In 1822, a Scottish military general named Gregor MacGregor made a fortune selling settlers and investors on the dream of a new South American paradise.
The only problem? It was all an elaborate lie.
Who's up for a story?
👇👇👇
The only problem? It was all an elaborate lie.
Who's up for a story?
👇👇👇
1/ General Gregor MacGregor was in need of a new adventure.
The former British Army officer had become a mercenary, fighting on behalf of Venezuela and New Granada in their struggles for independence against the Spanish.
He was not an idealist. He only sought one thing.
Glory.
The former British Army officer had become a mercenary, fighting on behalf of Venezuela and New Granada in their struggles for independence against the Spanish.
He was not an idealist. He only sought one thing.
Glory.
2/ After Venezuela was liberated from Spanish rule, MacGregor led various private campaigns in Latin America.
In 1820, he landed on the Mosquito Coast, a 200-mile stretch of coastline on the Caribbean side of modern day Nicaragua and Honduras.
Here, he would find his glory.
In 1820, he landed on the Mosquito Coast, a 200-mile stretch of coastline on the Caribbean side of modern day Nicaragua and Honduras.
Here, he would find his glory.
3/ The land was visually pleasing, but completely inhospitable and unfit for cultivation.
But those details wouldn't stop MacGregor!
He negotiated with the local king and acquired 8 million acres in exchange for rum and jewelry.
He gave the new land an exotic name: Poyais.
But those details wouldn't stop MacGregor!
He negotiated with the local king and acquired 8 million acres in exchange for rum and jewelry.
He gave the new land an exotic name: Poyais.
4/ Then, the elaborate scheme began.
MacGregor arrived back in London in 1821 and started spreading the word of his tropical paradise.
He referred to himself as the "Cazique" (Spanish-American word for Chief or Prince) of Poyais.
The Poyais Scheme was officially in motion.
MacGregor arrived back in London in 1821 and started spreading the word of his tropical paradise.
He referred to himself as the "Cazique" (Spanish-American word for Chief or Prince) of Poyais.
The Poyais Scheme was officially in motion.
5/ MacGregor began to seek investors and settlers.
He opened offices across the UK, sharing fake documents and images to inspire confidence in the perfection of this new land.
He even published a book on Poyais under a fake name to imbue confidence.
He opened offices across the UK, sharing fake documents and images to inspire confidence in the perfection of this new land.
He even published a book on Poyais under a fake name to imbue confidence.
6/ It was time to profit from the scheme.
MacGregor offered Poyaisian land certificates to settlers and investors, raising their price by almost 100% as demand surged.
500+ individuals purchased Poyaisian land, including many who invested all of their savings.
MacGregor offered Poyaisian land certificates to settlers and investors, raising their price by almost 100% as demand surged.
500+ individuals purchased Poyaisian land, including many who invested all of their savings.
7/ But MacGregor was not done yet.
He issued £200K in Poyaisian bonds (~£25M today) backed by the (non-existent!) revenues of the Poyaisian government.
The 6% yield was attractive during a period in which British government bond yields had fallen below 3%.
Investors went wild.
He issued £200K in Poyaisian bonds (~£25M today) backed by the (non-existent!) revenues of the Poyaisian government.
The 6% yield was attractive during a period in which British government bond yields had fallen below 3%.
Investors went wild.
8/ In 1822, the first ship filled with Poyaisian settlers set sail from London.
MacGregor, never satisfied, hit them with one last scam, trading them worthless Bank of Poyais Dollars (printed in Scotland) for their remaining British pounds.
With that, he bid them farewell.
MacGregor, never satisfied, hit them with one last scam, trading them worthless Bank of Poyais Dollars (printed in Scotland) for their remaining British pounds.
With that, he bid them farewell.
9/ Upon arrival in Poyais, the settlers, many of whom had worn their best outfits for the landing, quickly realized they had been deceived.
To make matters worse, shortly after arrival, a hurricane blew through the region, destroying their ships.
To make matters worse, shortly after arrival, a hurricane blew through the region, destroying their ships.
10/ A combination of inhospitable land and local diseases (yellow fever and malaria) would take its toll on the settlers.
Of the ~250 settlers who would arrive in Poyais across seven voyages, just ~50 would survive.
All the while, Gregor MacGregor counted his money in London.
Of the ~250 settlers who would arrive in Poyais across seven voyages, just ~50 would survive.
All the while, Gregor MacGregor counted his money in London.
11/ But, like most good fraudsters, Gregor MacGregor was relentless.
By the time a few survivors returned to London and told the story of their ordeal, he was already in France, peddling Poyais on more unsuspecting settlers and investors.
By the time a few survivors returned to London and told the story of their ordeal, he was already in France, peddling Poyais on more unsuspecting settlers and investors.
12/ Incredibly, MacGregor would never be held accountable for the elaborate (and deadly!) fraud.
He was eventually arrested in France but acquitted after prosecutors failed to prove intent.
After a few more schemes, he moved to Venezuela, where he died at his home in 1845.
He was eventually arrested in France but acquitted after prosecutors failed to prove intent.
After a few more schemes, he moved to Venezuela, where he died at his home in 1845.
13/ The story of Gregor MacGregor's Poyais Scheme is an incredible one. It should serve as a cautionary tale for investors.
If something seems too good to be true, it probably is.
I hope you enjoyed this story as much as I did. Stay tuned for more!
If something seems too good to be true, it probably is.
I hope you enjoyed this story as much as I did. Stay tuned for more!
14/ For more educational threads on money, finance, and economics, check out my meta-thread below. Stay tuned for more!
