This video was brought to you by Brilliant. Hi, welcome to another episode of Cold Fusion. By 2024, we've seen modern scams in the world of banking, building apps with fake customers, crypto, and more. But one scam in the 1800s surpasses them all. The fraud we're going to talk about is the most outlandish and ambitious ever attempted in the history of the world. Not only was it ridiculous, but the perpetrator got away with it. This man damned people by selling a fake country. The value of the fraud was only 5 billion in today's money, but this insane scheme convinced hundreds of people to move their lives to a country that never existed. It's a story like I've never told before, so let's get on that time machine back into the 1700s and start the story. You are watching Cold Fusion. [Music] Gregor McGregor was born in Scotland in 1786. His father was a sea captain for the East India Company. The family did

well, growing up, the young man got a taste of the good life early on, but this would influence him in the worst of ways. As a young boy, he became obsessed with all things class and status, and moreover, he was willing to lie, cheat, and scheme his way to the top. At the age of 16, around the time of the Napoleonic Wars, Gregor joined the British army. He married Maria Bowater, the daughter of a Royal Navy Admiral, and used her family's wealth to buy his way up the military ranks. For example, he paid £900, or £72,000 in today's money, to become the captain of his regiment, a promotion that would have otherwise taken many years, and he was on The Fast Track towards the rank of General, the highest distinction in the Army. McGregor briefly fought in Portugal and retired from the British service in 1810. After this, he would start spinning tales about being knighted for his military service and pretended to have connections to all sorts of nobles. Lying for recognition was far

less dangerous than fighting for it, but things would take a tragic turn when his wife died suddenly. McGregor was cut off from her family's wealth, and this hampered his bargaining power. Skills with his British Army days behind him, McGregor set his sights on Latin America. He sailed to Venezuela, which had just gained independence from Spain, and married once more into money, this time the cousin of the renowned revolutionary Simone Bolivar. But around this time in 1820, his military would come into question. A 418-page expose book was released, and it detailed McGregor's military mishaps. He was actually a bit of a coward and would often run from battle when he saw that his side was going to lose. This expose more or less eviscerated him as a leader, but this isn't the story of Gregor McGregor the military man; it's the story of Gregor McGregor, the most ambitious con man in history. After falling out with Bolivar and his mercenaries, McGregor's reputation was in the craters, as author Michael Rafter puts it, quote

that any person could be induced again to join him in his desperate projects would be to conceive a degree of Madness and Folly of which human nature, however Fallen, is incapable. Basically, he's saying because of this guy's reputation, anyone who would trust him is an absolute idiot. But anyway, facing a bruised ego and nowhere left to turn, McGregor would Retreat to present-day Honduras and Nicaragua, inhabited only by wandering tribes. And here, something interesting would happen. McGregor, forever the party animal, would befriend George Frederick Augustus, the King of the territory. For a bit of context, in those days, the British would sometimes give out empty titles such as king to declare a local area British to block Spanish claims. George Frederick Augustus was accepted as King by his tribe, so like Gregor, his title was flimsy, yet it didn't stop him from signing a title granting McGregor, the conman, 8 million Acres of tribal land in exchange for some rum and jewelry. This piece of paper became the basis for

history's biggest scam. McGregor, ever the master of tales, headed back to Britain. Here he was still remembered as a knight and a war veteran. It's a reminder that back then, information just didn't flow how it does today, and true to form, he had everyone wrapped around his finger. In his newest scheme, he claimed that he was the prince of Poyais, an 8 million-acre utopia on the South American coast, on what would be modern-day Nicaragua and Honduras. Remember, this was the early 1800s. Maps were still gaining their edges, so exact territorial boundaries were more guesswork. McGregor took advantage of this and showed up at number one Dowgate Hill with his handcrafted map of Poyais. He spun a story about how Poyais had never been claimed as a British colony, and its rugged mountains had protected it from Spanish conquerors. With the groundwork now established, McGregor got to work securing colonists. The story of Gregor McGregor is truly a window into the early dynamics of private colonialism and its role in expanding the British Empire.

1820s England, nothing got investors more excited than South America. With the collapse of the Spanish Empire, a whole new world of investment opportunities had just opened up. Newly independent nations like Colombia and Chile were free from Spanish rule. These new nations would issue bonds to investors to support their emerging governments. These bonds offered 6% yearly returns from state-run industries. At the time, there weren't many clear-cut rules about how to recognize these new territories, so the investment climate was a bit of a free-for-all. With dollar signs in their eyes, the English public bought in big, and investment frenzy with the fervor of theom bubble was the result. Many investors had no clue about South America, let alone the economies within it, but still, they rushed to buy these bonds, driving up their value and creating a bustling secondary market. Historians agree that McGregor was a natural and shameless salesman, but he was also in the right place at the right time. The massive amount of land that was given to him for a bottle of rum and some jewelry came in very handy.

seeing how hot South America was with investors. McGregor put his best foot forward at London social gatherings. He promoted himself as the leader of this new land, the Sovereign Nation of Puers. Making haste, McGregor forged his way into making this territory as real of a country as it could be. He designed a national flag and a coat of arms, and it featured two unicorns. He convinced British newspapers to detail the bond prices for Puers, a practice that was done for real countries. In the streets of Scotland and England, he and his representatives handed out pamphlets and even sung songs about Puers. It was a promised fertile land with modern European infrastructure and buildings. There was hard work but an ultra-friendly population, and even in the rivers of Puers, gold deposits were visible. It sounds ridiculous today, but at the time, there was no internet, and even the first phone would be half a century away. The general public had never heard of this place, but there was just no way to verify its existence but to trust the word of a decorated war hero and his

official documents for pz. To top it off, there was a book about poers, and it concluded that the new country quote would rapidly advance in prosperity and civilization end quote. But the thing is that book was also fake, written by none other than McGregor but with a fake pseudonym. So, hearing all of these factors, buying land in this region of opportunity was a no-brainer. Investors believed that they were financing an infrastructure and building boom in a developing country, but in reality, the money just went to McGregor and lined his pockets. As 1822, war on McGregor hyped up the price per acre bit by bit, and by October, he offered a 200,000 po Bond. It had a 6% return, similar to the other governments. However, unlike those countries, po didn't have a single tax system in place. So, how was it going to pay back the investors? Well, McGregor obviously had a solution for this. He assured investors that the funding would come from future inhabitants. Plus, because poas was so rich in natural

resources. There would be plenty of export tax revenue. This was the final stroke of genius or madness, depending on how you see it. And the people just couldn't resist. They threw money at him, and that was it. He had now convinced hundreds of eager settlers to make their way across the Atlantic Ocean. Some of them even converted their life savings to fake po Asian currency. Regardless, they set off on a 2-month journey to a prosperous land that they'd never heard of and never existed. The first 70 settlers left from England in late 1822. Another 180 set sail from Scotland in January of 1823, and they were all to arrive at the country's capital, St. Joseph. McGregor greeted the second group at the dock before they departed. He was there with a charming smile and even offered free travel for all women and children. The future P's residents just thought that he was the kindest, most brilliant man on Earth. Quote, We gave him a salute of six guns and three cheers, a passenger recalled from his memoir.

little did we anticipate the misfortunes which were afterwards to befall us as the ship pulled into the South American Coast. The view was absolutely beautiful; the passengers were excited, but after some time, they noticed something. They should be at St. Joseph Port, but where were the buildings? They were expecting a European-style capital city, complete with a government center and a theater, but there weren't any dwellings or buildings. The only signs of life were the scattered passengers from the first ship. They were huddled in makeshift bamboo huts. Of course, the land awaiting them was an absolute dump, unfit for farming and barely able to support any livestock. There was no property to be given out, no banks for withdrawing or depositing po Asian money. There was nothing. Surprise quickly turned into horror as the new inhabitants realized that they were stranded in an untamed foreign land. As the weeks went by, the settlers faced punishing heat and humidity. Without proper leadership, they fought over rations and one by one withered away from starvation, exhaustion, and malaria. Many would sadly die in

these conditions. So did McGregor lose any sleep over this disaster? Nope, not at all. While his colonies were falling apart and starving, McGregor was living the high life in London. He was throwing lavish banquets and parties and bragging to anyone who would [Music] listen. By September 1823, the truth about P had finally reached London, and the newspapers were printing warnings to their readers. The Royal Navy recalled five ships that were heading towards the doomed colony, and the surviving settlers who hadn't succumbed to the elements were rescued by a passerby ship and taken to bise. Amazingly, the surviving victims who were rescued refused to believe that McGregor was at fault. Instead, they blamed his colleagues for the disaster. The man was just that convincing. But also, as the saying goes, it's easier to be fooled than to accept you have been fooled. McGregor knew that the jig was up, and he fled to France. But within months, he started doing it again, reeling in a new bunch of investors and settlers. However, the French government

was suspicious. How was he handing out passport applications for a country that they'd never heard of? He was taken into custody and put in jail awaiting trial. But McGregor wouldn't take responsibility, and he shifted the blame onto his associates. He lawyered up big time for the trial, and somehow the judge ruled that he was innocent. Once released, he would keep trying to swindle even more people, even though the authorities were onto him. But it would be the bursting of the South American bond bubble which sparked the financial panic of 1825 that would cause his scheme to largely run out of steam. During the panic, investors started pulling out their money. They realized that the newly independent nations couldn't repay their debts. 52 English banks would fail. It was a disaster. But back to McGregor. Despite all the havoc he caused, he never faced real justice. He would flee to Venezuela, where he was given a generous pension for his military service. He lived out his final days as a prince of poer, which, by the way, to this very day remains an

undeveloped strip of land. This massive scandal is not only an example of how far scams can go without the rapid spread of information, but also about human nature and just how much one person can lie. But in a broader sense, it is interesting because from the next century onwards, a scam like this would never have been possible again. And that's not to mention today; even just a quick Google search would be more than a match for scammers like McGregor. So in that vein, we should be thankful that we can verify information ourselves today. So we have seen how information is vital for today's society. Well, fortunately, there's a fun and easy way to learn about that with brilliant.org. Brilliant is where you learn by doing with thousands of interactive lessons in maths, science, data analytics, programming, and AI. Brilliance course on search engines is particularly relevant in it. You can learn the core ideas behind search engine technology. Each lesson on brilliant allows you to play with concepts, a method proven to be six times more effective than watching lectures.

videos plus all content on Brilliant is crafted by teachers, researchers, and professionals from MIT, Caltech, Duke, Microsoft, Google, and more. Learn at your own pace to brush up on a project for work or just for your own self-development and curiosity. To try everything Brilliant has to offer for a full 30 days, visit brilliant.org/coldfusion. You'll also get 20% off an annual premium subscription. Anyway, that's about it from me. If you did like this episode, feel free to subscribe to Cold Fusion. There's plenty of interesting stuff on here. So my name is The Goo, and you have been watching Cold Fusion, and I'll catch you again soon for the next episode. Cheers, guys. Have a good one. [Music] [Music] Cold Fusion. It's new thinking.

How One Man Sold a Fake Country (and Got Away With it)

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