Gregor MacGregor returned to Britain in 1821 an exotic war hero, a self-styled Cazique (or prince) of Poyais. His stories of this democratic and fertile Latin American land prompted investors to snap up land certificates and £200,000 in Poyaisian sovereign bonds.
MacGregor had fashioned a tale to fit the obsessions of the age — democracy and settlement — and a vogue for exotic investments. He was acquitted, in an early example of failure to prosecute complex fraud, and lesser scam artists imitated his hoax.
It is a tradition that runs from the mania for Dutch tulip bulbs in the 17th century through the stamp scheme of Charles Ponzi in the 1920s. The latest incarnation is MMM, a “social financial network” powered by YouTube and the cryptocurrency bitcoin and run by Sergey Mavrodi, a former Russian parliamentarian and convicted fraudster.