The biggest scams in history

The biggest scams in history run from the Eiffel Tower sold for scrap by Victor Lustig in 1925 to the roughly $8 billion in customer funds missing from FTX in 2022, by way of Charles Ponzi's scheme in 1920 and Bernie Madoff's, whose clients lost about $17.5 billion in principal. Here are twenty-one of them, each with its year, its figure and its source, plus what it teaches you about spotting the same trap today: the sixteen cases from MATERIUM's first season and five more that also made history.

The biggest frauds in history, in one table

What were the first big scams in history?

The South Sea Bubble (1720). In London, the South Sea Company won a monopoly on trade with Spain's colonies in the Americas in exchange for converting British government debt into shares. With exaggerated promises, shares bought on credit and favors to members of Parliament, its stock rose from £128 in January to £1,050 in June 1720, according to the Federal Reserve Bank of New York, and by September it was worth £175. Isaac Newton is often named among those who lost money. We tell the full story in the South Sea Bubble case.

John Law's system (1719-1720). In Paris, the Scotsman John Law combined a bank that issued paper money with a trading company holding the rights to Louisiana: the Mississippi Company. Its shares reached 10,000 livres; when shareholders tried to turn their paper into gold, the system collapsed and inflation soared.

Gregor MacGregor and Poyais (1822). A general from Venezuela's war of independence invented a country on the Mosquito Coast, sold its bonds on the London market for £200,000 and shipped some 250 settlers to an empty jungle; about 180 of them died. We tell it in the Gregor MacGregor case.

Baldomera Larra (1876). The daughter of the Spanish writer Mariano José de Larra opened a savings fund in Madrid that promised 30% a month and paid the first depositors with the money of the next ones. She fled when the claims started, was arrested in Paris and extradited. The full story is in the Baldomera Larra case.

Which 20th-century scams are still the most famous?

Charles Ponzi (1920). He promised 50% in 45 days with international postal reply coupons and took in between $15 and $20 million from about 40,000 people. He gave the fraud its name. The full story is in the Charles Ponzi case.

Victor Lustig (1925). He introduced himself as the deputy director general of France's Ministry of Posts and Telegraphs and sold the Eiffel Tower for scrap to the businessman André Poisson. He tried to repeat the trick with another buyer, but the second attempt failed. He later turned to counterfeiting money in the US, served time in Alcatraz and died in prison in 1947. Read the Victor Lustig case, which is also the first episode of the series.

Frank Abagnale (1960s). His story as a fake pilot, doctor and lawyer, told in his memoir and in the movie Catch Me If You Can, is largely a legend: the researcher Alan C. Logan used prison records to show that he spent much of the years he claimed to be conning the world behind bars. Abagnale did commit fraud, but on a much smaller scale. We cover him in more detail in our list of famous con artists.

Jordan Belfort (1989-1996). His firm, Stratton Oakmont, wasn't on Wall Street but on Long Island, and it pumped up cheap stocks to sell them at the top. In 2003 he was sentenced to four years, served 22 months and was ordered to pay $110 million in restitution.

Sergei Mavrodi and MMM (1994). The great pyramid of post-Soviet Russia collapsed in July 1994 with between 5 and 10 million people affected. Mavrodi was arrested for tax evasion, his victims blamed the government, and that same year he was elected to parliament.

What are the largest scams of the 21st century?

• Enron (2001). The Houston energy company hid debt and inflated profits through special-purpose entities until it went bankrupt in December 2001. Its CEO, Jeffrey Skilling, was sentenced to more than 24 years.
• WorldCom (2002). The telecom giant run by Bernard Ebbers inflated its results until the fraud came to light in 2002; at $11 billion, it was then described as the largest securities fraud in history. Ebbers was convicted in 2005 and sentenced to 25 years.
• Lou Pearlman (2007). The creator of the Backstreet Boys and NSYNC raised more than $300 million through businesses that didn't exist. He pleaded guilty in 2008 and died in prison.
• Bernie Madoff (2008). The largest known Ponzi scheme. Sentenced to 150 years in 2009, he died in prison in 2021.
• Allen Stanford (2009). His bank in Antigua sold certificates of deposit with impossible returns, mostly in Latin America: $7 billion and a 110-year sentence.
• OneCoin (2014-2017). A cryptocurrency with no real blockchain, sold as a pyramid; more than $4 billion, according to the FBI. Ruja Ignatova's whereabouts have been unknown since 2017.
• Fyre Festival (2017). A luxury festival in the Bahamas, promoted by celebrities, that never took place as promised. McFarland was sentenced to six years in 2018; prosecutors put the losses from his two frauds at more than $26 million.
• Anna Sorokin (2017). She posed as a German heiress in New York and in 2019 was sentenced to 4 to 12 years for swindling banks, hotels and friends out of more than $200,000. Her story is told in the Anna Sorokin case.
• The Tinder Swindler (2017-2019). Shimon Hayut, who called himself Simon Leviev and claimed to be the son of a diamond tycoon, has been convicted in Finland and Israel of other frauds, but he hasn't been tried for the events told in the Netflix documentary.
• Theranos (2018). Elizabeth Holmes promised hundreds of tests from a single drop of blood. A jury found her guilty of defrauding investors (and acquitted her on the patient-fraud charges); in 2022 she was sentenced to more than 11 years.
• Wirecard (2020). The German fintech, listed on the DAX index, admitted that €1.9 billion on its balance sheet probably didn't exist, and filed for insolvency.
• FTX (2022). Sam Bankman-Fried's exchange used its customers' money; about $8 billion was missing. He was sentenced to 25 years in 2024.

What do the most famous scams of all time teach us?

That the trap repeats itself in a new disguise. Read together, they show four patterns:

1. A promise nobody checks. A country (Poyais), a monument (the Eiffel Tower), a machine (Theranos), a currency (OneCoin).
2. Prestige or fame as a guarantee. A former Nasdaq chairman, a general, Instagram celebrities, some of the best-selling bands in the world.
3. New money pays the old. From Baldomera to Madoff, by way of Ponzi, Stanford and Pearlman.
4. The system arrives late. Auditors, regulators and the press took years to see what, in hindsight, was in plain sight.

MATERIUM turns each case into a rule for recognizing it: you'll find them all in The Laws of Deception. If you want to see them told on screen, the series is on the episodes page, and here are other scam documentaries worth watching.