Fraudsters and Charlatans Read online

  Fraudsters

  and

  Charlatans

  A PEEK AT SOME

  OF HISTORY’S

  GREATEST ROGUES

  LINDA STRATMANN

  Dedication

  This book is dedicated with great affection to the memory of Janet Shepherd Figg (1957–2005), who sadly never saw it completed, but was always a good friend and an inspiration.

  Previously published as The Crooks who Conned Millions in 2006

  This edition published in 2010

  The History Press

  The Mill, Brimscombe Port

  Stroud, Gloucestershire, GL5 2QG

  www.thehistorypress.co.uk

  This ebook edition first published in 2012

  All rights reserved

  © Linda Stratmann, 2006, 2010, 2012

  The right of Linda Stratmann, to be identified as the Author of this work has been asserted in accordance with the Copyrights, Designs and Patents Act 1988.

  This ebook is copyright material and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the author’s and publisher’s rights, and those responsible may be liable in law accordingly.

  EPUB ISBN 978 0 7524 8695 6

  MOBI ISBN 978 0 7524 8694 9

  Original typesetting by The History Press

  Contents

  Acknowledgements

  Introduction

  One

  The Price of Omnium

  Two

  The Princess of Javasu

  Three

  The Viscount of Canada

  Four

  The Sting

  Five

  The Bank with No Scruples

  Six

  A Racing Certainty

  Seven

  The Grappler

  Eight

  The Greatest Liar on Earth

  Nine

  The Juggler with Millions

  Ten

  The Double Duke

  Notes

  Bibliography

  Acknowledgements

  I would like to extend my grateful thanks to everyone who has helped me in the considerable research required for this book. The staff at the British Library, Colindale Newspaper Library, the Family Record Centre and the National Archives have, as always, all been enormously helpful. Many thanks also to Sarah Colbourne of the Hallward Library, University of Nottingham, Professor Paul Johnson of the London School of Economics and Sorrel Cittadino. A special thank-you is due to Eamon Dyas for his fascinating tour of The Times archives and Mary of the delightful www.missmary.com for unearthing a wonderful article about Mlle Lenormand. The unsung hero of all my work is my husband, Gary, who tolerates with good humour the many hours I spend sitting behind a door marked ‘Go Away!’

  Introduction

  The nineteenth century was a time of optimism, with public confidence in the rewards of trade and exploration, and excitement at new inventions and discoveries. Never before had ordinary members of society had such a variety of opportunities to invest their humble savings in banks and businesses, and never before had rogues and charlatans of all kinds had a larger or richer field in which to perpetrate their frauds. Improvements in communications and travel brought a hunger for knowledge of the world, but this very eagerness sometimes led to uncritical acceptance of any story that seemed fresh and sensational. It is tempting to assume that people then were more gullible than we are today, but society encouraged an admiration of and implicit trust in the nobility, the educated and those with a conspicuous outward show of success. These figureheads were the heroes and superstars of the day, lauded by the popular press, respected by the masses, and their names alone were sufficient to lend credibility to any enterprise.

  I have gathered ten stories, arranged chronologically, of some of the most audacious and extensive frauds of the nineteenth century. All had a disastrous impact on large numbers of people, and for some resulted in financial ruin, political disgrace, imprisonment, intellectual humiliation or suicide. All examine the crucial interface between the fraudster and the victim, since inevitably each wanted something from the other. The driving forces were money and celebrity. The methods of perpetrating the fraud may have differed – word of mouth, masquerade, public announcements, pamphlets, official documents and outright forgery – but all did no more than invite the victim into the snare. Entrapment occurred sometimes through trusting innocence and a need for financial security, sometimes from greed, often in the face of dire warnings from observers who were not swept along in the tide of enthusiasm. Those with a desire for fame and respect tried to boost their own standing by attaching themselves to an individual who had gained sudden publicity, and when the story was a good one, people just wanted it to be true. All these scenarios illustrate not only the depths to which people will sink to defraud others, but the scale of human credulity that provided them with so many victims.

  In the stories that follow it is sometimes unclear who the hoaxer actually was. There can be no doubts about Whitaker Wright, whose personal control over an empire worth millions enabled him to falsify company accounts when he gambled away investors’ funds in shady Stock Exchange deals, but did George Hollamby Druce really mastermind his claim to the £16 million Portland estate or was he himself the tool of a crooked solicitor? Naval hero Thomas Cochrane went to prison for a colourful and complex fraud worthy of one of his great victories; but was he the victim of a miscarriage of justice?

  A fraudster can often become his own victim. What starts as a carefully designed plot can develop into a personal obsession, until the boundary between falsehood and reality blurs. Fraudsters can come to believe passionately in the truth of their claims, and feel wronged and cheated of their rights to the end of their days, sometimes even passing the torch to their children. Alexander Humphrys undoubtedly knew exactly what he was doing when he forged documents showing he was the Earl of Stirling, but his later rantings speak of self-delusion and paranoia.

  Most fraudsters refuse to admit guilt even in the face of overwhelming evidence of their crimes. Even Ernest Terah Hooley, who cheerfully stated that many of his deals were extremely dubious, still managed to convince himself that on balance he was a benefactor to society. Thousands of small investors would no doubt have disagreed with him.

  Not all these fraudsters are unmitigated rogues. It is hard not to admire Mary Baker, the high-spirited shoemaker’s daughter who overcame her humble upbringing and conned the intellectuals of her day into believing she was a foreign princess. Others are less attractive, such as John Sadleir, the cold-hearted schemer who brought untold misery to the small farmers he represented in parliament.

  We may hope that by studying past frauds we can protect ourselves in future, but there will always be fraudsters and there will always be victims: only the methods change. People still need to believe.

  Linda Stratmann

  ONE

  The Price of Omnium

  At 1 a.m. on Monday 21 February 1814, John Marsh, keeper of the Packet Boat public house in Dover, was enjoying a quiet pipe with local hatter Thomas Gourley when he heard a violent and insistent knocking at the door of the Ship Inn opposite and a loud voice demand that a post-chaise and four be brought at once. The night was dark, bitterly cold and misty, yet Marsh left his warm fireside to see what was happening, calling to Gourley to follow him with candles. His curiosity was understandable, since Dover was on constant alert for news from the Cont
inent.

  This was a critical period in European history and a time of agonising public suspense. Following his disastrous Russian campaign of 1812, Napoleon was in retreat but far from beaten. Rejecting attempts by Britain and her Allies to negotiate a peace in November 1813, he concentrated his forces in France. In January and February 1814 Napoleon’s armies won a series of victories, which were eagerly followed in the British press. While the spectre of invasion had vanished, Napoleon – alive, free and at the head of an army – remained a potent threat. The peace of Europe depended on the fate of one man, and in Britain news of his final defeat was awaited with breathless expectation.

  Outside the Ship Inn was a stranger in a grey military greatcoat and fur cap. The Ship’s servants opened the door and admitted him: Marsh and Gourley followed, not wanting to miss the excitement. Soon the landlord, Mr Wright, appeared. In the candles’ glimmer the stranger looked agitated, his bewhiskered and pock-marked face reddened by the cold. Under the greatcoat, which was very wet, he wore an unfamiliar-looking scarlet uniform trimmed with gold, much dirtied as if from battle, with a silver star on the breast and a medallion around his neck. He announced that he had just arrived from France, was the bearer of the most important dispatches that had been brought to the country in twenty years, and demanded that, in addition to the post-chaise for himself, an express messenger be provided at once, as he wished to send an urgent letter to Port-Admiral Foley in Deal. Everyone scattered to attend to his demands without question. A closer look might have revealed that the dirt of battle had been simulated with boot-blacking, while the observers would have been surprised to know that a few minutes earlier their visitor had been standing by the nearby millstream throwing hatfuls of water over his coat to give the impression of a dousing with sea-spray.

  William St John, an agent for a London newspaper who was staying at the Ship, found the stranger pacing impatiently about the coffee room. St John approached and asked about a messenger he had been expecting, but the officer said he knew nothing about that, and dismissed him brusquely, saying that he wanted to be left alone as he was extremely ill. The agent did as requested, just as pen, ink and paper were brought.

  The letter, addressed ‘To the Honorable J. Foley, Port Admiral, Deal’, revealed the officer to be Lieutenant-Colonel du Bourg, aide-de-camp to the distinguished military commander Lord Cathcart. Saying that he had just landed in Dover from Calais, the news he brought was explosive. The Allies, he wrote, had obtained a final victory over Napoleon, and, most importantly: ‘Bonaparte was overtaken by a party of Sachen’s Cossacks, who immediately slaid [sic] him, and divided his body between them. – General Plastoff saved Paris from being reduced to ashes. The Allied Sovereigns are there and the white cockade is universal; an immediate peace is certain.’1

  It was what everyone had been hoping for. Wright’s servant William Ions drew up to the front door on a pony, was handed the letter and set off at once for Deal. But this was not the only express sent from Dover that night. Even at that late hour the news spread rapidly, and hastily prepared messages were dispatched to London. Du Bourg offered to pay Mr Wright in gold napoleons, but the landlord was unsure how much these coins were worth and was unwilling to accept them. Reluctantly, the supposed messenger from France pulled some English pound notes from his pocket, explaining that they had been there for some months. His task done, du Bourg took his seat in a post-chaise bound for Canterbury, and sped away into the frosty night.

  It was 3 a.m. before William Ions arrived in Deal and delivered the letter to Admiral Foley’s servant. The Admiral read the letter in bed, then rose to question Ions about its origins. His suspicions may have been aroused by the letter being addressed to ‘J. Foley’, since his name was Thomas. The sender must have anticipated that Foley would at once transmit the news by telegraph (a system of moving wooden shutters mounted on towers) to the Admiralty offices in London, but here the plan foundered, thanks to that great unpredictable, the English weather. Even as it grew light, the fog remained so thick that it was impossible to use the telegraph. Neither was Foley as gullible as had been hoped, since he dispatched his own messenger to Dover to check the credentials of du Bourg.

  It was several hours before the galloping expresses brought the news to London, and when they did few people could have been more interested in its ramifications than the members of the Stock Exchange.

  By 1814 the London Stock Exchange had acquired most of the features we would recognise in it today. The present-day building had been opened in 1802; there was an official code of rules, first printed in 1812, and an authorised price list. Dealing was a specialised profession, though not a popular one with the public. Samuel Johnson’s dictionary famously described the stock-jobber as ‘a low wretch who gets money by buying and selling shares in the funds’.2 One type of deal, time-bargains, was especially frowned upon – indeed they had been made illegal in 1734, but despite this remained common. Speculators would agree to buy stocks at a fixed price at some future date, but without actually paying for or taking possession of their purchases, gambling on a rise in price before payment was due, which would enable them to sell at a profit. Anyone who held, even briefly, important news unknown to other speculators could make a fortune in just a few hours. To control these bargains, the Stock Exchange Committee had established eight regular settlement days in each year, when the promised payments and deliveries had to be made.

  The main stocks dealt in were government securities, a popular investment since the establishment of the national debt in the reign of William III. These funds were subject to great fluctuations in price, and their value was dependent not only on the economy but on whether the country was at peace or war. One important fund for speculators – Omnium – was an especially sensitive barometer of news. In 1802 the commentator Simeon Pope, addressing investors in Omnium, stated:

  It seems … somewhat paradoxical that while the immense funded property of the country rests on a foundation which is cemented with its greatest and dearest interests, that it should be subject to be operated on by almost every tide of vague opinion, and agitated by fluctuations of rise and fall, by the mere fleeting rumour of the day – the too common offspring of scheming manoeuvres and venal fabrication.3

  Since communication from abroad could be slow and uncertain, news reports causing sudden changes in the market were impossible to correct quickly, and great efforts were made by the Stock Exchange to establish a reliable system of messengers.

  The business of the Stock Exchange opened each weekday morning at 10 a.m., but on Monday 21 February 1814 messengers from Dover and Northfleet had started to pour into London before that hour, each one confirming Napoleon’s defeat, and dealers were seized with excitement at the prospect of substantial gains. Some may have been wary at first, but soon most were caught up in the tide of greedy expectation, and the floor of the Exchange opened in a scene of noise and confusion. There was a particular sense of urgency, since the next settlement day was the following Wednesday.

  Omnium opened at 27½ (all prices were quoted in pounds sterling) but quickly rose since everyone in the know clamoured to buy; it soon soared to 29. In the midst of the flurry the Stock Exchange dispatched messengers to government offices to obtain confirmation of the rumour. Had Foley been able to send his telegraph, it would have set an official seal on the news, rapidly forcing prices still higher, but this was not to be. The poor weather did mean, however, that no further information of any kind was available.

  The news flew around London and soon the City was in a state of great agitation. People ran to shops and offices, looking in and shouting out what they had heard, one man claiming to have seen a letter from the Lord Chancellor confirming the report. As the tidings passed so they received embellishments, which added to the believability of the tale:

  it was boldly stated that two Messengers had, in the course of the morning, arrived at the Foreign Office, decorated with the white cockade, the favourite colour of the BOURBONS
, and worn by all the military under the former government.4

  In one story, Napoleon had been murdered by his own troops; in another, the Cossacks had marched into Paris with the tyrant’s head on a pike. Citizens who could leave their businesses and homes poured out onto the streets determined to celebrate in a spirit of universal joy. Public offices were besieged with eager enquirers, and all businesses in London seemed to come to a standstill, save one – the Stock Exchange, where the price of Omnium was still climbing, and appetite for the stock seemed insatiable. Still more profits were anticipated by the springing-up of a thriving business in side bets on Napoleon’s fate.

  While London remained in a state of feverish excitement, other remarkable scenes were being enacted in Dartford, where Phillip Foxall, landlord of the Rose Inn, had received a note at 7 a.m. from an acquaintance, Ralph Sandom, asking him to send over a chaise and pair to him in Northfleet and have ready four good horses to go on to London. The chaise was duly sent and it returned quickly, driving at a furious pace. The occupants were Sandom and two strangers dressed in blue coats and cocked hats with white cockades. Sandom revealed that the men were French officers and were very tired as they had been in an open boat all night and had news of the very greatest consequence. Foxall gave them a fresh chaise and they dashed away at speed. He failed to notice that the officers’ coats, which were not even identical, were not of a military cut, that their hats were such as could be bought anywhere and the white cockades had been home-made by sewing ribbon on to paper.

  Before Sandom and his companions entered London, which they reached in the late morning, the horses and carriage were decorated with boughs of laurel. The three men entered the heart of the city, driving over London Bridge, down Lombard Street, along Cheapside, over Blackfriars Bridge, and down the New Cut. As they went they cried out slogans such as Vive le Roi! and Vivent les Bourbons! and distributed slips of paper with similar messages. The occupants of the chaise, believing that they were the first to bring the glad tidings to the city, were surprised to be greeted by crowds in the streets who already seemed to know the news and who mobbed their vehicle so that they were frequently obliged to stop. The post-boys naturally anticipated that their important passengers would alight at some government office, but to their surprise the journey finally came to an end at the Marsh Gate hackney coach stand, where the men got out, took off their military hats, put on round ones, and calmly walked away.