January 11, 2012

Soapy Smith and the Better Business Bureau.

Of all the places to read about Soapy Smith...the Better Business Bureau? Our friends at the Days of 98 Show with Soapy Smith in Skagway, Alaska and on Facebook, alerted me to an article by Holly Doering of the BBB entitled, Top Scams of 1912: Nothing New in 100 Years. I thought Holly did a nice job on the story and wanted to share it with you. I hope you enjoy it.

Recently the BBB issued a press release containing the Top Ten Scams of the past year. As we celebrate the 100th anniversary of the BBB, let’s look back in time to early 20th Century scams.

Reading the comic novels of P.G. Wodehouse, first published in 1902, you encounter a recurring character named “Soapy.” He’s an American con man who tricks gullible British peers into dubious U.S. investments. Or, as Wikipedia puts it, “who is an expert in selling fake oil stocks to those even less mentally gifted than himself.”

I always wondered if this character were based on a real life scammer. Maybe: according to List Verse, Jefferson Randolph “Soapy” Smith was an Old West bunko man—and gangster—who operated out 0f Denver and Skagway, Alaska around the turn of the century.

SOP: Stacking up ordinary soap bars, Smith would draw a crowd, then pull out his wallet. Ostentatiously, he’d wrap paper money—sometimes $100 bills—around a few. He covered them with plain paper. Then he mixed up the cash-wrapped soap with the regular and sold to the crowd for a dollar a bar. Soon, Soapy’s plant in the crowd would buy one, tear it open, and wave around his “winnings.”

I hope the soap was fantastic, because in today’s money $1.00 is an approximate value of more than $25. The scam: Through masterful sleight-of-hand, the money-wrapped bars were hidden and replaced with cashless packages.

But it gets worse: Midway through the sale, Smith would announce that the $100 bill remained in the pile and would auction off the remaining soap bars to the highest bidders. Con artists today still lure the unsuspecting with promises that are too good to be true. Here are some additional flim-flams (scams) prevalent around 1912.

Landmarks For Sale
For most of his life, con man George Parker sold New York’s public landmarks to unwary tourists. (And he wasn’t the only one.) According to List Verse, Parker’s favorite object for sale was the Brooklyn Bridge, “which he sold twice a week for years. He convinced his marks that they could make a fortune by controlling access to the roadway. More than once police had to remove naive buyers from the bridge as they tried to erect toll barriers.” Grant’s Tomb, the Statue of Liberty, and Madison Square Gardens were also “sold” repeatedly by Parker. He was sentanced to life in Sing Sing in 1928.

While it would be hard for someone to pull off this particular scam today, tourists often become victims. Know before you go.

Fake Mediums
During the Spiritualist Movement of the 19th Century, many people, primarily women, managed to convince others that they could talk with ghosts through a system of rapping sounds. One trio, the Fox sisters, earned an international reputation as ghost-talkers, bilking the gullible out of their money for almost 40 years. According to www.cracked.com, the siblings defrauded their customers by cracking their toes.

Unfortunately there are a million ways for the unscrupulous to take advantage of the grieving. A more recent scam is for a con artist to contact a recent widow or widower with a fictitious debt owed by their spouse.

Money-Printing Boxes
Not interested in purchasing the Eiffel Tower? Not to worry. Count Victor Lustig would show you a money box instead. The contraption “printed” a $100 dollar bill, but alas, it took more than six hours to produce each one.

“If only I could make it work faster,” Lustig would lament. Thinking they were clever, the marks would purchase the box for a large sum, only to realize twelve hours later that, now, after producing two more $100s, the box was only good for blank paper. Bait-and-switch schemes of one variety or another continue to this day.

Three-Card Monte
Three-Card Monte has parted many a mark from his money. It’s basically a shell game using cards. The victim thinks he can find a specific face-down card; the dealer knows he can’t. The dealer may use confederates in the crowd to accomplish this, but sleight-of-hand is always employed. (A person’s first clue that this isn’t a good deal would be the schill “looking out” for the police. This is the equivalent of today’s “lottery winner” being told not to tell anyone—a big red flag.)

She’s Wealthy: But After You Meet Her, You’re Not
Online dating scheme? “Big Bertha” Heyman didn’t need a computer. She could con money out of men face-to-face by pretending to be a wealthy woman who was unable to access her fortune. According to Wikipedia, Big Bertha was one of the most successful women con artists in America. She stayed at the best hotels and employed both a maid and a manservant. Even after she was sent to prison, she still managed to trick men out of their money, including her own attorney!

The “Pump and Dump” Stock Scheme
This fraud was probably invented in the early 1900s by Joseph “Yellow Kid” Weil and is still with us today. How it works: The scammer buys stock in a small company with small profits or creates a non-existent shell company that has no profits. Using sales staff who follow a phone script and may not even know they’re perpetrating a scam, large numbers of people are convinced to buy.

When the flurry of buying activity inflates stock prices, the scammer sells all his stock. Since the company isn’t profitable, the stock quickly plummets.

It gets worse: When victims complain, the scammer assures them that it was just bad luck–they lost their money fairly, the stock exchange is risky, etc. Sometimes they even manage to separate victims from more money at this time. Victims of such a scheme should contact the U.S. Securities and Exchange Commission.

The Bottom Line
Outwardly, many things have changed since the beginnings of the BBB in 1912. But the tendency of some humans to prey on the greedy, the vulnerable, and the naive will never change. So please, investigate before you invest. Start with Trust by using your Better Business Bureau as a resource. It’s why we were created.
Source: BBB; Consumer News and Opinion Blog

* Thank you Holly!
Jeff Smith


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