Telegraphs & Fake Countries- Blanc Bros/ Gregor MacGregot

This week we delve into two stories from the history books filed under "The Early 1800s Ridiculous Scams" . First up is the Blanc brothers who used the first telecommunications system to commit the first telecommunications fraud. Then we dive into the truly awful story of Gregor MacGregor who duped all of Europe into buying into a fake South American country.

Episode Transcript

(00:02):
Wall Street veteran Bernard Madoff has been arrested and
charged with running a $50 billion Ponzi scheme.
Congress wants to know what caused the Enron meltdown, and
while the collective rage currently is focused on low
comp. Tyco CEO Dennis Koslowski was
convicted of looting hundreds ofmillions of dollars.
This is one of the biggest fraudcases ever.

(00:23):
Their president's a crook. Well, I'm not a crook.
Find out more on this week's episode of White Collars Red
Hands. Committing a con today is a lot
harder than it used to be. With the advent of the Internet,
you can check up on the past of anyone in just a few seconds so

(00:43):
so no one takes what you say at face value.
That way, if I went around telling someone that I don't
know I was the monarch of a fakecountry in South America, I
would be dismissed as some combination of crazy and or
stupid relatively quickly. On top of that, as technology
advanced, humans discovered new ways to take advantage of it,

(01:05):
which then led to new ways of protecting it.
Today, emails and messages are encrypted to prevent prying eyes
from seeing what they shouldn't.Unless of course, you
accidentally add another contactonto the Signal group chat, you
know? But previously, stealing
messages was as easy as walking down the road and looking up.
Today we discuss two stories where, due to the time they took

(01:28):
place, the early 1800s, con men got away relatively Scott free
with schemes that would be almost impossible in the
technology era. So these are the stories of
Francois and Joseph Blanc, the brothers who likely committed
the first telecommunications fraud, and Gregor McGregor, the
man who sold a fake country throughout Europe.

(01:51):
Gregor McGregor. Gregor McGregor.
That could not be his real name.It is.
It's like Phillip Phillips, thatguy that won American Idol.
What is that your are you talking about like season 20 or
something? Yeah, I did not watch past, I
don't know, season 7. I don't know what season he won,
but yeah, there was a Phillip Phillips who won American Idol.

(02:13):
I grew up and I was no longer like a cat lady living in the
middle of some random state, so I stopped watching American Idol
relatively fast. That's not what I heard about
you. Do you see a cat amongst my
place? Oh my God, no, there's no cats
here. No cats.
I'm crazy, but not a crazy cat lady.

(02:34):
So with that, welcome back everybody.
I'm Kashan, the not crazy cat lady.
And I'm Nina. So originally the idea was that
I was going to tell this very light hearted, fun story about
the Blanc brothers. Turns out there was not really
enough to subsist an entire episode on it.
So instead I added another storyin Gregor McGregor and it turns

(02:55):
out that story is actually much longer, has huge substance.
Probably could have done a wholeepisode on it, but here we are.
Here we are, I'm. Giving you both.
It's very steeped in a lot of history, so I just didn't get it
as deep into it. So if you want to do that, you
know, there's resources. He had multiple biographies
written about him, Gregor McGregor, and he will understand
why when we get to it in the second part.

(03:16):
But to start off, we're startingoff with Francois and Joseph
Blanc, which in English is just Frank and Joe White sounds a lot
more fun in French. It does.
Francois and Joseph Blanc were, unsurprisingly from France, and
they were both working as bankers in Bordeaux in the

(03:37):
1830s. They made their living primarily
dealing with the government bonds, which they traditionally
share an inverse relationship with the stock market.
In general, if the stock market declines, the price of bonds go
up as people hedge their investments against stock market
volatility with the safety of government bonds.
So they're in, they influence, the prices are influenced by

(04:01):
each other. That's the thing you need to
know. The brothers obviously traded
these bonds on the Bordeaux Stock Exchange.
That's where they are, right? But the primary Stock Exchange
was located in Paris of 585 kilometers or 363.5 miles in
Freedom units away. What?

(04:22):
You never heard Freedom. Units.
Yes, I just forgot it was a thing.
Well. There you go.
Especially against the French, like how we used to call, you
know, French fries, freedom fries and sauerkraut, freedom
cabbage. Sauerkraut is German.
Yeah, but we called it freedom cabbage in during World War 2.
I didn't know that to. Reclaim it.
From We need to reclaim sauerkraut.

(04:44):
However, the Parisian stock market moved.
If the Parisian stock market went up, the Bordeaux market
would move with it. It would go up.
It would go down if the Parisianstock market went down.
That was the main market, but the news traveled a bit slower.
In the early 1800s. It would It would be days before
news of the Paris stock market movement made its way into

(05:09):
newspapers in Bordeaux, and thusto the mainstream.
So if the Blanc brothers could somehow get the information
faster than others, they would be able to make the option to
either buy or sell days before the market moved in Bordeaux.
Basically a form of insider trading and they could make

(05:31):
francs hand over fist. But how would they ever get
information faster than the fleet footed horse couriers that
carried that carried messages for the newspapers?
The Pony Express. That's what they had.
The only thing that could do that was a series of visual
telegraphs that were built for use only by the French

(05:53):
government. This looks like a fucked up
windmill. Funnily, you should say that
because during a this is just a this is just a side fun fact
that wasn't in here but during aFrench battle.
They actually repurposed a windmill as this this kind of
Telegraph to be able to send messages on the battlefield.

(06:16):
Wait, what did they do? They're a Telegraph.
Well, we're about to get into it.
Oh, I'm sorry. In the 1790's the French were
doing what they've become famousfor, revolting.
Do you hear the people saying? That was after this but.
Nevertheless, they were on theirway.
The French Revolution kicked offin 1789 and the government
acknowledged that they needed a way to quickly relay messages if

(06:39):
they had any hope of keeping most of their heads on their
bodies. At the time, like I mentioned,
the main method for communicating was through the
written word delivered by horse or coach messengers, but luckily
France had cloud chop. Chop actually joined the joined.
Cloud Chop actually coined the term Telegraph to describe his

(07:02):
design, which consisted of what are called semaphores.
The line was comprised of a series of towers anywhere from 5
to 32 kilometers or 3.1 to 19.9 miles away from each other.
On top of the tower was a post with three movable bars
attached, a long regulator, and two smaller indicators.

(07:23):
If the indicators were both up and the regulator was
horizontal, it looked kind of like a goal post for football.
And these could be moved into various formations by two levers
inside the tower. OK, wherever the message started
could move these beams into one of 92 shape configurations.
The next tower in line could seethe shape with a telescope and

(07:45):
then would mimic the shape on their semaphore to give the next
tower the signal. And so on and so forth down the
line until the message was transcribed at its destination
hundreds of kilometers away. OK, that's confusing.
What do you mean it's they make shape next tower C shape make
shape and go and go for multipletowers in.

(08:08):
There OK until they can decode it.
Yes, we're getting there. So counter to what most people's
first idea would be, or at leastwhat my first idea would be.
The shapes do not actually represent a like letter or
symbol like in Morse code. That's not how it works.
Instead, the symbols were sent in pairs.
Every two symbols could be transcoded into one of 8464

(08:33):
possible words or short expressions that you needed a
code book to decipher. So every two codes, basically
they were, each code was a number, and then from the
number, the first number would be the page of the code book it
was on, and the second number would be the phrase number on
that page. So then you'd write that down
and then the next two symbols you'd do the same thing, and so

(08:55):
on and so forth until you have the whole message.
In fact, many towers along the route didn't even have the code
book and often did not know whatmessage they were sending or
even how to read the messages. So they just copied the pre
whatever position the previous tower was making without any
knowledge of what it meant, making it not only the first

(09:17):
telecommunication system, but the first encrypted
telecommunication system. We've learned a lot about
telegraphs recently 'cause I didthe whole background on the
electrical Telegraph for the Siemens episode.
So you did. So you guys?
We love a Telegraph. We love a Telegraph over here on
White Collar's Red Hands. You.
Now know a lot about how the Telegraph was invented.

(09:39):
This was extremely fast though compared to what they were using
previously, and that its peak usage in France messages could
travel at the speed of 500 kilometers per hour.
Oh wow, that seems quick. It is quick.
France invested heavily in this technology and ended up building
5000 kilometers or just over 3000 miles of optical Telegraph

(10:01):
lines with a total of 556 stations that was used solely
for government purposes and mostoften for military
communication. It was used during the French
Revolution and also during the Napoleonic Wars primarily, but
the Blancs schemed to use it fortheir own nefarious purposes.

(10:23):
They paid somebody in Paris to monitor the stock market for
large swings up or down. When that happened, they would
send a package to a semaphore tower in Tours, about 204
kilometers away from Paris. The package would contain
clothing so as not to arouse suspicion from its delivery, and

(10:44):
based on either the type or color of the clothing item in
the box, it was never actually very clear.
The Telegraph operator, which had been bribed by the blocks,
knew which signal to send. The operator would then
purposely send an incorrect signal through the Telegraph
line. The first fake news.
That would tip off another Blancemployee in Bordeaux who was

(11:07):
paid to watch for these deliberate errors on the tower
as it passed the town. This was then relayed to the
Blancs and they could trade accordingly, raking in the dough
of whether they knew it was going to go up or down in a
couple days. So you might be wondering, why
didn't they just bribe a Telegraph operator in Paris?
They did have these towers in Paris, much closer than Tours,

(11:32):
and they could avoid this long trip with the original packages.
Well after sending the purposeful mistake, the towers
had a backspace signal basicallysaying like hey that last thing
I sent was a mistake, don't put it in the final message.
Between Paris and Tours there was a relay station with a code
book where the messages would becleaned up.

(11:52):
So if they sent it straight fromParis with the mistake, the
mistake would get scratched and not sent any further.
Makes. Yeah, that makes sense.
But between Tours and Bordeaux, that was the longest stretch
without one of these. Got you.
So even though not ideal, the scheme went on for two years

(12:15):
until 1836, when the Telegraph operator who had been bribed was
on his deathbed and then either confessed to or tried to get a
family member to carry on his position in the scam.
It was kind of unclear of which one it was, but either way, the
family member instead went to the police like a narc and the

(12:38):
blocks were arrested. There was no law against what
they did however, at least not yet.
This was new, relatively new technology.
It was 40 years old at this point, but people, no one really
thought to do anything like this.
Before. So everyone involved was only
charged with either bribery or accepting bribes, the two
charges that they could actuallyslap them with.

(12:58):
And the Blancs only had to pay for the cost of the trial, which
was much less than whatever theymade, perpetrating the scheme
for sure. Afterwards the French government
put it into law that the public could not use the semaphore
system for any private messages,and even building your own
private system became illegal. The blocs went on to live the

(13:19):
rest of their lives just fine, and the chat Telegraph was used
until 1855 when France finally modernized their system with
electrical telegraphs. You know, this kind of reminds
me when we did the Robert Kennedy episode when he like
cheated the stock market. And then he was like, oh, yeah,

(13:40):
now we're going to make a law about how you can't cheat the
stock market because I did it. It just reminds me of that.
They're like, oh, we didn't havea law, but that's hooked up, so
let's make a law. Well.
I do feel like a lot of times the first, the first laws come
around because they were like, ah, we didn't think of.
That yeah, yeah, true. It's like a.
It's like a rules and sports. A lot of rules and sports come

(14:02):
along 'cause someone, someone does something and they're like,
I don't like that. They're like, I wish you
wouldn't. Let's make that not allowed
anymore. What if you didn't do that?
It's like you can't wear a shoe that only has half a foot, even
if you only have half a foot, which was a real rule that was
put into place because a guy with half a foot became the best
kicker in the NFL. That's so interesting.

(14:24):
'Cause he had a flat front on his shoe that he could freaking
kick those things hard forever and they were like, OK, even if
you only have half a foot, you have to wear a normal shoe.
That's that's interesting. Yeah, it also kind of sucks.
Like that guy was born with halfa foot.
Just let him be better. He was born with half a foot.
Yeah, he only had half a foot. That's crazy.

(14:44):
Just let him be better then let him wear the special shoe and
let him. Have a hard life, let him have
half a foot kick. A ball farther than everyone
else? NFL, you jerks.
How about that? With that side quest out of the
way there. Yeah.
So that was the that was originally what today's episode
was going to be. We're at the 17 minute mark of

(15:06):
recording. So I could obviously tell that's
not everything we could do today.
So you know that your life isn'tgoing to be a good one when your
name sounds like a Doctor Seuss character.
So Gregor McGregor was off to a rough start.
Poured on Christmas Eve in 17. It's not even that funny, bro.

(15:29):
It just sounds like a made-up. It just all sounds made-up.
Gregor McGregor, born on Christmas Eve.
He was He was born on Christmas Eve in 1786 to a Jacobite family
that had recently been removed from the list of outlaws.
Oh. So therefore his family wasn't.
Can you remind me what a Jacobite is?
That, Oh my God, that is. It's actually so deep.

(15:51):
They were an offshoot that they thought a different lineage of
the British throne should go to this other guy who like vacated
and and then they were like, he should be brought back because
he was exiled and they gave it to someone else, a bunch of like
Game of Thrones type type bullshit.
So that but recently they were like, all right, fine.

(16:14):
The Jacobite uprising basically hasn't been a thing for a little
bit. So your family can come back and
not be outlaws anymore. Cool.
So his family wasn't necessarilypoor, but they weren't like
super rich either. McGregor jumped at the
opportunity then to join the British Army.
At the earliest you could 16 in 18 O3 because his family was

(16:37):
moderately well up. Like I said, they took advantage
of a what I think is very stupidpractice available in the
British military until 1871 whenthey bought him the rank of
Ensign in his regiment for £450.Like I feel like you could have
just worked your way there. You could buy rank at that time
if you had enough money. You could just be like, I don't

(16:57):
know, make me make me a captain.That's crazy.
So he joined just in time, too, because that was the year that
the Napoleonic Wars broke out in18 O3, and there was plenty for
a British Army man to do. And one year later, he was
promoted to Lieutenant, this time without having to pay for
it. You know, probably felt a little

(17:18):
better, or maybe not. He's crazy.
That year he met his first wife,Maria Bowater, who was the
daughter of a Navy Admiral and whose family was fantastically
wealthy, although her family hated Gregor.
The two were married and he immediately put his wife's money
to work, now purchasing the rankof captain for £900.

(17:41):
It's like Scientology when you pay to go up the the ladder.
Basically, except for it's like the the the military that's
worse. Literally the military.
For sure bad bad choice. And he's also young.
So this this like 20 year old has now like outranked a bunch
of like poor. People who are much older than
him. Terrifying.
Actually not good. In eighteen O 9 it is said that

(18:03):
he had such a falling out with asuperior that he requested a
discharge, which he was granted and they even gave him a refund
for the ranks he purchased. Well, they.
Gave him the full full amount ofmoney back 1350.
Good for him. It's like, OK, well I guess
that's a good deal. He then quickly joined the
Portuguese Army where he had been stationed with the British
to serve during the Peninsula War to serve as a major.

(18:29):
This was not so perfect timing though, as his British Army
regiment that he was part of the57th Regiment of Foot.
Such a stupid name for the things in your military Britain.
OK, come on. They became famous the year
after he was discharged for somebattle heroics that they were
part of and coined the phrase diehards.

(18:49):
Oh, first time ever that was used and that would actually
serve as their nickname. Of course many times McGregor
would mention he was part of this regiment though and very
selectively forgot to mention that he was not there for the
heroics that earned them the nickname to begin with.
He was discharged a whole year before they ever it was like

(19:11):
their leader said, like they they led into battle and he was
like he was all injured and stuff and he was like die hard
men die hard. That was his thing.
So they became known as the Diehards and then Bruce Willis.
Became diehard. Famously told their story with a
little bit of A twist years later.
I never saw that movie. It's nothing like that.

(19:31):
So at the age of 23, in 1811, McGregor returns to Britain and
started using a bunch of fake titles.
Firstly, he used the title of Colonel, which he never reached.
At the time, he also said that he was knighted into a
Portuguese order of the Knights Templar.
Oh God, the Knights Templar. So he would go by Sir Gregor

(19:51):
MacGregor, and he also claimed that he had royal lineage,
claiming to be a a baronet, which if you're wondering is the
rank below Baron in the noble hierarchy.
So his full title he went by. Was Sir Gregor MacGregor, Bart,
which is for some reason the title for when you're a baronet.

(20:15):
Interesting a Bart. A Bart?
I don't know, all of this was bullshit, but Gregor saw how
easy it was to get people to believe lies.
As long as you spewed them confidently enough, no one
really ever was like, you don't seem like a knight.
They were like, dah, sure he was.
Also, he was also known for being like he.

(20:36):
He'd had like a sophisticated like presence.
So people would tech would like believe a lot of this stuff just
'cause he said it most of the time.
And this lesson of just being confident in your lives was
integral to the rest of his life's work.
Later that year, his wife died and the Bow Waters wanted
nothing more to do with Gregory.They were like, get the hell out

(20:58):
of here, man. We've hated you this whole time.
So without his main source of income, his wife, he returned to
the only true experience he everhad in military work.
However, he had really unceremoniously left the British
armies, so he couldn't really gocrawling back there.
So he instead looked to the far off lands of South America,

(21:21):
where countries had declared independence from Spain
recently. And we're mounting revolutions
all across the coast, all acrossCentral America, and they were
looking for military. Leaders.
Oh, so he was like, let me go kind of colonize in a way.
Opposite, he was fighting against the colonizers.
Yeah, but OK, I guess. And I think in no way you, I

(21:46):
think objectively that's true. I just think it's weird.
Well, England doesn't like Spainthat much either.
Also he, he, don't get me wrong,he's not a good guy.
He played the field a lot. He later would try to get on
Spain's side and be like, hey, you need someone to like fight
for you. And they just fucking ignored
him. Go ahead.
So it's not like he did it out of any moral sense.

(22:13):
I think they just needed people.And he said, all right.
Yeah. Sure, and that is how Gregor
McGregor ended up touching down in Venezuela in 1812.
He stopped lying about being a noble, but he kept his night lie
up. So he kept going by Sir Gregor
McGregor for the rest of his life pretty much.
As well as the lie about being part of the diehards, which got

(22:35):
him a Colonel position. Finally, he actually got the
position he was lying about, commanding A cavalry battalion
in Venezuela. That same year, he met and
married his second wife, following his tradition of
marrying for power. His new bride was Josefa Antonio
Andrea, artiste Guieta Y Lovera,who was from a wealthy family

(22:57):
and related to the leader of theRevolution Party leader Simon
Bolivar. Wow.
This relationship saw Gregor catapulted up to Brigadier
General in only a few months. What is a Brigadier General?
Basically just a general OK. Yeah.
I don't do I know the difference?

(23:17):
No, but he if he wasn't a general now, he became just a
general later on. So I think he's just a general.
Now, OK, fair enough. In general, he's a.
In general, he's a general. Yeah, and he did this only a few
months. But fighting for the next few
years in the region was tumultuous.
The First Republic of Venezuela rose and then fell back to the

(23:41):
royalists. The Second Republic of Venezuela
rose and fell back to the royalists.
But McGregor kept on leading troops for Bolivar's attacks.
In 1816, he coordinated a mass uprising along the Venezuelan
coast. Or at least that was the plan,
and McGregor was to lead troops in the town of Akumar.

(24:05):
But the plan failed to take off.After fighting started, no one
joined their cause and Bolivar retreated with the ships,
leaving McGregor alone on the shore with no way of escape.
And. And 300 kilometers away from
friendly territory. So this caused McGregor to do
something for the first and onlytime in his life.

(24:27):
Be courageous. McGregor LED a successful
campaign 300 kilometers through enemy territory with little
provisions to get back to friendly territory.
And supposedly he did a bunch ofvery tactful, very smart
military maneuvers as he was going through, like deception

(24:48):
and flanking people. I mean, he had been around it
for a long time, so it doesn't surprise me that he knew how to
do it. Yeah, but it's just.
He just never had to do it. But what we're about to get
into, he was very inept from here on out.
So. I feel I don't know this for
sure but I feel like he just gotreally lucky.
He may have. During this whole thing, but

(25:09):
nevertheless he had to be welcomed home awkwardly by
Bolivar, who left him to die, who then awarded him high honors
and heaped praise on him. And actually in a letter he said
this of Gregor McGregor. The retreat which you had the

(25:30):
honor to conduct is, in my opinion, superior to the
conquest of an empire. Please accept my congratulations
for the prodigious services you have rendered my country.
McGregor. McGregor.
He still wanted more. He didn't want to just be a
general, he wanted to be a sovereign, which is why he

(25:52):
travelled next to Pittsburgh. Oh, the best city in the world.
To recruit mercenaries to capture one of the ports in
Florida, which at the time were Spanish colonies.
And with his new found fame he found it easy to get several
hundred men as well as financialbackers to mount the attack.
So Boo McGregor mounted an attack on Amelia Island off

(26:14):
Northeast Florida in 1817. The Spanish see the ship with
like 80 guys aboard, and they assumed that this must be the
beginning of a large scale annexation from the Americas.
America was very vocal about wanting Florida at some point.
So they were like, oh, here it. Is.
America's attacking us and they just decided to surrender with

(26:36):
it without a shot being fired because they're like, Nah, we're
good. We don't want to do this.
So McGregor he he would, and he raised a flag that bore a green
cross on a white background, which he called the Green Cross
of Florida, and tried to rally support in the area for an
uprising against the Spanish. He had other men still back in
America, but the American troopsstopped them from coming.

(26:59):
Interesting. And we don't know exactly what
happened, but supposedly there are thoughts that he was like
double crossed by America, that America said they would give
their support because they wanted Florida at some point.
But then when he actually started taking it, they were
kind of like and backed off because he did quote later that

(27:20):
his friends had betrayed him, but he was kind of like vague
about who those were. Who the friends were?
Yeah, so he, he's trying to rally support for an uprising
against the Spanish. And this didn't work.
McGregor forbade looting, which made him very unfavorable
amongst his men and followers 'cause now they weren't getting
anything out of it. And then he ran out of money and

(27:42):
started paying them in Amelia dollars, which were not real.
They were made-up by him and were worth nothing.
So after a few months the Spanish amassed forces on the
Floridian mainland and McGregor gave over command to just like
some other guy that was with himand just left 300 people behind
on the island and just left on aboat.

(28:05):
And then they fought against theSpanish for like 3 months before
finally surrendering. McGregor then went on to do this
exact same thing two more times,where he amassed troops,
successfully took over a Forger city, ran it like shit, and then
abandoned them completely to die.

(28:25):
What is up with that? He's like, I'm going to do what
was done to me. I'm going to screw you the way I
was screwed. I really feel like he was like,
I don't know, I got out of it. And.
But they were. They were never fine.
They were never fine. First, was it Portobello, not a
mushroom? I was like, I've heard of that.
But a port? A province in Panama?

(28:47):
This time, McGregor did not evenfight with his men.
He waited offshore on a boat until the victory flag.
Was raised the boat. He said somebody was like, yeah,
go get it. They raised the victory flag.
He was like, oh sweet, we won, and then he came.
Then he came on land. He then delegated all of his
leadership duties to others, didnothing basically, and got drunk

(29:07):
the whole time. So this led to a lack of patrols
around the city, which allowed the Spanish to just like, March
directly back into it. While MacGregor was sleeping, he
was awoken by the sound of rifleshots, and instead of running
into battle, he threw his bed out the window, jumped onto it
on the beach, hopped on a log and tried to swim out to a.

(29:31):
Ship. What the hell?
That were docked off that not docked they were that were
offshore, which is just so he immediately ran.
I would love to watch this movie.
I'm not gonna lie, it's pretty funny.
He's. Just like oh shit, runs away.
Finally he did get picked up by a boat of his and his Colonel

(29:51):
who was still fighting in Portobello sent him a message
and was like hey man, we're still fighting.
Like turn around with your shipsand fire on the city.
Like like to break the siege. And McGregor said, huh, Let's
get out of here. He's like, we could do that or
we could just leave. He Irish goodbye.

(30:13):
And then they left. How typical of a of a McGregor
to Irish goodbye. He was Scottish.
So I. Think he'd take offense to that,
but that's fine. He abandoned 200 people in that
city. Oh my God.
Most of whom were imprisoned andthen executed after their
eventual surrender. So.

(30:34):
Yeah, not good. No, not good.
They were not OK. He then he then did like he ran
it back. He did the exact same thing in
1819 in Rio de la Hacha in New Granada.
This time, McGregor didn't even leave his ship after the vigory
flag was raised because he thought it was a trick.
He's like, you'll never get me again with that.

(30:54):
So he had to wait for like a couple of weeks until finally
they were like they sent someonelike the one of his dudes rode
out on a boat and was like dude come like.
Are you coming or not? Like get off the boat man.
We won. And finally he did.
He joined them. But when he joined them, I guess
like all of the all of the men were like spinning.

(31:17):
They were all pissed off at. Them.
No one liked this guy, and then he claimed himself to be His
Majesty the Inca of New Granada,seemingly trying to grab rule of
this whole place for himself, like as a king, which is just
crazy easy. But the Spanish again showed up
and McGregor fled, leaving hundreds of men to be killed.

(31:38):
He took like 27 people, grabbed a boat, dipped, and yeah, pretty
much like 300 more people died. This was the last straw for
Bully Bar. Very understandably so.
Who accused McGregor of treason and said that if he ever came
back to South America he would be hanged immediately and said
that should any Venezuelan see him, they should kill him on

(32:01):
sight. So they had A and this isn't
cousin in law, so, you know, badblood.
Because of this, McGregor instead landed on the Mosquito
Coast off the Gulf of Honduras. Sounds like a nice place.
In 1820, yeah. I don't actually know why it was
called the Mosquito Coast because the Mosquito King like

(32:22):
the mosquito people that live there is spelt differently, but
they smell mosquito coast like the like the.
Insects. But then the mosquito people is
spelled differently. Interesting.
Some translation thing there, but he landed there in 1820
where he traded rum and jewelry somehow, which he had a large
amount of for a large swath of land from the Mosquito People's

(32:44):
King 8,000,000 acres which is larger than the country of
Wales. Wait, where is?
Oh, it's in Honduras. Modern day Honduras off the
coast of modern day Honduras. Technically part of modern day
Nicaragua. Got you.
Yeah. So largely this, these 8,000,000
acres though were made of swampland and the area was known

(33:05):
for being like pretty nice to look at, but pretty bad to like
live or like cultivate or colonize or kind of do anything
with. McGregor named the land Poyais
after the native Poyer people. Then he sailed back to London
where he started claiming that he was quote UN quote, the

(33:25):
Cazique of the new country of Poyais.
And Cazique is like a Spanish term for Chieftain.
But he basically claimed it thatit meant like he was the Prince
of this new found country, that he was the leader.
Which, here's the thing. That might sound crazy, but new

(33:47):
countries were kind of popping up all the time in Central
America right now. I was going to say that was kind
of like the MO of the time, right?
Like everybody was taking over everybody, everybody was
starting a new place. So it's not like out of the
complete realm of reason for himto do that.
Yeah, so like this does happen. It was a large piece of land so
that really want to be out of the ordinary.

(34:08):
And McGregor was a war hero and and a decorated general for
another country. So it it, you know, it is kind
of believable that he would somehow become the ruler of a
country as well, even though he's an idiot.
And some really influential people started to believe him.
McGregor was wined and dined by many affluent people in London,

(34:32):
including the Lord Mayor, when he had returned, claiming to be
there to represent his new country of Poyais at the new
King's coronation and to seek investment and settlers to move
to the country. So then MacGregor just committed
to the bid. He drafted a constitution for

(34:52):
Poyais. He laid out how the Parliament
was constructed, not how it would be, how it.
Was he's like, Oh no, this is. A stand.
It's a It's a thing for sure. He designed uniforms for its
army, including different designs for the different ranks.
He had it all laid out. He developed a coat of arms
which has two unicorns on it. That's hot.
It's the green. It's the green on white cross

(35:14):
with two, like on a shield with two unicorns.
And then he developed a flag, which you can tell already, he
very lazily just reused the green cross lag from his Florida
days, which is also just a greencross on white.
So it's like, you know, whatever, it's not really
inventive. Eventually he got some pretty
rich people to believe him. And many people at the time were

(35:36):
speculatively investing in Central America in London.
It was like a big bubble that was going on right now is that
they really thought the next bigthing was investing in Central
America, a bubble that would lead to a really bad economic
time there in 1825 known as the Panic of 1825 S They kind of

(35:57):
were like, yeah, we'll invest inPoyais.
That sounds great. We're into that right now.
McGregor used this new found cache to set up boy Asian
offices throughout London, further lending to an air of
credibility to his fake country.And he used these offices to
sell land certificates at the price of two shillings and
sixpence per acre. But there was such high demand

(36:19):
that he eventually raised the price to 4 shillings and they
were still flying off the shelf.So here's my question.
When he and Kate went to that place and then like bought it,
did he know it was swampland? Did he know it was
uninhabitable? He was there, yeah.
He saw it and then bought it, Yeah.
He was there. He was on the Mosquito Coast.
He saw it and he said he was only there for like less than a

(36:40):
year. He's like, I'm gonna go back to
London. And I'm gonna sell it and.
Then he started doing all this. Yeah.
All right, so yeah, he was pretty painfully aware that none
of this was real. The fervor to buy land in Poyais
was partially fueled by a bound a leather bound 355 page
guidebook that McGregor commissioned entitled Sketch of

(37:00):
the Mosquito Shore, including the territory of Poyais that was
just filled with a bunch of liesprobably written by McGregor
himself or commissioned by someone to lie a bunch about.
This book claimed that there wasplenty of farmable lands that
yielded great harvest, that fishwere plentiful, you could feed

(37:22):
your family for a week with onlyfishing for a day, that there
was already a thriving capital city called Saint Joseph with a
population of 10s of thousands of people.
And the book even clicked that the rivers contained literal
globules of pure gold, like likethe rivers where it's filled
with Goldschlager, you know, instead of just poopy, poopy

(37:45):
swamp water, which is what was really there.
People just couldn't believe that the high cost of printing
this book and the cost of opening all of these offices
could be for a lie. I mean fair.
He lied so big that it was very hard to not believe it.
Like why would anyone do this? This can't not be true.
McGregor even got the banks in on it when Sir John Perrin, Shaw

(38:09):
Barber and company I know a a London.
A lot of this sounds made-up. I'm not gonna lie to you.
It's British A London bank underwrote a £200,000 loan that
was used to issue bonds for purchase.
These bonds only required a 15% down payment, with two more
subsequent payments due the nextcouple of months, and they

(38:31):
provided a 6% interest payment to whoever bought them.
And McGregor sold a lot of them.And people were hyped to get in
on the Poyaisian action. In fact, the first boat of
settlers cast off from London in1822.
No, they moved there. With 5000 Bank of Poyais dollars

(38:52):
that McGregor had printed, whichonce again are just completely
made. Up they are fake money.
And he's like, oh don't worry when you get there, like the
locals will gladly trade these for gold.
They didn't, by the way. The spoiler alert, they made a
trip across the ocean with 70 people aboard.
And of course when they got there, there was no Poyais.

(39:14):
It's just a random ass swamp in the middle of Central America.
This is a worse fire festival. Yeah, 'cause they, they were
going to live there. You know what this actually
reminds me of, and this is a segue, I'm sorry, but if you
know anything about people's temple, they moved to Guyana all
together and they thought that stuff was going to be set up for
them. But when they get.

(39:35):
There. Yeah, it was just an unsettled
jungle that they then had to like build houses and stuff on
all by themselves that was like this they got there.
Except for these people didn't had.
They were not set up to do anything like that.
They basically just waited on the coastline when they were
there without any shelter with not a real good way to get.

(39:57):
Food, and it took them a long time to get there.
Oh yeah, like like months. Oh.
My gosh. And they actually still refused
to believe that the country was not real.
They were just like, well, we wemust just not be able to find
it. So they sent out like multiple
search parties to go find like native people to lead them to

(40:18):
Saint Joseph, you know, this bigcity.
And the the natives were actually like, oh, yeah, I think
we know where that is. And they took him to this place
that was just like ruins of likea previous settlement that was
there. And they?
Were like so quickly summer cameabout and the settlers were then
beset with mosquitoes on the Mosquito Coast.

(40:38):
That brought with them diseases such as malaria, yellow fever,
and those who didn't die at least became incredibly sick.
They were not doing well. They were.
They were exposed and now getting sick left and right.
Finally, by a stroke of luck, British Honduran official
Marshall Bennett, a grand magistrate, actually happened to

(40:59):
pass by and see the settlers after 10 of them had already
died. That was a huge percentage
because there was only 70 that went over. 1/7 And he informed
them that Poyais did not exist and he had never even heard of
this Gregor McGregor guy before in his life.
So Bennett actually picked up the Mosquito King, who he was
going to have a meeting with anyway, and he brought him back

(41:22):
to the settlers. And he said, oh, yeah, I gave
that land grant to McGregor, butI never told him that he could
sell any of it or that he could,like, get debt against it.
Like, that was not part of any of the deal.
And he revoked it immediately. He said, OK, he doesn't own this
anymore and the settlers would have to leave.

(41:47):
But like I said, they were incredibly sick and many of them
never made it home. A very small portion of them
ever did. And on top of that, the Navy in
the area actually had to intercept and return to London
multiple ships that were carrying more settlers that had
been sent by McGregor, largely from Scotland, his homeland,

(42:08):
over to, to colonize. McGregor, back in London,
claimed that he was the one who was actually the victim of
fraud, that merchants in CentralAmerica were trying to keep him
from developing his new found country because they feared the
competition. That's it.
And that his like the people he had sent over had like embezzled

(42:30):
the money or whatever and then it but we know that everything
he said about. Was a lie.
So in retrospect, really don't believe him.
That being said, he still fled to Paris because people were
kind of upset. After some of the settlers got
back. There was like a couple of
people that were like, my kids died.

(42:51):
And. And there was a lot of bad press
that came out about Gregor McGregor.
So people were upset. So he fled to Paris, actually
before that first boat even madeits way back.
And in France, he negotiated with a company to allow them to
sell land grants to Poyais. He kept it going and he even
drafted a new constitution, but the French government got super
SUS after so many people were requesting passports to a

(43:14):
country that literally no one had ever heard of and they began
investigating McGregor who disappeared into hiding in the
French countryside. He was arrested but was actually
eventually acquitted after he drafted A5000 word statement of
once again just just lies painting him as a war hero blah

(43:35):
blah blah blah blah whatever whatever.
So he got acquitted and he got away and actually returns to
London around 1826. So a few years later, because
the original anger from the settlers returning actually died
down and people still didn't believe that McGregor could be
lying. They thought, boy, this was
real. And he even got another bank to

(43:58):
underwrite a loan to sell bonds.Yeah, this time for £800,000.
So 4 times. But this time they didn't sell.
Not because people finally caught on to the fraud though,
but because the South American bubble had burst and people were
just no longer as interested in investing in any business deals

(44:21):
in South America. McGregor continued to try and
sell land grants in this fictional country until the last
time that that it was recorded that he tried was in 1837, but
found less and less interest every time.
His second wife died in 1838 andnow with nothing, he decided to
return to Venezuela and despite the fact that Bolivar years ago

(44:45):
said that he should be killed ifhe ever returned.
By this time, Bolivar had been dead for seven years, and the
defense minister, Rafael Erdanetta, had actually served
under MacGregor during his one redeeming moment, that 300
kilometer March back to friendlyterritory.
So McGregor was actually given favor by the Venezuelan
government, remember, rememberedfor his good past.

(45:08):
While no one talked about AmeliaIsland, Rio de la de la Hacha or
Portobello, they reinstated his position as general in the
military, provided him with 25 years of back pay and also a
very sizable pension. Yeah, they just welcomed him
back with open arms. So McGregor unfortunately never

(45:31):
paid for his crimes, which led to hundreds of deaths, I want to
remind you, and instead lived incomfort until his death in 1845,
after which he was buried with full honors and the president of
Venezuela even attended his funeral.
The land that was Poyais proved to be bad or proved to be a bad

(45:53):
place to colonize and still remains undeveloped to this day
in Nicaragua. I am shook.
I cannot believe that that is insanity.
Yeah, it's not a good ending. He just got away with
everything. Oh my God.
Yeah, for some reason everyone very selectively remembered his
good moments and did not remember any of the really bad

(46:15):
parts. And he must have just been like
a, a, a charismatic bro man. Yeah.
To to get away with this for so I don't.
Know that's crazy died with these are like oh here's back
pay and pension. Oh yeah, he was fine.
He had more than enough money. He he never wanted for more.
That's so annoying. So those are the stories of

(46:40):
likely the first telecommunications fraud, and
also a very early example of securities fraud.
Although the story of the Blanc brothers is a little slightly
lighthearted. The story of Gregor McGregor's
by his stupid name spelled the death of hundreds of people just
because of his incompetence and senseless need for power.

(47:00):
I personally am happy to live inan era where if someone tried to
sell me a land grant for an incredible price, I could simply
fire up the Google machine and determine that they were full of
shits. Although there are some boomers
out there that would probably still chomp the bit for the
opportunity. For sure.
I'm glad we're no longer in the 1800s for a variety of reasons.

(47:23):
A lot of reasons. Two more now though, so and with
that, thank you guys for listening.
I, I usually really loved digging the little fingies into
these historic episodes. So I hope you had fun listening
because I know I had fun learning about it.
And if you did like it, you can go ahead and show us some love.

(47:44):
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(48:05):
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(48:27):
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(49:09):
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(49:29):
there which someone recently did.
So thank you for that too. I got the word of mouth in
already. So I I kind of did that in an
interesting in an interesting order.
You got it. Yeah, I riffed.
I riffed and I got it. I'm feeling OK, feeling riffy
today. So thank you guys so much for
listening. And we will see you next week on

(49:50):
another episode of White Collar's.
Red hands.