Therese Ember: The Greatest 19th Century Financial Scam

At the heart of the financial pyramid there is always a legend about how high returns are provided. Theresa Amber, French by origin, was a real master of it. Teresa made up a story — how appearing on a train with a millionaire R. Crawford, she saved his life, not letting him die of a heart attack. As gratitude, he allegedly left her fortune of 100 million francs …

Theresa Amber1

According to Theresa’s legend, an elderly millionaire, her travel companion, left her fortune of 100 million francs.

But she could not get it until her younger sister got married to one of the Crawford’s sons. her friends, who helped gather 6 million francs of dowry required in the will, believed in this story. They were sure that the will was in her safe. However, this sum turned out to be insufficient for Teresa, and in 1893 she decided to set up Rente Viagere bank. It promised customers the highest interest on deposits, and soon both small investors and real tycoons brought their money to Teresa.

She moved to Paris with her husband and bought an elaborate house in Avenue de la Grande Armée. Humbert gathered lots of influence, fame and wealth. Her salon became a center of socializing. Humbert and her associates, other members of the Humbert family, borrowed money against the nonexistent inheritance. They lived in luxury for about 20 years, spending their money on flowers, elaborate dresses and banquets. Eventually they had to borrow more money to cover the previous loans. There were suspicions, but nobody was able to prove the story false.

Theresa Amber2

Madame Humbert and her counsel, Feb. 1903

Theresa Amber’s Bank did not invest funds but just accumulated them, and sometimes distributed as dividends. Jules Bizat, one of the bank executives asked Teresa how she controlled investments. she said she bought government bonds. But Bizat, got convinced that Teresa was lying. He reported his suspicions to the Prime Minister of France Pierre Waldeck-Rousseau.

By that time Rente Viagere Bank had become one of the largest banks in France, and the Waldeck-Rousseau started to act through the media, instructing The Matin newspaper to investigate the case. It was found out that the bank had accumulated so much money that even the huge Amber’s fortune would not be enough to pay off the interest When the exposing materials were published in the Matin, Court demanded to show the contents of the safe and the will on May 8, 1902.

Teresa fled from Paris. Her safe was opened, and the contents were presented to the public: there was an Italian coin, old newspapers and a button. One of the largest financial frauds of the XIX century was disclosed. The news of this got spread throughout France. Only a few months later Teresa was found in Madrid. It was found out that the debt of her banks greatly exceeded 100 million francs at trial. Thousands of people had lost almost all their savings.

The Humberts had already fled the country, but they were arrested in Madrid in December 1902. Therese Humbert was tried and sentenced to five years’ hard labor. Her two brothers, who had masqueraded as Crawford’s nephews, were sentenced to two and three years each. Her husband Frederic was also sentenced to five years. Therese Humbert died in Chicago in 1918. People whom she had defrauded remained mostly silent to avoid further embarrassment.