Flim Flam: Canada's Greatest Frauds, Scams, and Con Artists

By Mark Bourrie

Flim Flam explores the world of Canadian white-collar crime, a place inhabited by hustlers, wild gamblers, and crazy dreamers. It takes the reader to the Vancouver Stock Exchange, where dream salesmen have peddled wild stories of easy money, through the "moose pasture" scams of northern Canada, to the con artists who have been drawn to Toronto’s financial district. Along the way, you’ll meet crooked politicians, a young con man who confessed to a church congregation after he was "born again," disbarred lawyers, and the creator of a huge paper fortune who was left with nothing but a wolfskin coat when his real estate empire fell apart.

Greed is a powerful motivator that has taken some Canadians down strange roads. Some have ended up pocketing millions, but many more of Canada’s con artists have self-destructed, taking with them the fortunes of the people they bilked. In the end, they’ve usually fooled themselves, too.

Flim Flam shows that Canadians aren’t nearly as dull as we’d like to believe. When it comes to conning each other, we have some of the most colourful and interesting hucksters in the world. This book contains stories from all regions of the country. It will appeal to business and true-crime readers, as well as people who are students of human nature.

• Language: English
• Publisher: Dundurn
• Release date: Oct 1, 1998
• ISBN: 9781459713147

Mark Bourrie

Mark Bourrie is an Ottawa-based author, lawyer, and journalist. He holds a master’s in journalism from Carleton University and a PhD in history from the University of Ottawa. In 2017, he was awarded a Juris Doctor degree and was called to the bar in 2018. He has won numerous awards for his journalism, including a National Magazine Award, and received the RBC Charles Taylor Prize in 2020 for his book Bush Runner: The Adventures of Pierre-Esprit Radisson. His most recent book, Big Men Fear Me: The Fast Life and Quick Death of Canada’s Most Powerful Media Mogul, was nominated for several book awards.

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Clothing

INTRODUCTION

It’s a bit of a stretch, but not much of one, to say that Canada was created by crooks and scammers. In the early 1600s, when French traders left the St. Lawrence Valley for the country of the Algonquians and the Hurons, they carried with them second-rate trinkets to use to fleece the natives of their furs. They traded cheap glass beads — rejects and seconds from the factories of Venice — that were flat on one side, oddly shaped, or chipped. The guns they sold were so shoddy that they couldn’t hit objects more than a few metres away, and they often misfired, blew up, or broke down. The blades of their cast-iron axes broke off, and their wrought-iron axes, hammered on blacksmiths’ forges, had seams running to the tips of blades which often peeled like bananas, or, when they didn’t break, couldn’t hold an edge.

The administrators of the fur trade had a virtual lock on power in the colony. Anyone who challenged their power by going into business for oneself was quickly ruined. When Radisson and Grosilliers headed into the wilderness in an entrepreneurial search for new fur sources, they were financially ruined by the monopolists who ran New France; in a simmering rage, the two took their secrets to the British, who profited quite well by forming the Hudson’s Bay Company.

Crookedness extended into the government of New France, especially in the pivotal years of the Seven Years’ War, from 1756 to the fall of Quebec in 1760. François Bigot, the intendant (a type of colonial chief administrator), organized a clique of war profiteers who bled the colony during the darkest times of the conflict. Bigot had help from both Joseph Descheneaux, a clerk who had been raised in the colony and knew how to claw the most out of its inhabitants, and from Joseph Cadet, a businessman who gained control of the wheat and flour market in Quebec. Bigot was able to simultaneously cheat the army out of a fortune and ruin most of the local business owners, whose wives he spent nights with when not engaged in thievery.

Early in the war, the wheat crop failed. Rather than pose a problem for Bigot, it turned out to be an opportunity. He was able to import grain into the Quebec City region, had control of the only grist mill that was licensed to grind it, and sold the bread in a store that he owned. The colonists, despite their rage, had no choice but to pay Bigot what he wanted.

Bigot had a branch operation in Montreal, but the city had its own clique of profiteers. While Bigot was grabbing control of the food supply, the Montreal coterie seized exclusive licences over the inland fur trade. They stole permits that had been granted to pensioned-off military officers and to widows, leaving them destitute. The Marquis de Montcalm, an honest soldier, had struggled against Bigot and his cronies, but failed to overcome their grip on the colony; their scams probably cost Montcalm victory in the war.

In the end, Bigot and his friends were shipped back to France, where a few were fined and spent time in jail. But the anger at the colonial regime took years to subside. In 1775, French rule could have been reestablished if the habitants had supported the American invasion of Quebec; the two American generals, Benedict Arnold and Richard Montgomery, were counting on an uprising, but the people of Quebec sided with the British, and Montgomery ended up dead for his efforts. The peasants of the colony, bristling at their treatment at the hands of the regime, had chosen to sit on their hands through most of the war’s major engagements, and when Wolfe’s army took Quebec in 1759, and Jeffrey Amherst captured Montreal a year later, the few habitants who had fought alongside the regular army quickly drifted back to their farms, and embraced, or at least tolerated, British rule.

British administrators, by and large, refrained from direct looting of the treasury, but they developed a patronage system that was very beneficial to their friends. Once the original Native inhabitants of the countryside had been cleared away, scammers with connections to the political elite were able to get their hands on vast areas of land. After selling off the farmland, the fast-money men began milking the government for cash to build infrastructure. Some of the grants were for canals to nowhere that still breed mosquitoes in the Ottawa Valley and south of Lake Simcoe. Other tracts of land, along with cash and government bonds, went to the builders of railways. By the 1850s, railway builders had bled most of the municipalities of southern Ontario to build lines to places few people wanted to go to. Two decades later, after railroad companies had nudged four colonies of British North America into Confederation, the taxpayers of Canada could no longer handle the debt load built up by the railway entrepreneurs. Entire counties went bust, and Canada Bonds became a synonym for junk securities in the London money market.

And it didn’t get much better as the country matured. Sir John A. Macdonald was driven out of office for taking bribes from the builders of the Canadian Pacific Railway. It says something about Canadian voters that, at the first opportunity, they put him back in office. By the end of the century, more white-elephant lines were built across the country, and by 1919, they would be merged into the Canadian National Railway, which would bilk taxpayers for another three quarters of a century.

Close behind the railway builders were the land speculators, mine stock hustlers, and an assortment of other hustlers who followed the frontier. The Cariboo Gold Rush, the Klondike, and dozens of long-forgotten mini-rushes in places such as Quebec’s Eastern Townships added fuel to the public’s belief that there were easy riches all over the country. Some mine promoters actually found gold. Many more didn’t.

By the early years of this century, modern Canadian scammery had begun to take shape. New Canadian stock markets became the headquarters for stock hustlers and boiler-room operators who peddled junk securities to gullible investors — usually older people and lower-middle-class citizens who saw the markets as a legal lottery. Through the 1920s, Canadians were drawn into the same market boom that preceded the 1929 Wall Street crash.

Some hustlers tried selling other bizarre securities. I have a box of German hyper-inflation bank bonds from the 1920s, which are worth, on paper, trillions of marks. They’re souvenirs of a Depression scam in Ontario in which con men bilked solid citizens, including some of my relatives, out of their savings by selling the bonds with the promise that some day the German government would make good on them. The bonds might make for interesting wallpaper now. So would the moose pasture gold mining stock that so many people bought in the 1950s, egged on by the federal government’s pro-mining policies and John Diefenbaker’s unkept promise of roads to resources.

Today, small armies of scammers and semi-legitimate hustlers continue to harrass and fleece people. As I was writing this, someone came to my door demanding — not asking, but demanding — that I hand over my gas bill so that he could ensure a reliable supply of natural gas and protect me from price increases. The officious man, complete with clipboard, identification tag, and all sorts of other important-looking gewgaws, wanted to sign me up to a new gas company. Someone came by last week collecting money for child literacy, leaving me to wonder if all the schools had been closed, or if we had reached the inevitable point when education money would be raised by canvassers. And someone just called me now for the umpteenth time to try to get me to join a shopping club.

I’ve been lucky, though. I never bought Bre-X or gave my money to Albert Walker to invest, nor have I been ripped off by my old pal, the Born Again Bandit, a guy in Barrie who was turned in by his fellow religionists after asking their forgiveness for a $1-million scam. I never was claim-jumped by Harry Oakes, and never bought Windfall stock out of the trunk of Viola MacMillan. No one on the Vancouver Stock Exchange has fleeced me, I haven’t had any money in a failed trust company, and no one has been able to talk me into trying to rob the Mint.

After spending two decades writing about politicians and murderers, a spell with Canada’s more interesting thieves has been a refreshing interlude for me. I apologize if I seem flippant, if I don’t show much sympathy towards the victims. In some cases, they deserve more pity than I have given them, but there’s a touch of the crook, as well as of the pigeon, in all of us. People get caught in stock scams because they believe they have inside information that others don’t have access to. The Bre-X investors who went down with the ship knew very well that the company was trying to buy off the crooks that run Indonesia. Ronald Platt ended up dead in the English Channel, his now-famous Rolex on his swaying arm, because he believed Albert Walker, an obvious crook, would keep paying Platt to use his identity.

The people who gave money to small-town chiseller Bill Player for his real estate scams in the 1980s (which ended up costing taxpayers millions when Player tried to buy up 10 percent of the apartments in Toronto) or to Walker for his investments were prepared to accept large payoffs from no-questions-asked ventures. Most scams would be impossible to pull if the victims weren’t amoral enough to be conned into believing that they were actually part of a plan that gave them an unfair advantage at the expense of others. Insider trading is illegal, but people will always jump at the chance to do it, and hustlers play on that.

Insider politics is built on the same morality. So are the silly books that tell people how to pick winning lottery numbers and win at blackjack. People phone fake psychics to get lucky lottery numbers (leaving me to wonder why the psychics don’t buy the tickets themselves, or play the ponies). As long as people are willing to believe in free money, the con artist will prosper.

What leaves me perplexed is the fact that so much of our business culture is based on inside tips and something-for-nothing greed. Instead of business ethics being regarded as something, ideally, to strive for, they’re often seen as something one simply has to grudgingly put up with. So it is obedience with obedience to the Ten Commandments. Many people these days will settle for keeping seven or eight of them, and few among us make graven images. But Canadians believe they’re honest, bland people, no matter how much the record shows that many of us are neither.

Every time there’s a big scam, a few people go broke, even fewer go to jail, and, if the government feels the heat, there’s an inquiry or Royal Commission that drags on until people are thoroughly tired of the whole thing, or until another big scam story comes along. I’ve talked with four authors of books on Bre-X, and one thing they all agree on is that there is absolutely nothing that would stop people from pulling exactly the same scam today. The reports and investigations that came down after Bre-X have been shelved, or, at best, only their less controversial recommendations have been adopted. Still, investors wait for the next good story that will send a dime stock to $180. Canadian officials don’t like the image that Bay Street and Vancouver are getting abroad, even if it is the truth. But, it seems, the burden of that reputation is something they are prepared to bear.

THE STRANGE DEMISE OF CLAIM JUMPER HARRY

On Friday, July 8, 1943, hundreds of workers on the tiny Bahamian island of New Providence were idle. They stopped work at the largest hotel in Nassau, the country’s capital. They laid down their tools on thousands of acres of farms and in most of the island’s little factories. It was a strange way to mark the brutal demise of Sir Harry Oakes, their employer. He wouldn’t have liked the work stoppage one bit, since he had spent his entire life in a whirlwind of work.

Harry Oakes was one of the toughest men ever to walk out of the Canadian bush. By the time he was 40, he had clawed a living on the frontiers of four continents and had found three gold mines. He had pried the gold from the ground by being mean enough to jump the claims of other prospectors. Harry Oakes was a man who went through life making enemies, and he didn’t care whose toes got sore along the way. It was a character trait that eventually proved fatal. Oakes’ death is still shrouded in mystery, but a glance at his life leaves you wondering how he managed to live so long.

Oakes’ family had deep roots in the Maine countryside. There seems to be no traumatic poverty in his boyhood, no strange family circumstances that would turn him into a loner and a miser. Harry didn’t drop out of school to run away and make his fortune. After spending his elementary and high school years in a tiny private institution, Oakes graduated in 1897 with a Bachelor of Arts from Bowdoin College, one of the better universities in New England.

Then, instead of settling down to run a business or work at a profession, Oakes decided to head to the world’s most isolated places to try to find a gold mine. What’s surprising is the reaction of the Oakes family. His mother gave him the fare to get to Seattle. Harry’s brother Louis scraped together $75 a month from his lumber