Empire of Deception

In his new book, Dean Jobb takes a look at the deceptive life of Leo Koretz, a master swindler.

With the US economy booming after the First World War, there were fortunes to be made. And Leo Koretz, a young lawyer in Chicago, was as eager as anyone. He and his family had left Bohemia and landed in the same neighbourhood as Oscar Mayer and Dr. Scholl.

Koretz was a bit too eager, however. He made millions selling stock in the Bayano River Syndicate, a nonexistent oil company he said he owned in Panama.

Dean Jobb, a journalism professor at the University of King’s College in Halifax, chronicles Koretz’s rise and fall in a meticulously researched book that reads like fiction while sticking to the facts. Empire of Deception takes us from his first scams selling fake mortgages and Arkansas rice fields through his high-living Oil King years, to his flight to Nova Scotia and ultimate demise in an Illinois prison.

It’s a vivid portrait of a master swindler. We come to know Koretz well and, disturbingly, admire how skilled he is at fleecing family, friends and acquaintances who want to get rich quick. The New Rockefeller, as he was known, promised returns as high as 60% a year and paid fat dividends from the money he took in from each new wave of investors. He excelled at deception, creating the illusion that he was fabulously wealthy. His suburban mansion, chauffeured Rolls-Royces, lavish parties and fashionable dress so convinced his targets that they threw money at him. Smooth-talking and charismatic, he always made his stock seem scarce, that he was doing buyers a favour by letting them in on the action.

Koretz was forced to leave his wife and children in Chicago when his “management team” decided to check things out in Panama. He eventually made it to Nova Scotia, where he bought a lodge near Caledonia, grew a beard and became Lou Keyte, a man of letters. Jobb gives a fascinating and detailed account of the province in the early 1920s, a place where the establishment played cricket and enjoyed afternoon tea.

The best page-turning tension comes in the months leading up to Koretz’s capture, as we learn what finally tripped him up. I won’t reveal it here, but let’s just say it was a devil of a detail.

Empire of Deception serves as a cautionary tale for today. Even though we have a more-developed set of rules and regulations, the scams keep coming. Remember Bernie Madoff?

Most of Koretz’s victims were successful professionals who should have known better but were blinded by the lure of easy money. One point that may be of interest to readers of this magazine: it seems that no accountants were taken in.