Archive for April 14th, 2015

From Poyais To Andorra: A Tradition Of Venezuelan Fraud

April 14, 2015

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Meet Gregor MacGregor, a Scottish military officer, adventurer and hero of Venezuela’s Independence War, who joined the fight against Spain in 1811 and quickly became a general of the Venezuelan Army by 1812, marrying a cousin of Simón Bolívar. Later MacGregor fought in Colombia, the Caribbean and Central America. In 1820 MacGregor was named to the Constituent Congress in Cucuta, but rather than go there, he went to attack the Spanish city of Portobelo in Panama, failing in the attempt. From there, MacGregor went to Nicaragua, where he met the Poyais (Payas in Spanish) indians and signed with them a treaty to colonize their territory.

And here is where his life became interesting and he pioneered the now long tradition of fraud related to Venezuela: MacGregor moved to Great Britain in 1820 and claimed to be the Cacique and Prince of Poyais, a country that did not even exist. The country was supposedly located in the Bay of Honduras and reportedly King Frederic Augustus I of the Mosquito Shore and Nation had bestowed the land to him. In reality, the land supposedly bestowed on him by King Frederic had been plied away from him with alcohol and consisted of four run down buildings, which were surrounded by swamps and there were no riches whatsoever.

But MacGregor convinced everyone that his fake country of Poyais was full of riches.To help his cause, he had a book Published called “Sketch of the Mosquito Shore, including the Territory of Poyais”, which you can read in google archives, supposedly written by a certain Captain Thomas Strangeways. The book described the wonderful and rich country of Poyais, rich in metals, wood, indigo, animals, trees, offering the enterprising European a unique opportunity for investment and work. The book claimed remarkable opportunities that could turn an investment of 150 pounds into 1,000 in one year or recoup your investment in a coffee plantation in only five years.

And then came the first scam, the issuance of bank notes by the Bank of Poyais, offering to pay “one hard dollar after sight”

Poyais-bond-scam2

in the option of the Government of Poyais. He also sold land at one schilling per acre in cash, sold in perfectly square plots of 540 acres.

But being the true pioneer that he was, MacGregor issued bonds in the amount of 200,000 pounds. The bonds were reportedly sold at 80% of its face value at a rate which some sources claim was 3%, while others say 6%. But this graph of the evolution of the price of the bonds clearly indicates 3% bonds:

PDF-2MacGregor was so daring, that he even sent seven boats of settlers to Poyais, knowing that he would be found out for sure. When the few settlers that survived came back in 1823, London papers reported the fraud and MacGregor fled to France.

And in France he simply started again, reportedly raising another 1.1 million pounds in new money. He was briefly jailed in France, but acquitted. MacGregor did not even try to pay any of the investors, he simply pocketed the money and eventually moved to the French countryside to enjoy life, while continuing to try to peddle land in the country of Poyais.

By 1838 MacGregor had ran out of funds and returned to Venezuela, where he asked for a pension, the Venezuela nationality and his old military position and rank. He was reinstated as Division General and was eventually buried with honors in the Panteon Nacional along with Simón Bolívar

As with so many other Venezuelan crooks and fraudsters, MacGregor suffered no moral punishment from Venezuela, welcomed back with open arms and buried with honors. Thus was born a tradition that has continued from Poyais to Andorra and from the time of our war of Independence to that of Chavismo.

Added: A reader sends this picture of a certificate for a Puyaisian land grant

MacGregor

Hat Tip for idea : Eduardo