Empire of Deception
CBC Books | CBC | Posted: March 6, 2017 6:12 PM | Last Updated: March 9, 2017
Dean Jobb
It was a time of unregulated madness and nowhere was it madder than in Chicago during the Roaring Twenties. Speakeasies thrived, gang war shootings announced Al Capone's rise to underworld domination, Chicago's corrupt political leaders fraternized with gangsters and the frenzy of stock market gambling was rampant. Enter a slick, smooth-talking, charismatic lawyer named Leo Koretz, who enticed hundreds of people (who should have known better) to invest as much as $30 million — upwards of $400 million today — in phantom timberland and nonexistent oil wells in Panama. When Leo's scheme finally collapsed in 1923, he vanished, and the Chicago state's attorney, a man whose lust for power equalled Leo's own lust for money, began an international manhunt that lasted almost a year. When finally apprehended, Leo was living a life of luxury in Nova Scotia under the assumed identity of a book dealer and literary critic. His mysterious death in a Chicago prison topped anything in his almost-too-bizarre-to-believe life.
Empire of Deception is not only an incredibly rich and detailed account of a man and an era; it's a fascinating look at the methods of swindlers throughout history. Leo Koretz was the Bernie Madoff of his day, and Dean Jobb shows us that the dream of easy wealth is a timeless commodity. (From HarperCollins)
From the book
There was a rush to buy Bayano shares. "They began to besiege me with money for certificates," Leo said. "They thrust it on me... and refused to take it back." One man reputedly paid $30,000 for a single certificate.
Leo leaked more details to drive up prices and to lure in more buyers. He told Samuel Richman about the discovery and then, in the weeks that followed, mentioned more strikes and more crude. Soon he was assuring Richman he had forty wells in production, each spewing at least ten thousand barrels a day. He told his investment partner Henry Klein that Bayano was earning several million dollars a month. Telegrams arrived at social functions, informing Leo — and everyone around him — of new wells. Bayano's vast reserves, he bragged, were the envy of Standard Oil. Best of all, he announced, the days of 10 percent annual dividends were over. Oil would earn Bayano shareholders a 5 percent return every month — an astounding 60 percent a year. This was only the beginning; in time, Francis Matthews remembers being assured, "this amount would be doubled."
Then came what was perhaps his most brazen ploy. One day, with a close friend playing the role of witness, he produced a check — payment, presumably, for oil sold by the Bayano Syndicate. It was made out for $1 million. "Hooray! Look what I just got from the Standard Oil company," he shouted. "They're coming my way now."
The startled friend did the rest, and soon more people were clamouring for stock. Leo's theatrics, it was later reported, sold another $1 million worth of shares.
From Empire of Deception by Dean Jobb ©2015. Published by HarperCollins.