In the spring of 1873, London was agog with news about a group of American fraudsters who had attempted – and nearly got away with – one of the most audacious frauds in history. Known as “the great forgeries upon the Bank of England”, they had carried out the ultimate daylight robbery. Over a three month period, the gang removed over £100,000 from the bank by using nearly 27 aliases, over a hundred forged documents and portraying themselves as rich businessmen. When it all fell apart, they were chased all over the world. The first full account of this spectacular crime has been told in The Thieves of Threadneedle Street, whose author, Nicholas Booth, examines some of the parallels between then and now.
When the world’s economies were collapsing in late 2008, I wondered: “When was the first time this had ever happened?” The answer, it turned out, was in 1873 when economies all over the world overheated due to over expansion, reckless borrowing and unsecured credit (history is always doomed to repeat itself). Thanks to the telegraph, international bonds and bills of exchange (glorified credit notes which were as redeemable as cash) there was a brisk trade in credit across the Atlantic. Reading about the causes of the great panic – as the economic crisis of 1873 became known – I came across a reference to “the great forgeries”.
A little digging revealed that the forgers were caught by Willie Pinkerton, son of the founder of the eponymous detective agency. In an even stranger coincidence, Pink (as he was known) had died in the Hotel Biltmore where I happened to be staying in Los Angeles. A little more reading and I was convinced here was a great story. The fraudsters were, like most of their ilk, inveterate fantasists and fabricators. The key to my unravelling the real story was in locating all the original files and copies of all correspondence in the Bank of England archive from the police, the lawyers and the Pinkerton agency.
So for the best part of five years, I started my research and writing the book. When people asked me, did I know anything about fraud, I could honestly reply, “Well I know a lot more now.”
And so, feeling a bit like a five year old trying to sell a pension to a retiree, here are some thoughts for those of you already in the fraud fighting industry. From the outset, I should point out that I am not a fraud expert, never been an investigator, nor am I an international fraudster, either. (Although full disclosure: my name is mentioned on the MI5 website but that’s because of a book I once wrote about a wartime double agent. Honest.) Rarely a day goes by now when some fraud or other isn’t prosecuted or revealed. Last year, there were 172,900 cases of fraudulent activity in the United Kingdom alone. So here are some thoughts which applied then as they do now in the murky world of fraud and forgery.
The most obvious is this.
The nouns change, but the verbs don’t.
Whereas the great forgery in 1873 involved physical presentation of negotiable paper, today they can be carried out in the blink of an eye. Yet a fraudster today has to use the same skills that would have been needed in Victorian times. Patience, cleverness – and sheer effrontery play their part. But, thankfully, investigators are no dummies either, and here, then are some thoughts on the subject.
Believe your own eyes
It’s as true today as it was in Victorian London. If something doesn’t look right, it probably isn’t. The Yankee rascals in 1872 probed and found weakspots in European and American markets which they could exploit, a kind of steam age form of phishing. They noted which banks didn’t check on any provenance, which would thus be worth using as they seemed to take everything at face value. Even before the fraud unravelled in the first weeks of 1873, clerks and accountants had evidence of misprinted slips, addresses that were non-existent, signatures that didn’t match. But they didn’t do anything. Printers who worked on one part of forged documents – all in good faith – didn’t check with others; and in these various siloes, if you like, the fraud prospered.
Why? Because nobody believed their own eyes. The reason most frauds work is because its victims seem willing to suspend disbelief. Whether this is because of the charm of the fraudsters or their sheer believability, gullibility is always common. Even when there is evidence that something is not right, people play into the criminals’ hands. The only antidote is simple: believe what you are seeing and act accordingly.
Do it in a hurry
When the fraudsters in my book opened their bank account at the Bank of England, they did it in a hurry – they had a carriage waiting outside. “I have a train to catch,” one of them told the manager who obliged without checking further. Five years earlier, they had pulled the same trick: claiming they needed a signature in a hurry in midtown Manhattan, they removed $20,000 worth of diamonds from Tiffany’s. In other words, distraction is one of the keys, adding time pressures – especially when someone turns up out of the blue, claiming they are in a hurry. The same happens today – giving a potential victim too little time to think or act properly.
Nobody lies like an eyewitness
Supposedly an old Russian saying, this is very true for 19th Century – and most likely modern – witnesses to fraud. People always rationalise what they think has happened, not what actually did happen. Even when they are under oath, fraudsters often rely on garbled testimony to get off the hook. In 1873, when one of the forgers had been caught in a bank red-handed, he was still able to pull the wool over people’s eyes. Victims will believe what they want to believe. The Victorian fraudsters were credible. The only way to unravel a clever scheme is to be even cleverer: to have a clear and consistent level of information – a money trail – is the only weapon you can use to untie the complexities.
A narrative spine
In today’s world, the profusion of social media and smart phones mean that most people have the attention of an amnesiac gnat. What is needed to make often complex cases understandable is something equally simple – a phrase that gets to the nub of what the fraud was all about, to be tweeted and hashtagged as quickly as possible. In mine, it was simple; the chief m’learned said on the first day of the trial at The Old Bailey that the fraud was “one of those gigantic schemes of fraud, a parallel to which I think might vainly be sought in the criminal jurisprudence of this country.”
The eyes of jurors glaze over when they are bombarded with information. On several occasions in the summer of 1873, they were literally let out for air. There were 200 witnesses, 242 folio pages and it took months of painstaking work to pull everything together. Coming up with a simple phrase can help your case immeasurably.
It’s as true for the humble writer researching archives, as it is for investigators. Fraudsters are clever, resourceful and slippery. Yet they are not infallible. Somewhere they will have missed something. So whether you are looking at Victorian fraud or an evidence train in some sensitive computer code, dig as deeply as you can. There is an amazing wealth of material available. Don’t worry that there are pieces missing; this – what I call archivitis – is rarely ever the case. You are not going to miss the Rosetta stone of evidence. You will find out a way of unlocking the fraud and making it understandable.
Test it out on someone
Because of the complexity of fraud cases, you can easily lose sight of the important points of your argument. The easiest way to counteract this is to road test your ideas on people not involved in the case; when in doubt, find a bright teenager. By talking it through with them, you will get a reasonable handle on whether you are making sense or not. Fraudsters often like the complexity because it can cover their tracks. In the trial in 1873, the testimony on one particular afternoon in court was described thus by a newspaper: “if all the details were given they would, to a certain extent, be unintelligible.” Which is precisely what the fraudsters were aiming for. It is something that you need to address if and when the evidence is presented in court.
When you are trying to summarise a case, don’t be fearful of chopping, changing and excising whole sections of material. Sometimes, particularly in complex cases, less is more: you can literally remove whole sections without affecting your central thesis. You need to get to the thrust of what the story is. The story of my book is simple – it’s a real life Sherlock Holmes meets Ocean’s Eleven. If you can create a similar “high concept” as it is called in movieland, then you have got to the heart of the story.
This time it’s personal
You can write a factual analysis about the Post Office, but to make a story, you need to relate the journey of one letter. Fraud is like that; in some sense, it’s abstract. That’s why fraud is always termed a crime without victims, there’s rarely violence and because it is white collar crime, it is somehow less interesting to many people. But for victims who have lost their livelihood, whose businesses have collapsed, whose relationships and families have been torn apart, it isn’t. Fraud is horrible and can have far-reaching consequences. If you can show just how terrible its effects can be, you will strike a better chord with jurors and the general public.
“Of course it’s more complex”
A common reaction to anyone who has tried to simplify things. By its nature, my job is to do exactly that. When I wrote the book, I was trying to cram a quart of information into a pint pot. By their own nature, frauds and forgeries can be infernally complicated. The fraudsters are often literally banking on the latter as they carry out their activities. But the point of simplifying it all is to literally make the whole thing understandable. Any attempt at untying a Gordian knot is tough – but will be very useful.
And finally, some reassurance. Ultimately, greed is what does for most fraudsters. That was certainly the case in 1873 – and most likely, the same today. And for all their supposed genius, most fraudsters are undermined by taking things too far. Good luck – and good fraud hunting.
Written by Nicholas Booth