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In the last issue we wrote about Cassie Chadwick, the woman who really should have had the Ponzi scheme named after her — as she came up with it long before Ponzi was even born., A fascinating story for sure, but here’s another story that moves father East, to New York City, and to the man who may have been the absolute father of the genre of Nigerian Letter Scams and numerous Bunco schemes.
Victor Lustig was born in Austria-Hungary in 1890. As a boy and young man, he became fluent in several languages and could charm the fangs off of a snake. Craving wealth when he became an adult, he watched and studied, focusing on those places that might be a gathering place for the monied aristocrats. He began to set up shop on luxury ocean liners; what better place to find a veritable nest of potential victims?
A favorite topic of dinner conversation was personal wealth, of course. “And what is your business, Sir?” Lustig would all but whisper that he was fortunate indeed, having discovered an endless source of cash. To prove his claim to the new-found acquaintance, he would agree to show them his prize — the Money Box. — conveniently being housed in his stateroom. It looked like a mahogany steamer trunk and it contained sophisticated looking printing machinery. With the touch of a switch, it would almost magically turn a single $100 bill into two $100 bills over a period of about three hours. Secret chemicals, he explained.
And one hundred US dollars was a significant amount of money in the 1920’s.
By the end of the ocean voyage, there were virtual bidding wars for ownership of the Money Box — the one that Lustig hinted that he ‘might sell’ for a high enough price.’ It would go to the highest bidder just before the ship docked at its final destination. There was always an extra hundred or two in the machine, just in case an interested party required “one more demonstration.” As Lustig disembarked with a suitcase containing anywhere from $10,000, $20,000 or $30,000, the lucky new owner of the money box would disembark with his endless wealth machine and the smile of a winner. One of them was always disappointed; it was never Lustig.
It was not long before Lustig was a wanted felon throughout Europe and the US. Each scheme was more outlandish than the last — the mysterious man, Count Lustig, who had earned the nickname for his suave and worldly demeanor, was known far and wide as the smoothest con man of all.
In 1925 he set his sites on the Eiffel Tower, a rusting blight on the Parisian landscape. Some wanted to preserve it; others wanted it torn down. Lustig decided to sell it! He did his homework and learned the names and addresses of the largest area scrap-metal dealers, then
sent them letters, very confidential letters, representing himself as the Deputy Director of the Ministere de Postes et Telegraphes. The stationary was expensive, the writing was perfect, and the story was believable. Demanding absolute secrecy, he offered to privately meet with them to discuss an arrangement that could prove very lucrative.
Next, in conversations at the Hotel de Crillon, one of the city’s most upscale hotels, he revealed that the Eiffel Tower was to be scrapped and bids would be taken for the right to demolish the tower and take possession of 7,000 tons of metal. On the day of the talks, Lustig rented limousines and gave Eiffel Tower tours to potential bidders. He then chose one of the big money dealers to approach and hint that the bid could be rigged — for the right price. Andre Poisson was sure than any public official bold enough to suggest a bribe must be legitimate, so he handed over $70,000 to “own” the Eiffel Tower.
Lustig, with a briefcase full of Poisson’s money, went back to Austria and waited for the story to become public. When nothing did, he concluded that Poisson was too embarrassed to report him. The spoils had been so great, that he returned to Paris to try it again with a new group of scrap-metal dealers. Someone, however, had alerted the police and Lustig fled to the US because he knew that there were plenty of people in the States just waiting to purchase magic money machines. In more than three dozen arrest cases he either escaped from jail or beat the charges It never seemed to be the money; he had plenty. It was the winning of the cat mouse game every time.
Almost.
Back in the US, he teamed up with a Nebraska chemist named Tom Shaw. Together, they put together a counterfeiting operation so big and so well run that the “Lustig money” became a very real threat to the US monetary system. The Secret Service was on his trail, but it took two strokes of luck to track him down. The first was that he funneled counterfeit money to a past victim — who then was apprehended. The victim, a Texas Sheriff, was so angry that he gave a full description of the Count to the authorities. The second was Billy May, Lustig’s girlfriend, who found out that her man was having an affair with Tom Shaw’s mistress and placed an anonymous phone call to the New York authorities — where he happened to be at the time.
Working off that tip, they found him strolling down Broadway one Sunday evening in May, 1935, carrying a suitcase. Believing they had him bare-handed and they would find freshly printed bank notes from various Federal Reserve series, they opened the suitcase. All they found inside was expensive clothes. Inside his coat pocket wallet, however, was a key — and it led them to a Times Square subway station locker containing $51,000 in counterfeit money and the plates used to print it.
They held him at the Federal Detention Headquarters in New York while he waited for his September trial date. When that day came, however, he was gone. Vanished in broad daylight from a facility that was believed to be escape proof at the time — using bedsheets as a rope. Amazingly, nobody noticed when a.”window washer,” dressed in prison-issue dungarees and slippers, casually wiped at windows as he shimmied down the building to freedom.
He walked free for a month, then was recaptured in Pittsburgh, pled guilty to the original charges surrounding the $51,000, and was
transferred to Alcatraz to serve a 20 year sentence. He escaped that sentence, too, but it was very quietly and with no fan fare. The Count’s last escape was death, in Alcatraz, in 1957.