“The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Greed, in all of its forms, greed for life, for money, for love, knowledge, has marked the upward surge in mankind and greed, you mark my words, will not only save Teldar paper, but that other malfunctioning corporation called the USA. Thank you very much.”
— Gordon Gekko in Wall Street
Years ago, back when the internet was still a wonderful, half-understood landscape, and as we were all (or at least most of us) trying to find our way through it, we began seeing a fascinating, but irritating trend starting to flood into our email inboxes.
These importuning messages started to come our respective ways from individuals we had never met, offering us vast sums of money if we would just contact them (or, variously, agree to meet them in a quiet, isolated, smoke-filled venue in New York City or London). We would just need to provide some up-front money to unlock the wealth that would come our way if we agreed to act as an intermediary for moving the big sums of cash in our direction.
Usually, it was some extraordinary bank balance that was being held up by Pecksniffian duplicitous bankers, customs officials, central bank officials or others. All would be well and money would rain down upon us like a summer storm — but only if our new best friend could sign us up to serve as the temporary recipient of this wealth. As a token of their good faith, they usually agreed to give us a hefty cut of those funds, once everything was sorted out.
Sometimes, too, even more astonishingly, it was our great good luck to be the second cousin of someone’s heretofore unknown step-mother or great uncle (had these people read one too many Victorian novels?) who, it turned out, now had no other living relatives. As a result, we were the sole beneficiary of a vast fortune made “out East”, but only if we anted-up the inevitable up-front cash needed to make possible all the necessary arrangements for us to become sudden millionaires. But if we did that, it would be Christmas in July for us.
These enticements quickly gained the nickname of “419” scams because such cons were described in Section 419 of the Nigerian criminal code. Many of those would-be scammers probably were Nigerian, but certainly not all of them. Soon enough, citizens of many nationalities joined in the fun of scalping the innocent, greedy — or both.
Some years ago, an acquaintance of this writer, an international development economist with extensive experience in both East Asia and West Africa, decided he would carry out a carefully structured, controlled experiment on 419s. Over the period of a month, he would respond to each and every offer and keep the electronic conversations going with his interlocutors for as long as he could, but without agreeing to transfer any money or provide information about his bank accounts or other personal information.
As he described it to me later, within a month, among other conversations, he was in active correspondence with three widows of the late Zairean dictator, Mobutu Sese Seko, as well as a senior daughter of the king of Morocco — all of whom had fortunes that could be unlocked only by an advance payment or two or three from him to their bank via a trusted intermediary and for that service, a nice payment would be forthcoming, of course. Of course.
The profusion of these scams now means that, like many readers, I receive dozens of these offers every week. They all promise untold riches, just as long as I provide that crucial upfront money. However, I’ve never had the chutzpah to try my friend’s experiment because these con artists are extraordinarily clever these days.
After first cleaning out whatever my bank balance was, they’d probably clone my email address and use that access to con yet other unsuspecting individuals. Now, of course, there are all manner of other scams. Sometimes they are offering to settle outstanding tax bills or dangle property investments in unlikely locales. Now there are also dazzling opportunities for rewards that come with bankrolling proven anti-Covid technologies and the emergency supply of medical equipment, or funding research that will do everything from curing cancer to enlarging body parts. (Okay, that last one is made up — we only see that offer pasted on the sides of buildings or on the reverse sides of stop signs.)
Regardless, at least for me and for most people nowadays as well, these electronic inducements go straight into the email trash and are then quickly deleted entirely, without ever being opened, lest they prove to be malware automatically opening our email and social media directories or, worse, our internet banking details and the rest of our private information. Still, some people clearly continue to fall for these tricksters — which is why they continue to operate and continue to send out these messages. People really want to be rich, especially if they don’t need to do much work for it.
Probably the most infamous of the Ponzi schemers was (and I say “was” because he has just died in prison after years of being locked away) Manhattan’s own Bernie Madoff. He understood all the investment fund operator’s tricks — and, more important still — he understood human nature even better.
And so here is where we begin to get to the core. People really do want to get rich; they generally don’t want to work too hard for it if they can avoid it; and when enough cash is being waved around, they often manage to delude themselves into believing this is the real deal, the mother lode, the pot of gold at the end of the rainbow, the Midas touch — for real. Or, put another way, greed can be nearly infinite if the opportunity is right.
History is replete with such occurrences. It is as if humans never really learn that when something is too good, too quick, too easy, it usually is. Throughout history, people have been caught up in speculative investment bubbles such as the great tulip bubble, the South Sea bubble, the Darien Colony bubble, a massive French government debt bubble, and so on. There were probably even things like this back with the ancient Sumerians over investment opportunities in bogus Mesopotamian irrigation projects.
Sometimes these speculative investments have actually been built on real products, but more often they weren’t. It is as if people put their street smarts in escrow and then invest (or bet) in these opportunities anyway, perhaps because of raging, virulent cases of some unchecked FOMO. That is, of course, precisely what promoters of such schemes bank on — once people hear about a great new opportunity, they clamour to be part of it.
Another variant of this theme is the pyramid or Ponzi scheme. There really was an actual Charles Ponzi whose increasingly extravagant scams in early 20th-century New York City gave this particular investment con its modern name. Here the plan is to collect investors whose unrealistic ROIs (returns on investment) are, at least initially, actually fuelled by the constant addition of new money from new investors — all lured into the con by reports of the great returns the earlier investors were getting. Increasingly eager to be part of this unmissable opportunity, the new investors (or suckers) bring their money to pay into the con as well — and word of their apparent success sucks in yet further investors like a giant vacuum cleaner running at warp speed.
Eventually, of course, such schemes collapse because the pool of possible new entrants eventually runs dry (the population is finite, after all), but the clamour from those already snared in the net and who have been promised those great returns never stops. When the returns eventually don’t materialise, they demand their investments back — and that is when the house of cards collapses and people can go to jail.
In the small European nation of Albania, Ponzi and pyramid schemes were so viciously crooked that when they collapsed in 1997, as the losses suddenly started to mount, the pandemonium literally provoked a revolution. Many thousands of suddenly impecunious Albanians fled the country and crowded on board tramp freighters and ferries bound for nearby Italy, just to escape the misery.
Probably the most infamous of the Ponzi schemers was (and I say “was” because he has just died in prison after years of being locked away) Manhattan’s own Bernie Madoff. He understood all the investment fund operator’s tricks — and, more important still — he understood human nature even better.
He sold his investment firm’s offerings to people on the grounds he could guarantee consistent, high levels of ROI as his victims’ investments with him were as safe as houses. Improbably enough, his promised ROI was around 25%, year-on-year, something that should have signalled alarms with flashing lights and screeching sirens to anybody with an ounce of common sense that there was something fundamentally not right about it. And yet, many people who had widely acknowledged street smarts, and long, winning track records professionally, handed over their cash to him, perhaps, perversely, because of the very outrageousness of those promises.
Some of the publicly acknowledged victims were ultra-sophisticated, experienced-at-life people. They included film producer/director Steven Spielberg, film studio mogul Jeffrey Katzenberg, actress Zsa Zsa Gabor, acting power couple Kevin Bacon and Kyra Sedgwick, Holocaust survivor and human rights campaigner Elie Wiesel, actor John Malkovich, veteran broadcaster Larry King and sports team owner Fred Wilpon, among so many others.
The common thread to Madoff’s sales pitch was that having such people as clients, they could then serve effectively as character witnesses to entice future, further victims. Their presence as investors also meant they could also steer potential investors into Madoff’s web because they would feel privileged to be allowed into the charmed circle, and who would then feel blessed to be allowed into this space. It all worked like a fine Breitling watch — until it didn’t.
What still doesn’t make complete sense, however, is who is really pulling the strings in all this and why no one can find any trace of any of this lucre anywhere in the entire global financial system, and what the perpetrators expected to gain out of it all.
And here we have key elements of the latest con that now squats unpleasantly in the news in South Africa: the use of prominent names as guarantors of the propriety of the scam despite the scam’s apparent implausibility, and the truly gargantuan amount of this manna raining down on South Africa from the heavens, or at least from a secretive Singaporean who styles himself “The Last Emperor of Java”.
First, there was anti-apartheid struggle stalwart and former government official Tokyo Sexwale’s claim he had become one of the South African managers of a massive — truly massive — transfer of funds from the White Spiritual Boy Trust, remitted via South Africa’s Reserve Bank. Second, was the mysterious claim that the funds had supposedly been spirited away by nefarious financial tomb robbers.
Then there was the fact the purported total of this gift — $70 trillion — is orders of magnitude larger than the entire South African GDP. Really. And nobody noticed the supposed giver never inquired about the status of this gift, never asked for photographs or video clips of ribbon cuttings to the projects financed, or pictures of the faces of beaming students whose university fees were paid by this money? (Of course, one of the other supposed trustees has a checkered financial past in South Africa as well, so this is rather messy financial management, at a minimum.)
Another lesson seems to have been learnt as well. If you are going to tell a whopper, make it a really big one — something at least on the order of the multi-continental investment scam masterminded by mysterious financier/swindler, Augustus Melmotte, in Anthony Trollope’s Victorian novel, The Way We Live Now. The events and plot complications in the novel were inspired by a raft of real scandals and financial shenanigans in Britain, France and America, when Trollope had written his novel. In addition to weighing in at about a thousand pages and 100 characters, Trollope’s novel was turned into a fine TV mini-series for the BBC about 20 years ago. Watch it if you can find access to it for clues to interpret the current tale.
But in our present graft- and corruption-ridden circumstances, what seems much more likely than a magical but ever-vanishing gift of $70-trillion from an invisible Singaporean is that, given his prominence, Sexwale was brought on board to be the respectable public face of this plan, promised commissions on funds raised (as he has admitted), and that he was supposed to entice others to join in the giving — or the getting.
What still doesn’t make complete sense, however, is who is really pulling the strings in all this and why no one can find any trace of any of this lucre anywhere in the entire global financial system, and what the perpetrators expected to gain out of it all.
This is unlike the initial success of those flim-flam con artists in Albania, or of the Charles Ponzi or Bernie Madoff scams, just to name a few. But what this curious affair does show is that South Africans really want to believe a monetarily bountiful deus ex machina is going to arrive. That if they can just manage to click the heels of their national ruby slippers in imitation of Dorothy in the Land of Oz, everything will be okay. But there is no Kansas to return to here. The rebuilding is going to be hard work, and a gift from the “Last Emperor of Java” isn’t going to fix a damned thing. DM
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