The higher the stakes, the bigger the lie. Our history is rich with stories of how scammers, respected professionals, and governments have lied to achieve their ambitions or protect their stakes. And the stories and motivation behind such monumental lies are always exciting to read. Here is a behind-the-scenes peek behind the 10 biggest lies ever told in history.
1. Charles Ponzi’s promise of 50% return in 90 days
Charles Ponzi convinced people that his scheme of arbitrating postal coupons could give them a 50% return in 90 days. People bought his lie and Ponzi began making money as much as $250,000 a day. The scheme ran for almost a year when a panic run, created by a report of the bank attorney of Massachusetts Bank, crashed the pyramid scheme and exposed that Ponzi was actually “robbing Peter to pay Paul.”
After attempting a series of frauds and serving imprisonment in Canada and the US, Charles Ponzi devised the most notorious financial scam in all of history. While running his small office in Boston, he came up with an idea of how to profit 400% through arbitrage of postal stamps.
At the time, a person in one country could send an IRC (international reply coupon) to a correspondent in another country. He could redeem the coupon to pay for the postage of a reply.
As the IRCs were priced at the rate of postage in the country of purchase, Charles Ponzi saw a potential for theoretical profit if the cost of postage was lower in the country where redeemed.
He sold this idea to the public and promised them to double their investment in 90 days.
People began to invest, and this prompted Ponzi to set up his own company in January 1920 named the Securities Exchange Company. Eighteen people invested in the first month, and they were paid the very next month with the money collected from a newer set of investors.
This series of investments snowballed into a frenzy where at its peak, 75% of Boston’s police force had put their money in the scheme. Even though capital kept pouring in, Ponzi didn’t find a way to use the money and generate profit.
He had also realized that the IRC scheme was impractical. Shipping such a huge amount of postal coupons was logistically impossible. So, he continued paying old investors with money brought in by new investors.
Though the scheme received some suspicion from the media and a few lawsuits were filed, it didn’t have much impact on Ponzi’s business.
But then one such story in the Washinton Post by William McMasters caused a panic run, and the pay-off exhausted his reserves.
This caused Massachusetts Bank Commissioner Joseph Allen to investigate the matter and found that the Hannover Trust had loaned $250,000 to Ponzi, a testimony that he was not as well-financed as he pretended to be.
2. Smoking is not bad for you
Up until the mid-50s, tobacco companies sponsored studies and research and solicited doctors to lie about their brands, making them appear less harmful than their competitors. The addictive strength of tobacco was played down and compared to that of tea and Twinkies. Even after studies established a link between lung cancer and smoking, they continued to lie, maintaining that the findings were inconclusive.
There was a time in history when doctors approved of smoking, most smoked themselves and were featured in ads.
Brands competed to make their brand appear less irritating for the throat without any strong grounds. For this, they sponsored studies that concluded that their cigarettes didn’t have any side effects.
In 1994, James W. Johnston of R.J. Reynolds made a claim at a congressional committee, “Cigarette smoking is no more ‘addictive’ than coffee, tea, or Twinkies.”
The lies continued even after the mid-’50s when doctors established a link between lung cancer and smoking.
Doctors moved away from promoting cigarettes, but tobacco companies adamantly denied that smoking caused cancer until 1988 when a lawsuit settlement resulted in the dismantling of the Committee for Tobacco Research. (Source)
3. Piltdown Man: the missing link in the theory of evolution
On December 18, 1912, Charles Dawson presented the skull of Eoanthropus dawsoni, a missing link between humans and apes in the theory of evolution. Though some raised questions on the method of reconstruction, the Piltdown Man was accepted as a fact in science. Four decades later, scientists proved that the Piltdown Man was a deliberate fraud crafted by Charles Dawson.
In 1912, Charles Dawson along with Arthur Smith Woodward excavated fossil fragments of a human skull: jaws, skull, and molars. After reconstructing the fragments, they declared to the Geological Society that they have discovered the missing ape-man in Darwin’s theory of evolution: Eoanthropus dawsoni.
The fossil had the skull of a man and the jaws of an ape, asserting the erroneous theory of the time that the jaw evolved after the evolution of the human brain.
Though some questioned the method of the reconstruction, the Piltdown fossil was hard to access, hindering other researchers from studying it.
Finally, a study published in 1953 did conclude that Eoanthropus dawsoni was a fraud and earlier doubts about the reconstruction were true. However, there was no resolution on the identity of the perpetrator.
Eventually, in 2016 studies by Russel and Degroote the blame was laid on Dawson revealing the modus operandi: samples being stained with a brown color and cracks being filled with gravel and sealed off with dentist putty. (1, 2)
4. Berlin Wall started with a lie
Just two months before the construction of the Berlin Wall began, the former leader of East Germany, Walter Ulbricht, told the famous lie of the decade: “Nobody has any intention of building a wall.”
Sixty years ago, East Berlin was planning to create a free city, and rumors had spread that this would require the city to build a wall to close its border.
When Walter Ulbricht was asked about it at a press conference in July 1961, he lied with a straight face that there were no plans to build a wall.
But two months later, the construction of the wall began that would eventually run 150 km, separating families and dividing the country for decades. (Source)
5. Chernobyl denial
In the aftermath of the Chernobyl disaster, the Soviet government lied to the world to cover up the disaster, delayed the evacuation process, and offered a sanitized version of the damage. Neighboring countries were exposed to radioactive fallout unguarded as the Soviet government deliberately hid the meltdown from the world.
The explosion occurred at nuclear reactor No. 4 of the Chernobyl Nuclear Plant in Ukraine. It took 18 hours for authorities to accept that a meltdown had occurred, spreading radioactivity in the atmosphere.
Following two more explosions, Pripyat, the town that housed nuclear plant workers, was exposed to the radioactivity of about 320-330 micro-roentgen per second.
But the Soviet government was reluctant to accept the extent of the catastrophe and went on to cut off telephone networks to stop the spread of news. Workers at the plant were prohibited to talk about the incident with family and friends.
But as radiation readings went higher, the order to evacuate finally came to the relief of the people, but only after 36 crucial hours.
Surrounding countries were not informed of the danger of radioactive fallout looming over them. Scientists in Sweden detected radioactive fallout themselves instead of being informed by the Soviet Union.
Investigations over the years have revealed that the Soviet government lied to cover up the disaster, delayed the evacuation process, and offered a sanitized version of the damage. Thousands have died due to radiation-related illnesses.
Also read: 10 of the Most Notorious Traitors in History