Most entrepreneurs are successful in part because their innovations help make the world a better place. However, throughout history a few individuals concocted some amazing criminal enterprises with the same entrepreneurial skill set.
Leaving aside the obvious ones — drug barons, gambling moguls, the mob — here are a few ingenious and entertaining examples of when entrepreneurs go bad.
A Scheme by Any Other Name
First, let’s talk about the Ponzi scheme, when a fraudulent investment opportunity is offered to buyers whose money is then used to pay off the previous round of buyers without ever actually investing in anything. The originator of this back in the 1920s was one Charles Ponzi.
Ponzi got started when he discovered a legitimate way to buy and sell stamps at a substantial profit. However, the scheme only worked on a small scale and Ponzi wanted more. So, he created the structure that bears his name to this day, starting with an initial group of investors that he paid off with funds procured from the second round, while skimming off some of the revenues to make money himself. No legitimate investments were ever made, and like every other scheme of its kind, eventually it collapsed, and Ponzi ended up in jail. But on the way, he made a name for himself.
The Many Mona Lisas
Fraud is rampant in the art world, but no one ever succeeded at the level of Eduardo de Valfierno. The most famous painting in the world is the Mona Lisa, and every unscrupulous art collector in the world would pay a fortune for it. However, every art collector in the world also knows that the painting is displayed in the Louvre.
Around the turn of the last century, when museum security was less sophisticated, Valfierno came up with a brilliant plan. He had a skilled art forger produce multiple fakes of the painting, then told several buyers around the world that he was going to steal the Mona Lisa and got them to commit to buying it. Valfierno even thought far enough ahead to get the fakes into each buyer’s country before the theft, avoiding going through customs with them afterward, when every inspector in the world would be on the lookout.
Valfierno hired someone to steal the painting, which was accomplished remarkably easily, and had the thief keep it concealed. He then sold the forgeries to his customers, making untold millions of dollars. He was never caught — though ironically, the thief eventually nabbed in the process of trying to sell the original.
Brooklyn Bridges for Everyone
We’ve all heard the joke about selling some sucker the Brooklyn Bridge, but for any number of gullible visitors to New York in the early 1900s, the joke was on them. One George Parker convinced tourists that the bridge was for sale, and they could recoup their investment by charging a toll to cross it. It sounds comical today, but neither NYPD nor the unwitting buyers thought it funny when the police had to run them off the bridge while they were trying to set up their toll booths.
A Little Closer to Home
Perhaps the most famous local criminal entrepreneur was the pirate Jean Lafitte. Though probably born in France, Lafitte and his brother Pierre got their start smuggling products from around the Caribbean into New Orleans, where they built a warehouse and established a distribution network. With the authorities closing in, they built a new port on an island in Barataria Bay and added piracy to their portfolio.
With our colorful history here in Louisiana, it may be surprising that no major criminal masterminds have emerged from the Bayou State. But if anyone is interested in buying the Huey Long Bridge, give me a call.
Keith Twitchell spent 16 years running his own business before becoming president of the Committee for a Better New Orleans. He has observed, supported and participated in entrepreneurial ventures at the street, neighborhood, nonprofit, micro- and macro-business levels.
