The larger-than-life exploits and make-believe world of 1920s Chicago con man extraordinaire Leo Koretz – and his escape to a new life in Canada. A riveting tale of greed, glamour and one of the greatest swindles in history.
HE RAN ONE OF THE LONGEST, most elaborate and most successful swindles in history. For almost twenty years a charming, smooth-talking Chicago lawyer enticed hundreds of people to invest as much as $30 million (upwards of $400 million today), most of it in phantom timberland and oil wells in Panama. His Bayano River Syndicate, he claimed, controlled millions of acres near the Canal Zone, including oilfields that produced a torrent of crude and earned investors an astounding sixty percent return. John D. Rockefeller’s Standard Oil conglomerate, he assured his grateful investors, was desperate to buy into the Bayano windfall.
His name? Leo Koretz, the Bernie Madoff of the 1920s, a con man extraordinaire posing as a financial genius. The New York Times considered him “the most resourceful confidence man in the United States.” The Chicago Daily Tribune agreed, describing him as “the most boldfaced swindler” of his time. And when his scheme collapsed in 1923, under the weight of his own dazzling success in reeling in the suckers, he almost made a clean getaway to a life of luxury in Canada.
LEO’S METHOD WAS simple: Promise high returns and, when the money rolled in, use some to pay fat dividends to keep the stockholders happy while skimming off the rest. It’s the template Madoff used to rake in billions of dollars, a financial sleight of hand known as a Ponzi scheme. Charles Ponzi, a contemporary of Leo’s, used it to fleece unsuspecting immigrants, promising huge profits from the resale of postal-reply coupons. But Leo mastered the scam long before Ponzi stole a dime and it took his imagination, bravado, and charisma to keep it running for almost two decades.
People camped out on Leo’s doorstep and begged him to take their money. The lucky few he allowed to invest plowed their fat Bayano profits into more worthless stock. Nothing could shake their faith in the man they hailed as “The New Rockefeller,” not even the exposure of Ponzi’s fraud in 1920. Investors simply gave him a new nickname: “Our Ponzi.”
• A Vanity Fair “Hot Type” pick and an Indie Next pick for June
• An Amazon.com Business Book of the Year 2015 and a Best Book for May
• A Toronto Star / Metro Canada / Pittsburgh Tribune-Review / Raleigh News & Observer / NPR Utah recommended summer read
• A Chapters/Indigo/Coles and BookNet Canada Indie bestseller
• A Huffington Post Canada audiobook pick for fall
• New! Empire is a Globe and Mail Top 100 Book of Year, a National Post Best Book of the Year, a CBC Books choice for holiday gift-giving and CNBC Power Lunch host Brian Sullivan’s pick as one of the top 5 books of 2015.
• Empire was the Chicago Writers Association’s 2015 Nonfiction Book of the Year, won the Crime Writers of Canada Arthur Ellis Award and was a finalist for one of Canada’s top awards for non-fiction – the 2015 Hilary Weston Writers’ Trust Prize.
LEO LIVED WELL thanks to his gullible victims, splurging on a mansion overlooking Lake Michigan, Rolls-Royce limousines, suites at the finest hotels in Chicago and New York, and a cache of bootlegged booze. He was a family man with a wife and two children, but his personal life was as phony as his professional one – a web of lies and trysts with a succession of mistresses. “I don’t see why these women won’t leave me alone,” he once complained in jest, knowing full well the answer was the charm and money he used to win their affections.
His house of cards came crashing down in 1923 when a group of investors boarded a steamer and headed to Panama, eager to tour their lucrative holdings. Leo saw them off, then scraped together as much cash as he could. By the time the delegation discovered the truth – their bonanza was a swath of worthless jungle and swamp – Leo had disappeared. When the news broke, Leo and his sensational Bayano fraud – the swindle of the century, some called it – made headlines across North America and beyond. His wife and close-knit family were devastated. Many of his investors swallowed their losses in silence, too embarrassed to admit how thoroughly they had been duped.
ENTER CHICAGO STATE’S attorney Robert Crowe, a man whose ascent in the ruthless world of Chicago politics paralleled Leo’s rise to financial stardom. Crowe, one of the most powerful Republicans in the city, was making headlines as a crusader against gangland crime. By 1922 the mayor’s office, and perhaps even the governorship, seemed within his ambitious grasp. But corruption pervaded politics and justice in Chicago, and Crowe the crime-fighter enlisted crooks and thugs to intimidate his political opponents and win elections. Crowe and Leo had begun their legal careers together, and when the Bayano wizard’s swindle was exposed it was Crowe who launched an international manhunt to bring his former colleague to justice.
Leo, meanwhile, hid out in New York City for several months before making his way to Nova Scotia, on Canada’s Atlantic Coast. He grew a beard to mask his identity, adopted the alias Lou Keyte, and posed as a retired financier-turned-literary critic. He became a regular at hotels and dance halls in the provincial capital, Halifax, and joined the exclusive Royal Nova Scotia Yacht Squadron. He converted a secluded hunting lodge into a posh estate where he entertained like a real-life Great Gatsby and attracted a new circle of friends and female admirers. He even bragged he was a close friend of bestselling author Zane Grey, who spent part of the summer of 1924 fishing for tuna off Nova Scotia.
Chicago police and federal agents spent almost a year of chasing anonymous tips and false leads. It began to look as if Leo Koretz, master of the Ponzi scheme, might be a master escape artist as well.
EMPIRE OF DECEPTION is the first book to chronicle the exploits of one of the slickest con men in history. Itcaptures the intrigue and drama of Leo’s stranger-than-fiction story while recreating an era when it seemed as if everyone was entitled to easy riches. The dot-com bubble and the stock market meltdown of 2008 are reminders those heady times were not so different from our own. The book establishes Leo Koretz, not Charles Ponzi, as the first to master the pay-dividends-from-capital investment scam. It dissects how con men and stock swindles operate. And it brings to life a time and place when anything – even vast oilfields in faraway Panama – seemed possible.
Leo’s brazen fraud is a compelling story that combines drama and dark humor. It is a cautionary tale that will resonate with readers who are curious about how con men such as Bernie Madoff operate and how they prey on the trust of others. It is a rollicking tale of greed and gullibility, lies and betrayal and grandeur and delusion that could have been ripped from today’s headlines. It is a story played out against a Jazz Age backdrop that reaches from the tough streets of Chicago to the remote jungles of Panama, from the glitter of Manhattan’s finest hotels to the backwoods of Nova Scotia.
The incredible-but-true saga of Leo Koretz and his spectacular oil swindle exposes the pitfalls, then and now, of too much trust, too much greed and too little common sense.
The latest reviews:
Order the Canadian (HarperCollins) edition (Empire of Deception: From Chicago to Nova Scotia – The Incredible Story of a Master Swindler Who Seduced a City and Captivated the Nation) from Amazon.ca and Chapters.Indigo.ca
Order the large print edition from Thorndike Press
Recent interviews and media coverage of Empire of Deception
Read my feature articles based on Empire of Deception, published in the Toronto Star, National Post, The Walrus (web exclusive) and other major publications.
Advance praise for Empire
Read pre-publication reviews from bestselling authors Michael Korda, Karen Abbott, Jonathan Eig, Gary Krist, Douglas Perry, Neal Thompson, Michael Lesy and Marq de Villiers
Awards and nominations
Finalist for the 2015 Hilary Weston Writers’ Trust Award for Nonfiction
Jury Citation: “Readers waiting for a rollicking tale of white-collar crime couldn’t do better than Dean Jobb’s Empire of Deception, about Leo Koretz, one of North America’s most infamous swindlers. The fact that it all happened back in the Roaring Twenties doesn’t matter; it’s a lively story that starts in Chicago, moves on to Panama, and ends up in Nova Scotia. Jobb has lifted a great crime yarn into a beautifully researched piece of financial history; how he explains the greed and gullibility of Koretz’ wealthy victims makes for a delicious read.” (Check out The Globe and Mail excerpt, National Post excerpt and CBC Books coverage.)
Winner of the Chicago Writers Association’s 2015 Book of the Year Award
Winner of the Crime Writers of Canada Arthur Ellis Award for best true-crime book of 2015