Gen. Gregor MacGregor’s greatest scheme

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  • Gregor MacGregor. WIKICOMMONS
    Gregor MacGregor. WIKICOMMONS
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Joshua Whitfield, Amelia Island Museum of History

General “Sir” Gregor MacGregor, “Liberator of the Floridas” and “Cazique of Poyais,” was the kind of person who felt like he was destined for greatness.

Born in Scotland in 1786, MacGregor, at the age of 16, joined the British Army at the start of the Napoleonic Wars. The following year, he married the wealthy Maria Bowater, who was related to several high-ranking military officers.

He served in Portugal for a time. His unit, “The Die-Hards,” would become well-known for their heroics in the Battle of Albuera. MacGregor would later claim that he received a knighthood from Portugal for his service there, but in reality, he had already been discharged from the army before the battle took place.

After the death of his wife, MacGregor lost his main source of income. Therefore, he decided to follow in the steps of other unemployed war veterans and became a mercenary for foreign governments.

MacGregor joined the republican revolutionaries in Venezuela’s War of Independence under the generals Simon Bolivar and Francisco de Miranda. Ironically, MacGregor is legitimately renowned for his actions in Venezuela. He also ingratiated himself with Bolivar’s family and married Bolivar’s niece, Josefa, in 1812.

In 1817, MacGregor decided to move on to greater things. He and his second wife traveled to the United States to raise men, ships, and money for an invasion of East Florida. In the summer of 1817, he succeeded in capturing Amelia Island in East Florida, but later abandoned it when the money began to dry up. While his brief attempt to exploit Amelia Island is locally famous, his most notorious scam might not be as well known.

After fleeing Fernandina, he would go on to “liberate” two other Spanish holdings in Panama and New Granada, only to encounter great failure on both occasions. After the New Granada campaign, in which his entire army was executed by Spanish Royalists, MacGregor’s supporters abandoned him. Simon Bolivar banned MacGregor from Gran Columbia and authorized his execution should he ever return.

It was during this low point that MacGregor hatched his greatest scheme.

In the 1820s, MacGregor returned to England with strange tidings: a new country had just emerged around the Mosquito Coast between British Honduras and Nicaragua, and it was looking for new settlers and investors.

It was a country called “Poyais,” and MacGregor had recently been named its “Cazique” or “chief leader.”

From all accounts, it was a paradise in the new world: rich soil for farming, a temperate climate for European settlers, a thriving mercantile community in the capital of St. Joseph (where most people spoke English), and plenty of land and cheap labor to go around.

MacGregor convinced London banks to back about £200K in Poyaian securities and bonds. The securities that he later traded with speculators would be worth over £1 billion in today’s currency. He used his funding to open a Poyaian embassy in London. 

He printed travel books on Poyais under a pseudonym, exchanged Poyaian currency for pounds sterling, and sold hundreds of plots of land in the new country.

He also arranged passage for hundreds of settlers to travel to this Latin American paradise.

In 1823, two ships bearing about 250 settlers embarked to Poyais. Many of these settlers were fellow Scots who were swayed by MacGregor’s promise of a new “Scottish Colony” in Poyais and a chance at a new life. But when they landed on the Mosquito Coast, they found an inhospitable jungle infested with mosquitoes.

At first, they assumed a mistake had been made; surely Poyais was somewhere farther along the coast and would send ships to rescue them. In the meantime, they stayed in the jungle for months. Then the rainy season hit, and malaria and yellow fever became rampant.

Between disease, starvation, and despair, over 180 of the 250 settlers perished before they were rescued by a ship from British Honduras. The survivors either returned to Great Britain or settled in British Honduras, now Belize, and the United States.

When the survivors shared their story with the newspapers, the truth finally came out: everyone had been taken for fools. Poyais did not exist. MacGregor had sold a fake country to an entire nation, a feat which today would be nearly impossible to achieve. But how did he do it?

First, he was a charming man with a knack for establishing connections with the right kind of people. His charisma was his greatest trait. When MacGregor spoke, people listened. He was able to communicate a sense of authority and authenticity to those around him.

He also knew whom to target. When searching for potential settlers to scam, he almost exclusively targeted other Scotsmen who were more willing to trust him at his word.

Furthermore, his name and titles (some of which were legitimately earned) carried a great deal of weight on their own. After all, he could still claim to be well-connected in Latin American circles, and he traveled widely in the New World. Why would a man of his background lie about a new country?

MacGregor had taken great pains to manufacture the legitimacy of his claims. He wrote a lengthy guidebook on Poyais detailing the land and providing several maps and illustrations. He forged paper currency and land grants, designed a national flag and a national anthem, and opened a fake embassy in London to establish legitimacy.

He produced so much disinformation to substantiate his claims that few people could doubt that a country like Poyais existed.

However, the biggest factor in his success was his timing. In the 1820s, London was experiencing an investment bubble in Latin American securities. Londoners were rapidly buying and selling bonds related to the Latin American market. 

This was complicated by the fact that Latin America was still changing. Venezuela, Peru, Bolivia, Gran Columbia – to many Londoners, it could be difficult to determine who governed what and where at any given time. No one was terribly surprised that a new country called “Poyais” had just recently emerged between Honduras and Nicaragua.

By the time the Poyaian settlers returned to London, it was too late. MacGregor had fled to France with his newfound wealth. He ran the scam again among the French, but this time the French government caught on quickly due to the volume of visa applications for a country that they suspected did not exist.

MacGregor was arrested and tried for fraud but was acquitted on all charges. He convinced the court that it was his business associates and publicists who were responsible for promoting the scheme, not MacGregor himself. Consequently, he was released from prison and returned to Great Britain.

He would continue to run this scam for the next 15 years of his life. Despite public warnings in London newspapers, some people continued to be caught up in the scam.

In 1838, MacGregor decided to try his luck in Venezuela. Despite Bolivar’s declaration that MacGregor was never to return on pain of death, MacGregor was received with open arms by the new government who seemed to forget his past failures. His rank was restored, and he leisurely enjoyed his remaining years living on a general’s pension.

Joshua Whitfield is the curator for the Amelia Island Museum of History.