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Gregor MacGregor


Taken from the Daily Mail, Dec 29, 2001 by Michael Streeter.

Gregor MacGregor THE tall uniformed figure with bushy whiskers cut an impressive figure as his ship sailed into Britain. Alongside him was his beautiful wife, niece of one of the world’s most famous men, and together they promised to be one of the most glamorous of couples in high society.

But Gregor MacGregor, a descendant of Rob Roy, was intent on far more than glamour or fame.

The year was 1820 and MacGregor a lauded war hero for his exploits in South America, had hatched one of the most daring frauds of all time.

His plan was simple but audacious: to invent an entire kingdom, people, capital city; civil service and currency, and persuade people to buy land and shares In the venture.

And they did, in their thousands. Many Scots lost their entire fortunes. Many others lost their lives. But not before the self-styled ‘Prince’ Gregor MacGregor had dazzled London and Edinburgh society - before being unmasked as the only fraudster in British criminal history to sell shares and land in a non-existent country.

MacGregor was born on Christmas Eve 1786, the grandson of Gregor the Beautiful, the clan chief. But Scotland could not contain the headstrong MacGregor, who served in the Peninsula war in Spain before leaving Europe in 1811 to fight the Spanish in South America.

It was here he met the Liberator of Latin America, Simon Bolivar who was hugely impressed by the Scotsman’s energy; bravery and skill as a military leader, and eventually promoted him to general. The handsome adventurer was later permitted to marry Bolivar’s attractive niece, Josefa.

MacGregor’s fame as a military man and his exploits were known to a British public eager to lap up news of the exotic Spanish Americas.

But fame did not guarantee wealth, and coming from a family with more history than money, it was the lure of riches that drove the increasingly impatient MacGregor. From 1817 to 1820, he lived the life of a pirate, attacking Spanish strongholds in the Caribbean and up the coast of Florida, then still in Spanish hands. His exploits included capturing and occupying Amelia Island off Florida in 1817, backed by a motley ‘army’ of young boys and toothless old men.

MacGregor's plan to sell off the land to the fledgling United States and then invade the rest of Florida came to little. Left high and dry by the failure of his supposed American allies to send reinforcements, he was forced to sell the island to a pirate acquaintance before disappearing into the Caribbean once more.

But MacGregor was never daunted. by setbacks and in 1820 he hit upon the idea which was to bring him fame, fortune and - ultimately - disgrace.

He sailed with his loyal retinue of followers to the unpromising-looking swampy part of Central America known as the Mosquito Coast. Here he befriended the local ’King’, George Frederic Augustus. At a meeting in April 1820, MacGregor plied his new friend with whisky and rum before the pair signed an extraordinary deal.

The Scotsman was to be granted more than eight million acres of land along the coast and far inland, apparently forever. In sober reflection, Frederick was to have a very different recollection of just what he’d given to MacGregor, but the deed was done. Armed with this huge area of land, MacGregor and his beautiful wife immediately set sail for Britain, where he announced himself in London with great pomp and ceremony as Gregor I, Cazique (or Chief) of Poyals, the name he had chosen for ‘his country’. Britain was just recovering from the ravages of a successful but debilitating European war. Post-war austerity gave way to a passion for gambling and fast living, personified by the outrageous dandy and gambler Beau Brummell, whose behaviour had shaped the early years of the Prince of Wales crowned George IV in 1820.

There was also a growing mania among the emerging middle classes for stocks and shares in all kinds of exotic ventures, including South America, where a credulous British public supposed all manner of treasure and riches had been abandoned by the retreating Spanish. This ensured that MacGregor’s money-making scheme was a success both in his native Scotland and in England.

His plan to make money from his ‘kingdom’ had two different approaches. One was to raise capital of Ł200 000 (millions in today’s money) by issuing 2,000 bearer bonds at Ł100 each, the other to sell land and commissions in Poyals. In this he was aided by a skilful and shameless marketing campaign promoting the virtues of what one marketeer called ‘this unsurpassed Utopia’. There were no half-measures in the hard sell. Poyals was extravagantly described as a land of cathedrals, public buildings and banks, with all the other trappings of a civilised nation. Its capital, St Joseph, was said to boast an opera house among its fine buildings. Meanwhile, the land itself was described as having unimaginable fertility and beauty, a land where gold nuggets and diamonds and pearls were as ‘plentiful as pebbles’ and where grain could grow without the need for sowing.

Such was the promotion’s success, that at least one ballad was sung in MacGregor’s praise; books and pamphlets extolled the merits of this fine new nation and an excited public clamoured to buy into this irresistible country led by its charismatic and heroic Prince. Buoyed by his success, MacGregor opened an official Poyalsian Legation to Britain in the City of London and opened land offices in Glasgow, Stirling and Edinburgh. Many poorer people, who could not afford to buy the expensive bonds, bought small parcels of land or signed up as shoemakers, shopkeepers, jewellers, teachers and clerks or other craftsmen, all with skills apparently much needed by the booming new state. MacGregor - who often referred to himself as Sir Gregor, though no one knows who bestowed the title on him — even issued his own Poyals currency and sold commissions in the nation’s army. By the end of 1822, MacGregor had assumed the status of a Sovereign Prince and the bond and land sale schemes were making him, in today’s terms, a multi-millionaire. The whole elaborate edifice however, now threatened to become a victim of its very success.

Early In 1823, two ships — the Honduras Packet and the Kinnersley Castle - set sail from Leith, bound for Poyals. On board were some 240 excited emigrants, many of them Highlanders, eager to inhabit the wonderful land they had invested in with their life’s savings and possessions. They included a Mr Gauger, a banker from the City of London who was excited at the prospect of becoming the first manager of the Bank of Poyals, and a Scottish shoemaker equally entranced at the thought that he was to be the Official Shoemaker to the Princess of Poyals.

The starry-eyed colonists were assured the only legal currency in their new home would be the Poyalsian dollar and so, before departing, they exchanged their old Scottish and English pounds for this exciting new currency. What did they care for old money from the old country anyway? A wonderful new world of plenty awaited them.

What the settlers thought when weeks later they arrived at their new home one can scarcely imagine. Indeed, it was reported that some of them insisted on sailing further up the coast, so sure were they that they had been taken to the wrong place.

But the truth soon became horribly apparent. As the hapless settlers rowed ashore a desolate, wretched scene confronted them. Standing where the towering buildings, opera house and banks of the shining capital of St Joseph were supposed to be were instead four tatty, rundown shacks, built amid the remains of a doomed British colony abandoned back in the 18th century. Where the rich fertile plains and gold nuggets were promised were instead inhospitable swampy forests, full of biting insects, venomous snakes and deadly disease.

There was no Poyalsian army, no royal family no civil service, not even one solid building. The great, prosperous nation of Poyals had all been an elaborate illusion, a heartless fraud committed on men and women from hard-working backgrounds who had dared to hope for a better life in the Americas.

The obvious next move for the settlers would have been to clamber back aboard and set sail immediately for Scotland. But their misfortunes were just beginning. Shortly after their arrival, a hurricane blew through Central America, wrecking their two ships and destroying any immediate hope of getting home. The days and weeks that followed were full of misery and tragedy. Many of the 240, who included elderly people, began to succumb to tropical diseases. Starvation set in among people who were totally unsuited for survival in tropical swamplands. The local people refused to help, scorning their Poyals currency and pointing out that their King, George Frederic, insisted the white settlers had no legal right to be there anyway.

The situation appeared hopeless. The shoemaker, who had dreamed of fame at the Poyals court, lay down in his hammock and shot himself. Others drowned trying to escape. Eventually, as starvation and disease threatened to wipe out the entire colony, they managed to send word of their plight to the British colony of Belize and a rescue mission was launched.

Out of some 240 who left Leith harbour, barely 50 made it back to their homeland. When news of the calamity in Poyals and the true story of the state of that kingdom reached Britain in August 1823, the reaction was predictable.

Quite how MacGregor had expected to get away with it once anyone arrived in his ‘paradise’ is unclear. Possibly he had planned to make an escape with his millions but was undone by the timing. Perhaps he had even begun to believe his own propaganda that such a place existed. Incredibly, MacGregor at first tried to bluff things out, blaming the Belize colony for interfering and even for the theft of Poyalsian belongings, and he tried to raise yet more money on a re-issue of the bonds.

By November the game was up. The bonds were worthless and there was growing public rage at the enormity of the fraud he had perpetrated, especially among his fellow Scots. His funds were also evaporating as he spent money on his retinue and trying to re-ignite interest in Poyals.

Late that year he, Josefa and their two small children, Gregorio and Josefa, followed the traditional route for British fraudsters, by fleeing to Boulogne in France and from there on to Paris where their third child, Constantino, was born. However, the world had still not heard the last of Gregor MacGregor and his fantasy kingdom. By 1825 he had repeated the entire hoax once again on the French public, raising thousands of pounds on the dream of Poyals. By now, though, his luck was failing him.

An associate in Paris was jailed for fraud and MacGregor himself spent some time in jail before he was released and acquitted on appeal. An impertinent return to London was ill-advised and once again he had to talk his way out of a prison sentence as angry investors sought his indictment. For some years he lived in Edinburgh, vainly trying to sell plots of land in a kingdom that didn’t exist, with land he didn’t own. However, by the time his loyal wife Josefa died in Scotland in 1838, MacGregor had become a lonely, broken man. He left Scotland quietly in 1839 to return to Venezuela, the scene of many of his epic military adventures. There at least he was treated with respect as a returning war hero and lived comfortably on a military pension until his death in 1845.

His name can still be seen on a giant monument, built in Caracas to honour Venezuela’s heroes of Independence. However, his legacy in his homeland is very different. His outrageous fraud cost more than just the livelihoods of those he fooled. It may have been a brilliant fraud by an often brilliant and courageous man, but Gregor MacGregor’s extraordinary life was overshadowed by the deaths of his poor, unfortunate victims.

Michoel Streeter is researching a book about Macaregor’s fraud.