Imposter scams involve social engineering to help you trust that the person you are talking to is reputable. People do this to part you from your money or information.

In this article we will discuss 3 scams in 3 different centuries, and how they went down.

Gregor McGregor: The Cazique of Poyais (1821)

Gregor McGregor’s biggest red flag might have been that his first and last names were the same. Fascinatingly, this was one of the true things about him!

So was this: After serving in the armies of 4 different countries, he came into 8,000,000 acres of land on the Mosquito Coast of New Honduras by way of the king of Spain. It was larger than Wales and looked quite pretty, but was not good for agriculture. This new land was to be Poyais, and he, as Cazique, or chief, wanted only the very best citizens.

Returning to London with his new wife and their heir to the throne, McGregor was welcomed with open arms. The family made quite a fixture at upper-crust dinner parties.

McGregor talked of his need for good citizens in the new country, and many wealthy people lent him their lavish homes to use. Such homes became bases of operations where the Cazique worked on or delegated bond issuances, admin tasks, and more. For others’ great work on behalf of the new nation, they were obtaining titles from which the cup of Poyais was overflowing.

Why invest in Poyais? While London offered 3% returns, McGregor said he’d pay 6%.

Gold could be traded for Poyais currency, which was printed by the same printer as that of the Bank of Scotland. Land titles were quite affordable. Where some could barely purchase an apartment in London, there were lush 1,000-acre estates available in this new land. Royal titles could be obtained. A general found himself rising above his station to Vice Cazique, for example. Shipping rights, trading rights, building rights; all that could be done was up for grabs to those willing to pitch in for the good of the nation.

What did McGregor gain? Fame, for one, but also direct payments of £200,000, which would be over half a billion today. Bond sales eclipsed £1,300,000. If this worried the incoming Chief of the Treasury, it is unknown.

2 ships set sail from Great Britain with 150 settlers, and as they rode off – maybe saluting their ruler on the shore – McGregor made his way to repeat the process. Only 50 of the settlers returned, many feeling that the Cazique had not sent them to their death, but that he had been betrayed, for what other explanation could there have been?

1825: In France, McGregor was arrested. At trial he was acquitted and went back to London to run a few more scams until settling down in Venezuela for the rest of his life.

And that’s the end of that story.

Sydney Portier’s Fake Son (1983)

Standing outside of Studio 54, 19-year-old David Hampton had a problem: He could not gain entry into the exclusive nightclub. His friend told the doorman that he was the son of Gregory Peck, prompting Hampton to pipe up about his dad, Sydney Portier. They gained entrance and were treated like celebrities.

Hampton leveraged this scam for adoration more than money. Using the name David Portier, New York celebrities and other members of the upper class were inclined to welcome him into their homes. At times, he would claim to know a couple’s college-aged son. At others, he would call them to say he’d missed a flight to Los Angeles that had his bag.

It all seemed innocent: “Hi, Doctor Morrison. I got stuck on the shuttle to JFK and guess I’m in town for the night. Want to have dinner?” Before he knows it, he’s being given a set of $50 pajamas as the kindly couple cooks up a midnight omelet while all are having a chat and a laugh, and since he has to wear the same clothes tomorrow, they are in the wash.

Unlike the 1820s, information moved just a bit too fast for David to take this very far or long. He was found guilty of fraud, owing restitution of more than $4,000, and being sent to prison.

In 1990, this story was released as a play called Six Degrees of Separation, for which Will Smith played the lead in the 1993 film of the same name.

The theatrical releases brought forth more attention to David. He gave interviews and then began harassing playwright John Guare. Guare filed for a restraining order, which was denied. David sued for infringement on his own copyright, and the lawsuit was dismissed.

It was as though no one wanted anything to do with this anymore.

David Hampton passed away in 2003.

This is the IRS! Send us Gift Cards!

Pro Tip: If you get a legitimate phone call from the IRS, it’s because you’ve received mail from them proposing a day and time to talk.

This scam is a simple one. You get a phone call from “The IRS” and you are going to go to jail. The cops are already on their way! You can save yourself by paying now, or promising to get Visa gift cards to send them.

Does this work? Yes. About $30,000,000 has been scammed in this way. Why does it work? Because the IRS has been made into such a boogeyman in American society.

How can you prevent this from happening to you? If you get a call from the IRS, you can ask for their number so you can call them back. Some IRS employees do not have direct lines for you to call, but they can receive a fax, which you can google to see if it’s a line associated with the IRS. You can also ask an IRS employee which tax period and tax document they are calling about, and they’ll be able to provide an answer.

These scammers are counting on you panicking – to feel desperate so that you do something stupid, but in the age of information, you need to take a breath and keep them on the line. A scammer will hang up if you ask questions. IRS employees will answer every question you have to help you understand what the issue is.

 

Gregor McGregor leveraged people’s belief in him as a successful person, which he was. He truly did have access to a large amount of land, and could rightly royal-ify himself and others. He also tapped into their desire to be be titled.

David Hampton found that by pretending to be linked to a celebrity he would be treated not just with dignity, but love and care. In an age when people couldn’t google the phrase Sydney Portier’s son, he was able to take this down a luxurious boulevard.

As for the horrible people pulling IRS and similar scams, they are leveraging fear and ignorance to separate you from your money. But this is the United States, and due process is still a thing for the moment, so if you get a call from the IRS, you should want to talk to them. A real IRS employee will stay on the line with you; a scammer will not.

 

SOURCES & FURTHER READING

Anders, S. B. (2020). “IRS Tax Identity Theft and Fraud Resources.” The CPA Journal, 90(12/1), 74-75.

Bidgoli, M., & Grossklags, J. (2017, April). “Hello. This is the IRS calling: A case study on scams, extortion, impersonation, and phone spoofing.” 2017 APWG Symposium on Electronic Crime Research (eCrime) (pp. 57-69). IEEE.

Clavel, D. What’s in a Fraud? The Many Worlds of Gregor MacGregor, 1817–1824. Enterprise & Society. 2021;22(4):997-1036. doi:10.1017/eso.2020.25

DeLiema, M., and Witt, P. 2021. “Mixed Methods Analysis of Consumer Fraud Reports of the Social Security Administration Impostor Scam.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC) Working Paper; MRDRC WP 2021-434. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp434.pdf

Hasbrouck, A. (1927). Gregor McGregor and the Colonization of Poyais, between 1820 and 1824. The Hispanic American Historical Review, 7(4), 438–459. https://doi.org/10.2307/2505996

Konnikova, M. “The Conman Who Pulled off History’s Most Audacious Scam.” BBC. Jan. 27, 2016. https://www.bbc.com/future/article/20160127-the-conman-who-pulled-off-historys-most-audacious-scam

Laris, M. (2023). Senator presses IRS on scam victims being hit with big tax bills. The Washington Post, NA-NA.

Román, D. (1993). Fierce Love and fierce response: Intervening in the cultural politics of race, sexuality, and AIDS. Journal of homosexuality, 26(2-3), 195-220.

Slethaug, G. E. (2002). “Chaotics and Many Degrees of Freedom in John Guare’s Six Degrees of Separation.” American Drama, 11(1), 73.

Sloan, A.S. (2019). “That Black Abundance.” American Book Review 40(3), 5-6. https://doi.org/10.1353/abr.2019.0027.

USA.gov. “Imposter Scams.” n.d. https://www.usa.gov/imposter-scams