Review: Swindling Billions: An Extraordinary History by Kari Nars

Marshall Cavendish reviews Swindling Billions, which includes the history of the elusive Caribbean state of Poyais.

In 1821, a charismatic stranger arrived in London with a great investment opportunity — overseas property in the Caribbean state of Poyais.

General Gregor MacGregor, president of Poyais, became the toast of the city. He hosted property-shilling events; published a 350-page guidebook depicting Poyais as an English-speaking principality with fertile land, sound infrastructure and untapped mineral resources; received a massive loan from a UK bank; and was even endorsed as an envoy by King George IV.

Unsurprisingly, he sold a lot of property. There were a few problems with all this: Poyais wasn’t a real country; the land wasn’t MacGregor’s to sell. It was, in reality, a large disease-ridden swamp.

Sound familiar? Many of the massive cons outlined in Kari Nars’s book Swindling Billions will evince sad groans of recognition from Irish readers. Those who bought foreign properties in shady circumstances can, of course, console themselves that, unlike MacGregor’s victims, they didn’t end up dead of diphtheria in a third world backwater.

Nars’s tales of artificially inflated bubbles (the 18th-Century South Sea Bubble), nefarious pyramid schemes (like the one operated by Bernie Madoff) and venal corporate fraud (like that perpetrated by Enron) will have a special resonance for Irish people who suspect, even if they can’t prove, that their economic woes are the result of similar snake-oil merchants.

“Rich booming economies are a hunting ground for conmen,” says Nars, with the same mixture of sadness and schadenfreude that permeates his book. But he also observes that “Recessions catch what the auditors miss!” (a quote from the economist JK Galbraith) and that it’s in downturns that fraudulent behaviour comes to light.

In the wake of Ireland‘s crash we have had the comeuppance of rogue solicitors like Thomas Byrne and Ponzi-scheme operators like Breifni O’Brien, as well as the revelation of an irresponsible banking culture which may or may not have involved criminality (“That’s usually very hard to prove,” sighs Nars, who as a retired Finnish bank official, should know about such things). His own thesis is that con-artistry is a natural offshoot of capitalism: “The naked truth is that rich Western societies encourage values, attitudes and personality structures conducive to white-collar crime.”

And there are two sides to all this, as Nars depicts it. There are the conmen: charismatic, egotistical sociopaths with nerves of steel. And there are the conned: naive rubes motivated by greed and wishful thinking.

Only these last qualities could explain how Czech fraudster Victor Lustig managed to sell the Eiffel Tower for scrap to credulous businessmen in the 1920s — not once, but twice; or how, in the same decade, Charles Ponzi managed to convince so many of his investment scheme’s 100pc returns — so remarkable was Ponzi’s con, that pyramid schemes were subsequently dubbed ‘Ponzi-schemes’.

“It was just a big Ponzi,” said Bernie Madoff, when his own billion-dollar scam was uncovered.

“Often conmen couldn’t operate without the greed of their victims,” says Nars. “They were slaves to the ‘last-sucker’ syndrome. They thought that if things started to look bad they could jump the ship and let the other suckers suffer the losses.

“A lot of investors in these circumstances have a very high opinion of their intelligence. They think they are raking in superb profits because they are smarter than average, but they’re often not that smart at all.”

Nars’s book is about the biggest and the most audacious swindles, but he also mentions a few lesser cons that might have been worth a look (an 18th-Century bubble company based on the collection and sale of human hair!), and he believes that there are many more we may never hear about. “When people lose money in schemes like this, they tend not to talk about it for fear of looking stupid,” he says.

“Sometimes they don’t even complain because they don’t want to risk telling the police or tax authorities where the hell they got the money in the first instance.”

Nars believes that swindling is “a growth industry”, but only because we can’t resist the lure of the easy buck and can’t seem to remember that things are cyclical.

“In Finland in the 1990s we had a banking crisis and now it’s Ireland’s turn,” he says.

“And it will happen again — people will again think that stock prices or property prices will rise forever and will rush to invest. And at times like that, conmen find it very easy to get money.

The investor Sir John Templeton once said something that is still 100pc true: ‘The four most expensive words in the English language are ‘This time it’s different’.”

For the original review go to

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