Charles Ponzi: What Makes a Con Artist?

by T.D. Thornton

When you think of the history of con artists, what images come to mind?

Perhaps it’s the dashing “sharpie in a fedora” stereotype that hearkens to the Roaring Twenties. Maybe it’s the juxtaposition of financial ruin with too-good-to-be-true opulence, the way Charles Ponzi leveraged greed and gullibility to bilk of a nation of suckers blind. Or it could be the devious yet debonair horse-betting tandem immortalized by Paul Newman and Robert Redford in the classic 1973 film about confidence hustling, The Sting.

Now fast-forward to today, and consider how those images clash with those of modern con artists who make headlines in the 21st Century: Ripoffs that involve manipulating a victim’s confidence are increasingly perpetrated by anonymous strangers. The tools of the trade have shifted away from charismatic, in-the-flesh personal contact. Grifters have evolved from using telephones to the Internet to dealing in emerging cryptocurrencies that are perceived as lucrative but are not widely understood, like Bitcoins.

Part of the enduring allure of con artists in books, movies and television can be attributed to our fascination with criminals from earlier eras. A century ago, con men were widely reviled as ruthless predators—just the way we view modern fraudsters today. It is only the haze of nostalgia and the passage of time that lend an aura of mystery to the dark art confidence hustling.

Charles Ponzi; My Adventures with your moeny

Charles Ponzi, after whom the infamous “Ponzi Scheme” was named.
Image is in the public domain via playingintheworldgame.wordpress.com

My initial interest in wanting to write My Adventures with Your Money was sparked in 2007 when I stumbled upon a copy of The Big Con: The Story of the Confidence Man and the Confidence Game in a secondhand bookstore in Vermont.

David W. Maurer’s 1940 tome is the definitive book about the history and inner workings of confidence manipulation. At the time of the book’s publication, con men guarded their schemes and methods as carefully as magicians abide by a strict code of honor, so it’s amazing that the University of Louisville linguistics professor got access at all to the inner workings of America’s fraternity of grifters.

“The methods by which I collected my material were not in any way bizarre or unusual,” Maurer explained in the introduction to The Big Con. “I did not resort to false whiskers…I did not try to join any mobs incognito. I simply talked to confidence men, who, little by little, supplied the necessary facts, facts which were not available in libraries or police records, facts which could come only from the criminals themselves.”

Between 1870 and 1940, con artists ranked at the top of the criminal totem pole, largely because they stood apart from thugs who resorted to violence to separate victims from their bankrolls. The term is shortened from “confidence artist,” which means to foster someone’s trust for the sole purpose of exploiting it.

According to Maurer, a con man systematically researches “marks” (victims), slickly gains their confidence, reels them in with the lure of easy (or illicit) riches, then seals the deal by presenting the swindle as an irresistible “too good to be true” proposition.

Once prey become ensnared, the con artist disappears with their “investments.” The goal is to get away before the victims figure out they’ve been duped, or—better yet—to “cool them out” while setting them up for further, more elaborate exploitation.

In most cases, confidence hustles work because suckers are so embarrassed about having being taken that they don’t report the crimes. Other times, they don’t even know they’ve been ripped off (like stock frauds chalked up to bad luck).

When one reads about how easily people fell for the ruses of con artists a century ago, there is an inherent sense of “That couldn’t possibly happen today!” But Maurer explains how that notion is not grounded in reality:

My Adventures with your Money - 9781250054371

Confidence games are cyclic phenomena. They appear, rise to a peak of effectiveness, then drop into obscurity. But they have yet to disappear altogether. Sooner or later they are revived, refurbished to fit the times, and used to trim some sucker who has never heard of them.

That explains why those emails that plague your inbox from a “Nigerian prince” imploring for help with a million-dollar bank transfer operate on the same principle as the Spanish Prisoner scam that con artists worked successfully as far back as the 16th Century.

And the pyramid scheme that netted Charles Ponzi millions in illicit profits and five years in jail in 1920 is the same gimmick that earned Bernie Madoff billions and 150 years behind bars in 2009—although few people are aware that the idea for a multi-level investment scam promising unsustainable returns traces to at least 1843, when Charles Dickens described that exact ploy in his novel, The Life and Adventures of Martin Chuzzlewit.

And The Sting? It appears as if the plot for the iconic Academy Award-winning movie was also conned from its original author.

In 1974, confidence-hustle chronicler Maurer filed a $10 million lawsuit for copyright infringement against Universal Studios, alleging that his description of the “wire” horse racing scam had been lifted verbatim from The Big Con.

Two years later, Maurer received an undisclosed, out-of-court settlement. The grifters whose methods he had codified decades before would have called such a payment “hush money.”


T.D. THORNTON is the author of My Adventures with Your Money: George Graham Rice and the Golden Age of the Con Artist. A Boston-based writer with a keen interest in the glorious underbelly of America, Thornton wrote the award-winning book Not by a Long Shot—A Season at a Hard-Luck Horse Track in 2007. His journalism and creative nonfiction have appeared in the New York Times, Boston Globe, Slate, The Daily Beast and McSweeney’s. Find out more at www.tdthornton.net and through Twitter @thorntontd.

Tagged with: , , , , ,
Posted in Contemporary History, Modern History

The History Reader Newsletter