The Sale of the Roman Empire

One of the earliest financial crimes/ fraud case on record occurred in the Roman Empire during A.D 193. In this particular situation Marcus Didius Severus Julianus ( yes I know a mouthful), actually bought the Roman empire from the Praetorian Guard after the previous emperor (Pertinax) had been assassinated by that same said guard. Julianus was an opportunist and saw this as the perfect way to secure the position with out in blood shed. Julianus was born into a prominent and powerful family and was raised in the house of Marcus Aurelius’s mother which granted him both mother and sons favor.

Julianus swiftly rose through the ranks and gained power in favor. He was give command of Legio Xll Primigenia in Germania, received governorship of Belgica, Dalmatia, and Germania Superior. He also at some point was given the position of praefectus alimentorum in Italy which is basically someone responsible for taking care of grant money and welfare to the poor citizens of Italy. In each of these leadership roles he rose to expectations and was respected and admired by his peer except when he briefly fell out of favor with emperor Commodus (Julianus was suspected of planning an assignation attempt on Commodus’s life). Julianus eventually became close friends with Pertinax who was to be the future emperor and his predecessor. Commodus was assassinated and Pertinax was appointed by Senate to be the new ruler of Rome.

Unfortunately for Pertinax hes had gartnered no loyalty among the Praetorian Guard ( which was suppose to be the emperor’s loyal personal army) and three months in to his new job he was quickly assassinated by the same guard that was sworn to protect him. With the emperor position void of a leader the Praetorian Guard saw this a wonderful opportunity to enrich their pockets and fill the position as well. Julianus being as ambitious as he was bought the empire for 250 gold pieces for every member of the guard or basically the equivalent of one billion dollars in today’s money. Whether the transaction went through is still speculation however the guard knowingly sold an empire they not only did not own but also sold a position that that wasn’t theirs to appoint. Because of this Julianus was not able to settle and relax into his new lofty position for very long. Once the senate confirmed him as a legitimate successor other aristocratic members were none too supportive and the people, once they heard the news of the purchase, became hostile to the rule.

Following the people’s lead the governor’s of Syria, Great Britain, and Pannonia openly revolted and marched with their troops to reclaim Rome from Julianus. Julianus for all his efforts tried to bargain with them and even executed two suspects who were possibly behind Pertinax’s death but they were not swayed. The Praetorian Guard, ever fickle, knew that they were in a precarious position especially after being responsible for killing the previous emperor. In exchange for safety they betrayed Julianus and turned him over to be sentenced to death. His one billion dollar purchase only gave him sixty six days of ruling.

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The Mississippi Scheme

The Mississippi Bubble like other financial crimes and frauds all started with misrepresentation. John Law was a financial adviser and president of a company called “Compagnie des Indes” or better know as Company of the Indies. At the time France was looking for ways to decrease their debt and boost their economy. In 1715 the french government was in dire financial straits and near the possibility of outright insolvency. Unfortunately during that time their king was only five years old (King Louis XV) and so his advisers and regents took it into their own hands to find a solution for the impending problem. And in 1716 they had thought they had found a solution in John Law who had studied high finance in Genoa, Venice and Amsterdam. He had also wrote a paper to argue for the use of paper currency instead of using currency linked to precious metals like gold and silver. With academic credibility John Law quickly given the reins and was allow to start a national bank in France called Banque Générale which would issue paper notes in exchange for any gold or silver given to them. Though the notes weren’t technically considered legal tender they were able to be exchanged for french currency. After starting the national bank, John Law then bought the Mississippi Company which he renamed to Company of the west and then eventually renamed to Company of the Indies. After acquiring this purchase he also managed to get a monopoly on trade and develop on any of France’s colonies along the Mississippi River in America. Over time John Law and his company started to accumulate more power and influence with the French government (perhaps more than they needed to have). He was given the ability to mint new coins in 1719, the company was given the ability to collect indirect and direct taxes in August of 1719 and October of 1719 respectively. Where the French government sowed their downfall was by agreeing to allow the rest of the country’s debt to be exchanged for shares in the company. The people of France were misled in the value of the company of the Indies and were under the incorrect perception that the French colonies were full of precious metals and beaver skins that were waiting to mined and harvested to enrich their pockets. As a result shares in the company jumped from 500 livres ( livres was the old currency used at the time) to 10,000 livres in a matter of months creating millionaires over night and causing record high inflation. But like a fragile house of cards, as fast as it rose is just as fast as it crashed. When some of the newly rich investors tried to cash in their shares the national bank did not have enough precious metals in exchange for notes and worst yet the news of no precious metals being found hit and quickly sank the bank notes and stocks. In fear of his safety and being seen as a fraudster for his failed monetary policy, John Law managed to escape France by dressing up as a women and while he escaped jail time he lived the rest of his life as a poor gambler and disgraced financial adviser. This post has been sponsored by Greenville Window Cleaning. If you would like to check them out their link is here:

The Diamond Necklace Hoax

This particular financial crime is little bit different and unique than the typical scams and fraud cases. Normally when someone misrepresents themselves during our time period they hide behind a computer screen or if they meet the victim in person they give a factious name and hide their true identity. In the diamond necklace hoax that occurred in France in 1784, the victim had already met the real person that was being impersonated. It also started with Cardinal Rohan widely known as the Almoner of France and formerly a member of Queen Marie-Antoinette’s inner circle. He had the misfortune of falling out of the queen’s favor because of his promiscuous and unprincipled sexual behavior. In hopes of regaining the queen’s trust and favor, Rohan ended up consulting with Countess of La Motte who managed to convince him that she was close with the Queen and that she would be able to mend their frayed relationship. Unbeknownst to Cardinal Rohan, the Countess was a fraudster and sought to manipulate Rohan to her ends. She told Rohan to meet her at night in the Queens Grove and that she would bring Marie there to speak with him. Rohan came to the night meeting and the Countess cleverly hired a prostitute and disguised her at Queen Marie-Antoinette. Because the meeting occurred at night the Countess was able to take advantage of the shadows in the garden to veal the prostitute and prevent Rohan from realizing it wasn’t the Queen. After the meeting Cardinal Rohan left with the assurance that he was fully back in the Queen’s good graces. The Countess however didn’t stop there as she had her sights on a particularly expensive diamond necklace that was worth 1.6 million Livres during that time period. Taking advantage of Rohan’s eager to please nature, she convinced him to buy the necklace on credit for the fake Marie-Antoinette as a gift. He was to pay off the diamond necklace within a two year period and make four separate installments. After handing over the diamond necklace to the Countess, like a true con artist, she promptly disappeared with her crew. The jewelers who sold the piece however started to wonder when they did not receive full payment and approached the queen’s staff about the matter who immediately informed Marie-Antoinette. During a convocation the queen, unaware of the full story, had Rohan arrested which prompted it to become a public scandal. Fortunately for him the Parlement de Paris found him faultless after he explained his story and he was declared innocent and released. The Countess however was apprehended and sentenced to be branded with the letter V for Voleuse, which means thief in French. While the perpetrator was captured and judged for their crimes, the queen took a publicity hit over the incident and her reputation with the French populace was damaged. Cardinal Rohan relationship with the Queen also never recovered. This content is sponsored generously by the Greenville Mobile Detailers. If you would like to check them out just click the link.