The story of the great diamond scam ....




In winter 1872 the American financier Asbury Harpending was in London when he received a telegram: the American West discovered diamond deposit. Source of information was reliable - William Ralston, the owner of the Bank of California, however Harpending took it as a hoax, perhaps inspired by the recent discovery of vast diamond deposits in South Africa. However, by the early reports about the gold that was found in the West, the United States, all also were skeptical, but it was true.


Harpending showed telegram friend and colleague, Baron Rothschild (one of the richest men in the world), saying that it is probably a joke. Baron, however, replied: "Do not be so sure. America is very high. She has already presented the world many surprises. Maybe there are others in reserve. " Harpending without delay by the first steamer returned to the States.

When he got to San Francisco, there reigned excitement reminiscent of the gold rush days of the late 1840s. Diamond mine discovered two simple miners, Philip Arnold and John Slack. They did not disclose its location in Wyoming, and when a few months earlier were taken to a highly respected expert geologist, we traveled a circuitous route that he did not remember the road. Once in place, the expert saw miners dig diamonds. Back in San Francisco, an expert pointed to several jewelers stones, one of which estimated their value at 1, 5 million dollars.

Harpending and Ralston Slack Arnold and asked to go with them in the New York jeweler Charles Tiffany to confirm pricing. Prospectors not immediately agreed - they felt trapped: how can you be trusted this city slicker? What if Tiffany and financiers are going to steal their core right from under his nose? Ralston tried to dispel their fears by paying them 100 thousand dollars and put in the bank 300 thousand in case the deal goes through. They agreed.

A small group went to New York, where everyone had to get together in a mansion Samuel L. Barlow. Gathered the cream of urban aristocracy - General George Brinton McClellan, who commanded the army of northerners in the Civil War, General Benjamin Butler, Horace Greeley, editor of the newspaper "New York Tribune" Harpending, Ralston and Tiffany. Only Slack and Arnold were absent - they went to see the city.

When Tiffany announced that the stones are real and worth a fortune, financiers hardly managed to cope with the excitement. They contacted Rothschild and other magnates, to inform them of the diamond core and invited to participate in the investment. At the same time, they reported miners that want to conduct another test: they insisted that the expert geologists who choose themselves, went to Arnold and Slack in place to assess the capacity of the core. Those reluctantly agreed. They said that they do not care it's time to go back to San Francisco. Stones, who examined Tiffany, they left Harpending conservation.

After a few weeks of the best experts in the country Luis Janine met prospectors in San Francisco. Janine, finished a skeptic, was determined to prove that lived worthless. With him went Harpending and several interested financiers. As is the case with the previous expert team led prospectors confusing way through numerous canyons, giving orientation. Upon arrival, the financiers have watched in amazement as Jeanine rummages around, destroying nests, turning over boulders and finding emeralds, rubies, sapphires, and more often - diamonds. The study lasted eight days, and eventually Janine told investors that they were the owners of the richest deposits of precious stones in history. "I can vouch for - he told them - that a hundred workers and appropriate equipment diamond mining will bring up to a million dollars a month».

Returning to San Francisco in a few days, Ralston, and other Harpending quickly create a corporation of private investors for 10 million dollars. The first thing of course they decided to get rid of Arnold and Slack. It required them to conceal their excitement - they did not want to hear about are the true value of the deposit. So they played a show. "Who knows whether rights Jeanine - they said prospectors - live might not be as rich as it seems." It caused only irritation. Financiers have tried to change tactics, angry miners warning that if they will want to have a share in the enterprise, the unscrupulous millionaires and investors, organized the corporation eventually oberut them. It is safer to get them 700 thousand - at the time an incredible amount - forget about greed. This argument seemed convincing miners, they agreed to take the money in exchange for signing a paper on the transfer of all rights to the land and handing financiers maps and plans.

News of the fabulously rich deposit spread everywhere. Across Wyoming worked prospectors. Meanwhile Harpending and companies spend millions received from investors, buying equipment, hiring the best talent and furnished luxury offices in New York and San Francisco.

However, a few weeks later, having made the first trip to a place they have learned the bitter truth: not a single diamond or ruby ​​could not be found. Everything was fake, and they - ruined. Harpending, unwittingly, involved the world's richest people in the loudest scam century.

Arnold and Slack, to inflate its major wealthy clients, did not hire an engineer and not a dummy bribed Tiffany. All the experts were present, and they sincerely believed in the existence of core and value stones. What was the deception in the history, since it yourself Arnold and Slack. These two seem as simpletons, hillbillies, so naive that nobody for a moment, and it never occurred that they could be capable of such daring deception. The miners used the law "seem dumber than your client" - the first commandment deceivers.

The plan was very simple scam. In just a few months before to announce the "discovery", Arnold and Slack went to Europe, where he acquired precious stones about 12 thousand dollars (the money earned by them in their time on the gold mining). Then they bustles "mine" these stones and invited the first expert who "found" the stones and brought them to San Francisco. Jewelers who have studied the stones, including Tiffany himself psychologically succumbed to the hype, raised around the findings and their price is much overstated. Then Ralston miners paid 100 thousand as insurance, and immediately after a trip to New York, they went to Amsterdam, where he bought bags of rough stones, and then returned to San Franiisko. They are the second time worked on mine, so now you can find more treasures.

The success of the scheme, however, were not these tricks, but the fact that Arnold and Slack brilliantly played their role. During a trip to New York, where they moved in the society of millionaires and tycoons, they are very accurately portrayed village boobies, dressed in a too short and tight pants and jackets and incredulous glance at everything they saw in the big city. Nobody would have believed that these simple-minded provincials could fool the most experienced and cynical businessmen of his time. And when Harpending, Ralston Rothschild and even acknowledged the existence of veins, anyone who doubted would have had to question the mind of the most successful businessmen in the world.

As a result, the reputation Harpending was irretrievably destroyed and Rothschild learned his lesson and will never become a victim of fraud. Slack had my share and disappeared, it could not be found. Arnold went home to Kentucky. In the end, the paper for the sale of rights to land were genuine and legitimate, buyers hire the best consultants, and if you lived exhausted, it was not his problem. With the money Arnold turned his farm into a great economy and opened its own bank.

(from the book by Robert Green's "48 Laws of Power")

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