The Ages of Fraud Part 1

The Mail Fraud Statue of 1872 gave Postal Inspectors the ability to prosecute scammers. This led to several time periods that saw different kinds of fraud & the downfall of criminals such as Charles Ponzi & Joseph “Yellow Kid” Weil.

The "Green Goods" (1872-1900)

This was the most common type of fraud throughout the 19th century, all promising top quality counterfeit money. Victims would provide money in return for large amounts of counterfeit. However, they would often receive a box of sawdust, bricks, or strips of green paper. Fearing prosecution themselves, victims rarely reported the scam.

Green Goods scams led to the first revision of the statue on March 2, 1889, to include counterfeiters. This allowed the Post Office to intercept suspicious mail and discontinue the spread of these scams. The Green Goods Era also brought several landmark Supreme Court cases for the mail Fraud Statue: Stokes v. United States (1895) and Durland v. United States (1896).

The "Sting" Era (1900-1920)

By the 1900s a new type of con man emerged called "grifters." Buck Boatwright and John C. Mabray were two of the most infamous grifters. Their "Big Store" (a fixed gambling ring) conned victims out of over $5 million over the course of their operations. The "Big Store" targeted wealthy individuals through newspaper advertisements, inviting them to join the "Millionaires' Club," where they were scammed in fixed games.

Since "Sting" rings were not usually advertised through the mail, Postal Inspectors had a difficult time prosecuting these scammers. The "Sting" era led to another change to the statue on March 4, 1909. While language requiring a scheme to be carried out through the mail was removed, it continued to remain Postal Inspection jurisdiction.

The "Golden Age" of Fraud (1920-1940)

The Roaring Twenties ushered in luxury and money that everyone wanted. Inspectors were highly active in capturing well-known fraudsters of the era, like Charles Ponzi and Joseph "Yellow Kid" Weil. Many of the schemes in this era dealt with investments. Boiler rooms emerged from the gambling rings of the "Sting" era, then grew to include selling misrepresented products or investments through the mail.

Several oil merger schemes also developed in Texas, Arkansas, and California. Victims were sold investments in defunct oil companies under false pretenses of mergers with larger companies.

In 1937, Postal Inspectors conducted 6,249 fraud investigations, made 927 arrests, and obtained 638 convictions using the Mail Fraud Statue.


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