. Moving from town to town Smith ingratiated himself with card sharps, two-bit hustlers, and three-card Monte operators who plied their trade in the western saloons and concert halls. In the process he earned a reputation as a shrewd, thimble-rigging con-man.
It was in Denver, Colorado in which Jefferson earned himself the famous sobriquet of "Soapy" that he would take with him to his grave. He set up his tripe and Keister (tripod and suitcase) on a busy street corner and with a spiel, draw the local rubes to his stand. The lure would be the promise of cash prizes. In plain view of the on-lookers Jefferson picked up a cake of soap from a large pile sitting atop his case and wrapped a large denomination bill around it and wrapped the soap back up. He did this several times with other bars of soap and when he was through he offered the chance to purchase some soap with the hope of buying one that contained cash. Members of Jefferson's "Soap Gang" worked as shills and pretended to win money in order to excite the crowd into a buying frenzy. The yokels would obligingly rush forward to buy a bar of soap, devoid of a prize of course, for a sum of money ten times the normal store price of the soap.
One One of the main reasons Jefferson lasted so long in mining camps and towns was that he had a strict rule that his gang was allowed to only swindle money from out-of-town strangers. No local residents were allowed to play the games. In 1889 Jefferson opened a saloon and gambling hall named, the Tivoli Club in Denver. A sign reading, Caveat Emptor
hung at the entrance warning those who visited, "Let the buyer beware." In the 1890s Jefferson used the court defense that he was a cure for the gambling habit...and he won on that argument.
In 1892, during one of Denver's anti-gambling and saloon reform movements Jefferson moved his operations to the new silver boomtown of Creede, Colorado. He opened the Orleans Club in Creede, Colo., providing silver miners with whiskey, girls, and round-the-clock gambling. Those who questioned the honesty of the game there was little doubt that the outcome was rigged to favor the house often found themselves staring down the barrel of Smith's gun. The conman ruled with impunity. He owned the local politicians and carried out his business as he saw fit. When the boom town burnt down, including the Orleans Club, he moved back to his first love, Denver.
When Jeff was finally forced to flee Colorado in 1895, he moved on to the boomtown of Skagway, Alaska, a port that bordered Canada during the 1897 Klondike gold rush. It was here that he implemented one of his more humorous swindles. In late 1897 He opened a telegraph office for stampeders desiring to send messages anywhere in the states for only $5. Often times after sending a telegram and leaving the telegraph office the sender would later run into the operator with the news that a reply had been received...for an additional $5. The humorous part of the story is that telegraph wires did not arrive in Skagway until 1901. The tragedy of the story is that it was the operators job to gather personal and economic information from the intended victim which was used to get the dupe into a rigged poker game in which larger amounts of cash were exchanged.
In the spring of 1898 Jefferson opened Jeff Smith's Parlor. He operated three gambling halls and saloons but in Jeff Smith's Parlor there was no gambling. This was his "office" in which he wined and dined VIP's to the city. Although Skagway had a small clap board city hall it was said that Jeff's place was where the real decisions of city politics were made. Newspapers reporting on the gold rush named Soapy Smith the undisputed "King of Skagway," dispensing frontier justice through a band of armed thugs who made sure that a steady flow of cash found its way into the gang's coffers.
The short, spectacular reign of Jefferson Randolph Smith ended on July 8, 1898 at age thirty-seven. Four days after leading the annual Skagway Independence Day parade, members of Smith's gang swindled a Klondike miner of near $3,000 in gold nuggets. News of the robbery spread and Jefferson found himself pitted against a local vigilante organization known as the Committee of 101. They demanded the miners gold be returned and the perpetrators turned into the proper authorities. Jefferson promised to comply but when the promise was not forthcoming a meeting was held in which Jefferson attempted to break up. A gunfight broke out in which Jefferson was killed. He was buried outside the cemetery so as to not "desecrate" the other graves. There are annual "Wakes" held each year in his honor.
Smith, Thomas L. (AKA: Pegleg Smith)
, 1801-66, U.S., fraud-rob. One of the old West's infamous mountain men, Thomas L. Smith had a career that included theft, slavery, rustling, and perpetrating a variety of cons, including touting fictitious gold mines to gullible searchers. Born in Crab Orchard, Ky., on Oct. 10, 1801, Smith was a teenager when he ran away to flatboat on the Mississippi, later heading for St. Louis, Mo., where he worked for a fur merchant and met mountaineers and trappers like Kit Carson, Jim Bridger, and Milton Sublette. Smith went along on Alexandre Le Grand's first expedition to Santa Fe, N.M., and learned several Indian dialects. When an Indian shot him below his right knee Smith got both a wooden leg and his nickname. During the 1830s he became a successful trapper, maintaining his equilibrium on a horse despite his handicap.
By the late 1830s animal pelts were severely devalued and Smith switched to kidnapping Indian children to sell to rich Mexicans looking for slaves. Knowing that enraged Indians were on the lookout for him, Smith moved to California where, for about a decade, he stole horses, one time leading 150 Utah Indians across the Sierra Nevada into California to steal several hundred of them. In partnership with scouts Bill Williams and Jim Beckwourth, Smith was part of the biggest horse-stealing ring that ever existed in that state. With pressure from the law increasing the gang disbanded and Smith cashed in on the gold fever. Saying that he had found abundant samples of gold bearing quartz in the Chocolate Mountains, or the Santa Rosa Mountains, or the Borego Badlands, but was forced to flee angry Indians, Smith sold maps of the alleged mines or was staked by gullible gold seekers. After Smith's death in 1866 at a hospital in San Francisco, eager fortune-seekers continued to look for the Lost Pegleg Mine, which is still sought by some even to this day.
, prom. 1940s-50s, Gr., fraud-embez.-mur. In the early 1920s, a Greek monk, Father Matthew, established a religious sect called the Calendarists and built a convent about thirty miles southeast of Athens, near Keratea. He was aided by a former factory worker, Mariam Soulakiotis, who began to take control of the convent during WWII when Father Matthew was in his eighties. She began sending monks and nuns to recruit wealthy converts, and as they arrived, they were required to confess, fast, go without sleep, pray, maintain silence, and turn over their estates. New converts who did not adhere to these policies were beaten and other members were regularly punished.
In about 1949, local villagers began to gossip about screams coming from the convent and in early 1950, the daughter of one convert contacted the Athens prosecutor, and charged that Soulakiotis had forced her mother to sign over her estate. After investigating, the prosecutor discovered that about 500 recruits had left their estates to the convent and then died.
In December 1950, Soulakiotis was arrested and in September 1951, she was tried on charges of unlawfully confining a girl in the convent for twelve years. The child, placed in the convent in 1938, had been told she was an orphan and her father had been told that she had died. Soulakiotis was convicted, and sentenced to twenty-six months in prison. A nun was also convicted as an accomplice and was sentenced to four months in prison. About a year later, in 1952, Soulakiotis, eight nuns, and a phony bishop were tried on charges of withholding food and medical treatment from a monk and three nuns, causing their deaths and obtaining their estates by fraud. On Feb. 6, 1953, Soulakiotis was sentenced to ten years in prison, a nun received a ten-year sentence, another nun was given a three-year sentence, and the fake bishop received a year in prison. Soulakiotis was again brought to trial on charges of embezzlement, fraud, and illegal detention and abuse of a convent member. On Nov. 18, 1953, she was given another four-year term, to be served concurrently with the prior sentence.
South Sea Bubble, The
, 1710-20, Brit., fraud. The South Sea Company (or The Governor and Company of Merchants of Great Britain trading to the South Seas and other parts of America) was founded in 1710 to defer responsibility for Britain's fast-growing national debt from the government to private enterprise. The idea (originated by author Daniel Defoe and championed by Chancellor of the Exchequer Robert Harley) was to set up a trading company that would exploit the American colonies and independent areas in the new world, issue stock in the new company, and use the dividends to pay off investors who had purchased government bonds, thereby paying off the national debt. The inducement of easy money in the form of colonial slave trading or hypothetical gold mines in unexplored territories inspired many to put money into the scheme, which was legal, if not entirely ethical. The company found no gold mines, but it was lucrative and prestigious.
The scheme first went afoul of the law in 1719, with the appearance of South Sea board member John Blount (or Blunt), who took the idea of the watered stock several steps further. He approached Parliament with the idea of taking on the responsibility for the national debt on condition that £100 of South Sea stock be issued for every £100 of debt incurred a generous offer on the surface, since the real value of South Sea stock had increased to £128 for each £100 face value. But Blount's proposal to Parliament included these implications: "Suppose that shares were forced up to £300. That would mean that in order to convert £1,200 of government stock the company need only issue four shares of £300 each, not twelve at £100. That will leave eight surplus shares over, which, by selling them, would provide a profit of £2,400." Blount had discovered a way to manufacture money out of thin air; all it took was a government desperately in debt enough to let him get away with it.
Blount found it necessary to bribe members of Parliament to secure approval for the issuing of the stock. During the debates on the subject, the face value of the stock was inflated by "very artificial engines and secret springs." In the spirit of skullduggery infecting the venture, false rumors were voiced about Peruvian lands soon to be acquired by the company. This bloated the value of the stock, demand for which quickly grew out of proportion to its true value the initial issue upon Parliament's approval was £2.25 million of stock at £300 per share of £100 face value stock. Royal Assent for this issue was received on Apr. 7, 1711, and by Apr. 28, the company declared a 10 percent dividend and issued a further £1.5 million of stock, this time at £400 per share for £100 face value. The three weeks in which a little over £1.1 million true value of stock was sold for £3.75 million was not enough time for a single ship to be outfitted and sail to the new world.
The public was especially impressed by the pedigree of some of the scheme's backers. King George I himself was persuaded by his two mistresses, Baroness von Kielmansegge and Madame Schulenburg, to accept an appointment as governor of the company, and the Earl of Sunderland, who was serving as first lord of the Treasury, was enthusiastic in supporting Blount's proposals. The high hopes Blount generated in the government and among investors led to a sort of mania among the public, many of whom wanted in on the deal. This led to any number of lesser swindles, as people who could not acquire South Sea stock invested in any similar deal that came along. A phony insurance company was set up to insure marriages against divorce, a fake research and development scheme promised "the making of a wheel of perpetual motion," and £2,000 were spent on worthless stock offered by an enterprising con man who advertised "an undertaking of Great Advantage, but no one to know what it is."
The directors of South Sea itself moved to put their even more dishonest competitors out of business, using the technicality that, as partnerships without a government-approved charter of incorporation, they were not legally entitled to issued securities at all. South Sea brought action against four of these fly-by-night operations in August 1720, and Parliament passed an act banning such companies. However, with the competitors forced out of business, the artificially high stock prices readjusted themselves in the marketplace, independent of directorial control. By the end of September, South Sea shares formerly valued at £1,000 had fallen to £190. By the end of October, they had fallen to £135. At least three investors committed suicide. The House of Commons formed an investigative committee which levied fines against Blount and other board members, but the Earl of Sunderland and the king's mistresses were allowed to keep the profits they had made.
Stavisky, Serge Alexandre (AKA: Sacha)
, c.1886-1934, Fr., fraud. A colossal swindle perpetrated by Serge Stavisky brought scandal and ruin down on the heads of some of France's most esteemed government leaders in the years preceding the outbreak of WWII. "L'Affaire Stavisky" filled reams of official court transcript as prosecutors attempted to sift through conflicting evidence to learn how it was possible for a Russian-born swindler operating out of a government-supervised pawn shop to cause so much chaos in the marketplace. As the court pondered, hordes of angry citizens standing outside the Chamber of Deputies chanted, "Assassins! Thieves! Staviskys!" A new word had entered the French lexicon of popular slang. Who was this character who seemed to anticipate the techniques of the notorious American swindler Charles Ponzi?
Serge Stavisky was born in Kiev to Russian-Jewish parents. Nicknamed "Sacha," his first encounter with the law occurred in 1908 with his arrest for fraud. After a short stretch in prison, he resumed his career on the streets.
In 1912, Stavisky was arrested a second time, and the disgrace brought on his family contributed to his father's suicide. Shortly before WWI, Stavisky left his home to settle in Paris where he acquired residential status. Stavisky carved out a living trafficking in drugs and women, small-time stuff when weighed against the skill and dexterity he later showed in passing stolen bonds and securities. Serge spent the war years and the early 1920s running a casting bureau and a medical clinic where he promised women an accurate diagnosis of pregnancy. He called his bogus examining device a "matrascope." The clinic brought Stavisky into close personal contact with the wives of leading political figures of the Republic invaluable contacts he was quick to exploit. Stavisky became a wealthy man overnight. For a time he spied for the Sret Gnrale, informing on the riff-raff of the French underworld. During the 1920s, Sacha was often seen in the company of some of France's most glamourous women. He later married Arlette Simon, a dress model for the house of Chanel after promising her he would "go straight."
In 1926, the arch-swindler was imprisoned for bilking two clients out of seven million francs in a crooked stock deal. He was housed in the Sant Prison in Paris for eighteen months, awaiting a trial that never came. In 1927, Stavisky was given his freedom by shame-faced French authorities who were unable to sort out the tangled network he had so carefully built. One reason for Sacha's early release was his business dealings with men in public life who did not wish to be embarrassed by revelations of wrongdoing. The chief prosecutor of Paris, Georges Pressard, a brother-in-law of Premier Camille Chautemps, obstructed and postponed Stavisky's trial nineteen times. Joseph Garat, the mayor of Bayonne and a deputy of France, helped the con man set up the municipal pawnshop in his town which became a "clearing house" for a gigantic swindle that bilked the country out of millions of francs.
Stavisky paid out in excess of $3 million in bribes to French business leaders and politicians over a six-year period. Their names were entered into a ledger listing the monies paid as "stock dividends." Sacha then had himself named as the agent for the municipal bonds floated by several French cities, his collateral was a cache of stolen jewels. The bonds would then be discounted at a well-known bank and the money in turn would be invested in one of the swindler's companies.
Premier Chautemps, leader of the left-wing coalition, approved of the government's investment in pawnshop securities. (The pawnbrokers had been carefully regulated by the state dating to the time of King Louis XVI. A Crdit Municipal, or local council as it was known, could not be organized without the assent of the premier.) Using the fake jewelry as backing for the Bayonne pawnshop, Stavisky and Mayor Garat issued fraudulent bonds in the sum of 239 million francs. The swindle went undetected until Christmas Eve, 1933, when police those not on Serge's payroll arrested a party to the scheme who told all. Warrants were issued for the arrest of the members of the ring including two chamber deputies and editors Albert Dubarry of the right-wing La Volant newspaper and Camille Aymard of Libert, a leftist journal. DuBarry
acted as intermediary between Stavisky and the corrupt politicians, passing on 1,000 franc notes as bribe money. (Stavisky cleverly cultivated the support of both of France's political factions to ensure the success of his scheme.)
The newspaper L'Action Franaise exposed Albert Dalimier, France's Minister of Colonies, as the party responsible for persuading the insurance companies to invest in the worthless municipal bonds issued out of Bayonne. Dalimier was forced to resign from the cabinet. The full-blown scandal came to a head on Jan. 8, 1934, when police found Stavisky lying dead in a mountain cottage at Chamonix. They listed his death as a suicide, but a pistol was found in his left hand when there were entry wounds above the right temple. The mystery deepened when Appellate Judge Albert Prince was murdered a day before his scheduled appearance before the Parliamentary Committee investigating the scandal. Prince was lured to the Dijon railroad station one night in February 1934, and tied to the railroad track by his assailant. Railway police found his mangled body several hours later. When questioned about the matter, two eyewitnesses swore that they had seen Stavisky's former secretary, Gilbert Romanigo, lurking about Prince's apartment several days before his murder.
The public outcry was immediate and far-reaching. Suspecting a sinister government cover-up, Royalist sympathizers took to the streets against the embattled leftists. The country teetered nervously near civil war as the most serious rioting since the 1871 Commune was reported in the neighborhoods of Paris. Unable to hold the government together, Premier Chautemps turned over the reins to Gaston Doumergue, brought out of retirement from his home in Southern France. To pacify the mobs the new premier forged a bipartisan cabinet and promised sweeping reforms. The remains of Stavisky were exhumed from his mountain grave and an official inquiry was launched. It was conceded that the shooting had been "somewhat forced," an ambiguous explanation that failed to placate hard-liners who believed his execution was carried out by the French Secret Police.
Twenty people, including Arlette Stavisky, were tried at the Palace of Justicein November 1935 for the swindle that looted French coffers of $18 million. "To be able to go away and forget all this by migrating with my children to America!" Arlette cried. "To bring up my children to love me and respect the memory of their father! That is all I ask!" The eleven-week trial ended with the conviction of just nine of the original defendants. Seven-year prison sentences were doled out to Gustave Tissier, Stavisky's right-hand man and manager of the Municipal Pawnshop in Bayonne, and to Henri Hayotte, erudite manager of the Empire Theatre of Paris where in former days the arrogant Stavisky was known to entertain lavishly. Editor Dubarry and the grieving widow were acquitted, but three other defendants received lesser sentences, including: General Joseph Bardi de Fourtou (two years), whose name appeared on the phony stock prospectus, and Deputy Gaston Bonnaure, who was sent to prison for one year.
Stonehouse, John Thomas (AKA: Joseph Arthur Markham, Donald Mildoon)
, 1925- , and Buckley, Sheila, 1951- , Brit., theft-forg.-fraud. A member of Parliament, John Thomas Stonehouse, desired to become prime minister of England after joining the House of Commons in 1957. When his party fell from power in 1970, Stonehouse became a businessman.
In the next five years he established twenty unsuccessful companies, which he propped up by pumping money from one to another. Eventually he sunk more than £1 million into debt, was hounded by banks and credit card firms for £375,000, and was responsible for personally guaranteeing £729,000. In 1973, Stonehouse, forty-eight, decided to engineer his disappearance with the help of his mistress and secretary, 22-year-old Sheila Buckley. Stonehouse created two new identities for himself, Markham and Mildoon, and set up nine new bank accounts in Switzerland and Australia under the new names.
On Nov. 16, 1973, the businessman pretended to drown in Miami, Fla., and after flying to San Francisco he arrived in Melbourne, Aus., on Nov. 27. There, his charade was detected by a bank clerk, 22-year-old Bryan King. On Nov. 28, King opened a new account of $21,500 (Australian) at the Bank of New Zealand for Stonehouse, alias Donald Mildoon, who said he was emigrating to New Zealand. After lunch that same day, King noticed Stonehouse leaving another bank and depositing more money at the bank where he worked. King alerted his superior, who called the other bank where officials said they had no customer named Mildoon, but a recent British resident, Markham, had been withdrawing large amounts of money.
King's bank called the Victoria State Police who immediately began trailing Stonehouse. One officer noticed that the suspect regularly bought the London paper and the officer saw two articles about missing people, Stonehouse and Lord Lucan. Victoria police requested pictures of Lucan and Stonehouse and, on Dec. 25, 1973, arrested Stonehouse and found a letter from his mistress in his pocket.
Before his arrest, Stonehouse had called his wife and persuaded her to bring his lover to Australia, which she did. In the phone conversation, which was being taped by police, he explained how he had faked his death and was now living under another name. The two women arrived, and after a confrontation, his wife left. Buckley and Stonehouse were sent back to England and their trial at Old Bailey began in April 1976. On Aug. 6, 1976, Stonehouse was convicted on fourteen charges of theft, forgery, and fraud charges and sentenced to seven years in prison. Buckley was convicted on charges of aiding Stonehouse and received a two-year suspended sentence. After serving three years of his sentence, Stonehouse was released and he and Buckley married in February 1981.
, prom. 1702, Brit., consp.-kid.-fraud. In 1702, Danish businessman Kurt Swendsen dealt in timber and spent his free time drinking, gambling, and visiting prostitutes. He was soon short of cash, so he decided to marry into money.
Kurt Swendsen first persuaded an acquaintance in London, Stott, to help him kidnap her wealthy neighbor, Pleasant Rawlins. One day in March, Stott offered Rawlins and her governess a ride. The carriage was stopped by two men posing as bailiffs. The impostors charged Rawlins with not paying her debts and trying to flee London, then they took her to a private room where they told her she would go to prison if she did not pay the debts and that the Lord Chief Justice would shortly arrive to settle the matter. When the imposter judge came into
the room, he was attended by Swendsen, who offered to marry the young lady, saying he would cover her debts so she would save face. Rawlins agreed and a marriage ceremony was performed.
That night Swendsen went to bed drunk and the next morning his new wife sent notes to her friends and trustees, who immediately came to her aid. Swendsen was arrested and faced charges of conspiracy, kidnapping, and fraud. He was tried, convicted, sentenced to death, and hanged about a year after the kidnapping. Rawlins later married a country squire.
From the World Encyclopedia of Con Artists and Confidence Games