‘Empire of Deception’ con man rivals Ponzi

You have heard of Charles Ponzi, the swindler who gave big returns to early investors using money from subsequent clients. And you have heard of Bernie Madoff, imprisoned for one of the biggest Ponzi schemes in history.

Chances are you have never heard of Leo Koretz. A new book, “Empire of Deception,’’ argues that Koretz belongs with Ponzi and Madoff in the con man hall of fame.

Koretz’s pyramid scheme, played out against a backdrop of crime and corruption in booming 1920s Chicago, eventually results in millions of dollars invested in a phony agriculture and oil project on Panama’s Bayano River. Early clients were paid high interest using money from the next wave of victims, which whetted their appetite for more and stoked Koretz’s reputation.

Koretz excelled at hooking victims, increasing their eagerness by first turning them away. When investors traveled to Panama to check out the project, Koretz vanished, leaving behind stunned relatives and embarrassed clients - many of them wealthy, despite their losses, and reluctant to acknowledge that they had been scammed.

Here the story gets even more entertaining. Koretz flees to New York, then to a Nova Scotia resort, where he resumes his lavish lifestyle under a false name and is unmasked by an incredibly mundane detail: a jacket with his real name inside.

A con man to the end, he manages to cheat the public of any sense that justice was served. He pleads guilty, avoids trial and gets a sentence that offers parole in a mere 11 months. Severely diabetic, he dies in prison within two months, with some saying he induced his death through diet.

Author Dean Jobb has fun mining the details of the case from the era’s sensationalistic newspapers. Readers may wish for more insight into Koretz’s intentions, but there is not a lot to go on, other than the author’s speculation that Koretz’s boyhood immigration experience might have shown “how easily a shrewd operator could relieve people of their money.’’

AP

“Empire of Deception’’

Author: Dean Jobb

Publisher: Algonquin Books

Genre: Crime