The New York Times reported on Wednesday that Sam Bankman-Fried, the erstwhile CEO of fallen cryptocurrency giant FTX, is officially under federal investigation for manipulating the prices of TerraUSD and Luna, two popular currencies. On this week’s episode of Now & Then, “FTX, Con Men, and the Power of Grift,” Heather Cox Richardson and Joanne Freeman discussed the history of American fraudsters, from Herman Melville’s 1857 The Confidence-Man to Charles Keating’s late-1980s Savings & Loan meltdown. In the late 1950s, Lowell Birrell, a particularly brazen stock manipulator, left financial havoc in his wake when he fled the country amid a collapsing empire of overlapping corporations.
Lowell Birrell was born in Whiteland, Indiana in 1907, the son of a poor Presbyterian minister. He graduated from Syracuse at eighteen and immediately entered the University of Michigan Law School, which waived the minimum age requirement due to his academic prowess. “I decided early I wasn’t going to be poor,” Birrell later told a friend.
After stints in corporate law, Birrell opened his own office in 1933. In the late 1930s, Birrell represented New York Yankees pitcher Lefty Gomez in his divorce proceedings, even coughing up $825 out of pocket to defray postponement fees so Gomez could finish Spring Training.
Birrell soon started using his legal earnings to invest in businesses. The same year as the Gomez representation, Birrell borrowed money from Ruby Schinasi, the widow of wealthy “cigarette king” Leon Schinasi, and bought a controlling stake in a local brewery called Fidelio Beer, quickly gobbling up other local beer-makers and merging them in 1941 into Greater New York Brewery, Inc.
As Birrell’s holdings grew, he began to make powerful friends. In 1944, Birrell developed an association with Cecil Parker Stewart, the President of Munson Steamship Lines. Stewart was suffering from inoperable cancer. Birrell knew of a holistic Peruvian doctor and recommended him; Stewart’s pain immediately improved, and Stewart, in gratitude, made Birrell the executor of his will and his prime corporate beneficiary. Stewart died five months later.
One of Birrell’s first big tentpole enterprises was United Dye & Chemical Corps, which he acquired in 1953 and enriched through a series of intermediary insurance companies run by his ally, San Francisco-based Stewart B. Hopps.
By his peak in the mid-1950s, Birrell controlled more than 20 companies. In a convoluted mess of illicitness, he began to steal stock from many of these interlocked concerns, in addition to faking earnings statements and self-dealing shares from corporation to corporation to keep the colossus afloat.
Birrell’s largest con came from a foundering sperm oil distribution company called Swan-Finch. Upon taking control in 1954, he quickly issued massive amounts of stock in the mostly-worthless corporation, failing to register the new shares with the Securities and Exchange Commission.
To give Swan-Finch some street cred, Birrell hired Robert F. Six, the Continental Airlines CEO and Broadway legend Ethel Merman’s husband, to run the outfit. Birrell also flamboyantly purchased Pennsylvania gas fields, New Mexico uranium mines, and Upstate New York grain terminals. Birrell then bribed contacts at the American Stock Exchange to inflate the value of Swan-Finch shares.
“In 103 years…we’ve expanded from Fish-Oil to Fission,” read an atomic age-inflected Spring 1956 Swan-Finch advertisement in the New York Times.
In a further ploy, Birrell used another one of his companies, the tissue paper firm Doeskin, to buy a subsidiary of Swan-Finch called Keta Oil. Birrell simply pocketed the money from the fake deal.
As Birrell built up his financial empire, he also embraced a flashy – and often downright hedonistic – lifestyle. He purchased a 1,200-acre farm in New Hope, Pennsylvania, called Echo Falls, expanding the property by buying out the adjoining plots of playwright Moss Hart and On the Waterfront screenwriter Budd Schulberg and building a 7-acre artificial lake for his 40-foot motorless yacht. While Birrell was married to his wife Mary Virginia, he often hosted escorts who worked for notorious oleomargarine heir and vice lord Mickey Jelke (“The Jelke Girls”).
“He drank heavily,” Playboy recounted in 1962. “He sometimes stayed up carousing all night for two or three nights in a row, refreshing himself now and then by catnapping in a telephone booth or with his head on a nightclub table.”
Things began to get dicey in 1955, when fellow millionaire playboy and friend Serge Rubinstein – heavily invested in Birrell companies – was strangled in his Fifth Avenue mansion by a still-unknown assailant while under investigation for extortion.
Then, in April 1957, the SEC subpoenaed Birrell after catching the scent of his unregistered stock sales. The value of his companies quickly plummeted in response, leaving victims that included famed restaurateur Toots Shor and Brooklyn Dodgers baseball manager Chuck Dressen.
By then, the collapse of Birrell and Hopps’ California-based insurance company, Inland Empire, had left 250,000 Americans down a collective $20 million. An additional $8 million was lost when another Birrell-owned West Coast firm, Equitable, went down. New York Herald Tribune muckraker David Steinberg crafted intricate tales of the house of cards Birrell had constructed, complete with graphs showing the overlapping directorates of Birrell’s shells.
On October 4th, 1957, Birrell vanished from the United States. Authorities searched in vain for the fleeing financier. As it turned out, Birrell had flown from LaGuardia Airport in New York to Havana, Cuba. Over the next year, he occasionally slipped in and out of the U.S. In May 1958, for example, he suddenly showed up at his Bartels Beer Company annual meeting in Edwardsville, Pennsylvania, where he talked with Bartels attorney and former Pennsylvania Governor John Fine. In January 1959, Birrell was presumed to briefly be in Florida when his still-active American Express account was charged at the Post & Paddock Restaurant in Miami Beach.
After Communist Fidel Castro took control of Cuba, Birrell used a false Canadian passport to flee to Brazil, the one Western Hemisphere nation lacking an extradition treaty with the United States. Once settled in Rio, Birrell bought up four hideouts and became the guardian of a Brazilian corrupiao bird, a type of oriole.
In July 1959, a New York County Grand Jury indicted Birrell on 69 counts of grand larceny. Birrell had stolen at least $14 million, including $3 million in cash with which he had absconded, from his companies and investors. “This doesn’t mean Birrell enriched himself to that amount,” Manhattan District Attorney Frank Hogan declared. “But he tried.” Hogan sent out a 49-state police alarm in search of more sneaky Birrell entrances, the first time that New York authorities had ever sent out such a warning.
The SEC, meanwhile, called Birrell “the most brilliant manipulator of corporations in modern times.”
The American press went into overdrive to profile the eccentric con man. “He is a high-I.Q. financier. He is a high-living hell-raiser. He is a highly regarded host and was once a highly capable lawyer,” a mammoth July 20th, 1959 LIFE Magazine profile titled, “A Master Rogue Unmasked,” said of the disgraced Birrell.
The FBI pressed Brazilian authorities to track down Birrell, even sending along the LIFE profile for added background. Rio police tracked down Birrell, who was briefly imprisoned for using false documentation.
Hogan aggressively pushed for some kind of special extradition protocol, but Brazil resisted. Hogan lashed out at American diplomats, saying all he got from the Embassy was “a run-around and a lot of lectures on Latin-American relations.”
In August 1959, the FBI found Birrell’s corporate records, twenty filing cabinets Birrell had stashed in a barn of a former associate outside of Doylestown, Pennsylvania. “This looks like everything all interested parties have been looking for,” Assistant U.S. Attorney James D. Phelan told the press.
Despite all of the evidence, Birrell was soon free and seen dining with the prison warden. A November 16th, 1959 TIME magazine profile, “The Gay Victim,” found Birrell consistently drunk on vodka in Rio, living a $200 a night lifestyle at the Copacabana Palace and Au Bon Gourmet.
The disgraced entrepreneur marveled to TIME about the sheer scope of investment opportunities in his new home: “The big problem in Brazil is to select which opportunity you want to concentrate on. It’s like being a hungry kid in a candy store. You don’t know which box to pick from.”
Despite his apparent ebullience, some cracks showed. Birrell made a point of praising his night bodyguard, Alvaro Fernández. “Alvaro here and a lot of friends in the police are taking care of me on their days off. I have a lot of friends.”
By the end of his drink-heavy night with the TIME correspondent, Birrell appeared more somber. “I don’t know what I’m a victim of, but I’m a victim all right,” he said.
Birrell settled into an expatriate routine in Rio, where he was joined by Ben Jack Cage, a Texas insurance con man, and Earl Belle, a 27-year-old “boy wonder” who bilked several Pittsburgh banks out of nearly $1 million. As Birrell languished at a beachside apartment, a tangle of civil and criminal lawsuits piled up: from the California insurance companies, the Swan-Finch shareholders, and the banks who had loaned to Birrell.
Birrell dismissed the cases in an interview with Look magazine in February 1962: “The whole thing is a dirty conspiracy. First the U.S. is trying to have me kidnapped; then they’re trying to have me extradited. I suppose they’ll drag me back in the end, but it won’t be this year or next year, either.”
“I’ve got nothing to worry about,” Birrell went on. “It’s just a complicated business problem. People just don’t understand anything about high finance.”
He even denied that he had left the U.S. for legal reasons: “I told everyone I wanted to move when I was 50 and settle in South America where the living is a lot easier. I told ‘em, whether I had two million or two cents, when I was 50 I’d quit.”
In early 1964, Birrell, low on cash and fearing the implementation of an extradition treaty with Brazil ratified months earlier by the Senate, finally signaled his intention to return to the United States to face trial. The Wall Street Journal speculated that Birrell’s once-prominent place in New York society could make his return scandalous for the city’s upper crust: “The prospect is frightening to many lawyers, businessmen and politicians who at some point during their careers brushed up against arch-swindler Birrell.”
Birrell was met by FBI agents when he landed at LaGuardia on April 23rd, 1964. Birrell smiled and appeared unruffled, but the U.S. Attorney for the Southern District of New York, Robert Morgenthau, contended to the press that a pressure campaign, not anything purer, had brought Birrell home. “He did not return voluntarily,” said Morgenthau, who had piggybacked on Hogan’s cases with an additional six indictments against Birrell.
New indictments poured in through the end of the 1960s, and a virtually penniless Birrell continued to aggressively fight cases through the end of the 1970s, going in and out of prison until his death in 1993.
The enduring appeal of Birrell – and of the larger-than-life con man in American life – was summated in the 1959 LIFE profile by an unnamed New York businessman whose company was looted by Birrell. The victim said of the con artist, “I bear him no animosity. If he walked in the door now I couldn’t hate him, and if he needed a few hundred bucks he’d get it.”
For more on Birrell and other financial operators of the late 1950s, check out Fortune journalist T.A. Wise’s 1962 The Insiders: A Stockholder’s Guide to Wall Street.
And head to the Twitter account of Now & Then Editorial Producer David Kurlander for supplemental archival threads on each Time Machine piece: @DavidKurlander.
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Catch up on some recent Time Machine deep dives into history:
- ‘The Person in Charge’: Nancy Pelosi and the 1984 Democratic National Convention
- ‘Tea Chest Tempest’: The Boston Tea Party, the Massachusetts Historical Society, and the Search for Historical Authenticity
- ‘Finally, One of Our Guys is Driving the Car’: Bill Clinton, the Youth Vote, and MTV
