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The fraudster who made up a country

The supposed location of Poyais

Nearly 200 years ago, Gregor MacGregor pulled off one of the most “elaborate and deadliest frauds in history”, says Mark Dent in The Hustle. The Scottish con man did so by taking advantage of the “dot-com bubble of the early 19th century”: South America. In the wake of the Napoleonic Wars, British investors were “swimming in cash and optimism” – and pouring money into newly independent South American countries such as Colombia and Chile.

In this crazed environment, MacGregor went about London presenting himself as ruler of Poyais, a fake South American country in what is now Honduras. He designed a Poyaisian national flag and coat of arms, and handed out brochures outside offices in Edinburgh, Glasgow and London. Investors lapped it up, and he was able to sell sovereign bonds for his imaginary country worth £200,000 – the equivalent of £24m today. Hundreds of Brits exchanged their life savings for Poyaisian money and land grants, and set sail for the new country.

They soon realised their mistake. Having been promised a European-style capital city with a theatre, the Poyais settlers instead found a few bamboo huts. Many withered away from “hunger, exhaustion and malaria”, and only one third made it back to England alive. Meanwhile, MacGregor lined his pockets and threw debauched parties in London – before fleeing to France when news of the fraud emerged. So “the scam ended as so many do, with the charismatic con artist getting away unscathed”.