The Fraudster's Guide to Magic Money

The Fraudster's Guide to Magic Money

Author: Pushkin Industries April 26, 2024 Duration: 1:00:19

Sam Israel had a problem. The investors in his hedge fund, Bayou Capital, were expecting spectacular returns. Sam himself had spent years proclaiming the fund's brilliant results. But in reality, Sam had been marking his own homework, publishing fraudulent accounts and using these to lure in new investors. 

What to do? Well, the logical thing of course: wait around for an extraordinary profitable streak, and in the meantime keep up the ruse...

This episode of Cautionary Tales was recorded live at the Bristol Festival of Economics and studies three incredible investment scams. How do pyramid and ponzi schemes snowball out of control, flattening victim and fraudster alike?

For a full list of sources, see the show notes at timharford.com.

See omnystudio.com/listener for privacy information.


There’s a reason we share scary stories-not just to entertain, but to learn. Cautionary Tales with Tim Harford applies that same instinct to the real world, digging into history’s most fascinating blunders and disasters to uncover what they can teach us today. Brought to you by Pushkin Industries, each episode feels like a masterfully told story, where Tim Harford-known for his work at the Financial Times, the BBC, and as author of “The Data Detective”-unpacks a single event. You’ll hear about catastrophic business decisions, scientific hubris, and public policy fiascos, all presented with a blend of narrative flair and sharp analysis. This isn’t just a history podcast; it’s a deep dive into human nature, decision-making, and the unexpected consequences that ripple from a single mistake. Listening feels like having a brilliantly insightful guide explain why things went so terribly, or hilariously, wrong. The stories are gripping on their own, but the real value lies in the lessons they make tangible for our own lives and choices. If you’ve ever wondered how a group of smart people could make a disastrous call, or how a seemingly small error snowballed into legend, this is the podcast for you. New episodes arrive every Friday, ready to transform a true tale of error into a lasting piece of wisdom.
Author: Language: en-us Episodes: 100

Cautionary Tales with Tim Harford
Podcast Episodes
The Thrill and the Drop: A First Date Rollercoaster [not-audio_url] [/not-audio_url]

Duration: 39:05
Leah Washington and her new boyfriend Joe Pugh are on their first day out together. They're at Alton Towers theme park, where they've chosen to ride the "Smiler" rollercoaster: a terrifying tangle of track that loops and…
Dr. Brinkley's Miracle Cure For Impotence (with Betwixt The Sheets) [not-audio_url] [/not-audio_url]

Duration: 38:25
Cautionary Conversation: In the 1920s, a conman convinced America that goat testicles were the secret to male virility. Tim Harford and Dr Kate Lister (Betwixt the Sheets: The History of Sex, Scandal & Society) dive into…
The Night of the Mugger [not-audio_url] [/not-audio_url]

Duration: 42:19
Winston Trew has just been arrested for mugging. It's 1972 and the crime has recently made its way to Britain from the United States. Dangerous thugs, replicating their American counterparts, have made the city of London…
Missing on "Dead Mountain": A Cold War Cold Case [not-audio_url] [/not-audio_url]

Duration: 46:14
In the bleak Russian winter of 1959, nine experienced hikers led by Igor Dyatlov set out on an expedition. None of them made it back alive. When their campsite was finally discovered, it told a chilling story: their tent…
Frozen in a Burning 747 (Tenerife Air Disaster 2) [not-audio_url] [/not-audio_url]

Duration: 36:35
Two airplanes have just collided on the runway at Tenerife Airport. While no one on the Amsterdam-bound KLM plane survives the resulting fireball, 71 Pan-Am passengers and crew make it off their plane. But could it have…
Cleared For Take-Off? (Tenerife Air Disaster 1) [not-audio_url] [/not-audio_url]

Duration: 32:36
“Evacuate the airport, we’ve planted bombs,” a terrorist tells the telephone operator at the airport in Gran Canaria, in 1977. By the end of that day, 583 people will have lost their lives – but not to a bomb explosion.T…
Do NOT Pass GO! (Classic) [not-audio_url] [/not-audio_url]

Duration: 35:58
Cautionary Tales returns with new episodes on January 10th. Lizzie J. Magie (played by Helena Bonham Carter) should be celebrated as the inventor of what would become Monopoly. But, even though she had a patent, her role…
Demonizing Dungeons & Dragons (Classic) [not-audio_url] [/not-audio_url]

Duration: 37:46
When James Dallas Egbert III was reported missing from his college dorm in 1979, one of America's most flamboyant private detectives was summoned to solve the case. "Dallas" faced the same problems as many teenagers, but…
Captain Coward and the Blame Game [not-audio_url] [/not-audio_url]

Duration: 36:51
Off the coast of an Italian island, an enormous cruise ship - seventeen floors high, three soccer pitches long - is tilting noticeably to one side. The local mayor is horrified: there are thousands of people on board the…
Get Happier, Help Others: Some Good Ideas About Giving [not-audio_url] [/not-audio_url]

Duration: 51:51
It's the season of giving: colorful paper and shiny bows, sure, and charitable giving, too. In this special episode, Jacob Goldstein, the host of What's Your Problem, gets smart about donating. Did you know that spending…