Oscar Hartzell and the Francis Drake Fortune Swindle
English school children are taught that Sir Francis Drake was a gallant hero who saved his country from the Spanish Armada in 1588; schools are even named after him. The Spanish called Drake “El Draque” and placed a bounty on his head worth several million dollars in today’s money.
He was the first Englishman to circumnavigate the globe and was knighted by Elizabeth I in 1581 after his triumphant return. During his epic voyage, Drake anchored for a month near present-day San Francisco for repairs. While there, he claimed the area as a possession of Queen Elizabeth I and named it Nova Albion.
A more accurate depiction, before the spin doctors were able to polish up his image, is that Drake was a pirate and a slave trader; fitting occupations for someone whose name is attached to the scams that followed his death.
The Swashbuckling Privateer
Drake was allowed a free hand to prey on Spanish galleons through a commission from Queen Elizabeth.
Privateers were given letters of marque by their governments that authorized them to attack and plunder enemy vessels in time of war. This was a cheap way for governments to expand their fleets without dipping into the national treasury.
The privateer’s letter of marque described where and against whom he could operate. There was a large possible downside to attacking a naval vessel bristling with cannon so privateers focussed their attention on merchant ships. There was cargo to steal.
By the time he was 20, Francis Drake was privateering with gusto.
A BBC biography of Drake notes that after attacking Spanish ports and fleets in the Caribbean in 1572, he returned to England “with a cargo of Spanish treasure and a reputation as a brilliant privateer.” They were called “privateers” because “pirate” is such an ugly word.
There was to be more looting of Spanish gold that had been stolen from South American Indians. So, it was safe to assume Drake had stashed away a considerable nest egg.
Claiming Drake’s Fortune
Where did Drake’s money go?
When Drake died of dysentery off Puerto Rico in 1596, he left no legitimate heir and his fortune seemed to have vanished. Various claimants came forward with vague assertions of kinship, but none was able to prove direct lineage.
The man was scarcely cold before scammers started selling people on the idea they could get a share of the wealth. All they had to do was put up some money to grease some legal wheels and the loot would be released. This was a fraud that would have a long life. It lives on today in a slightly different guise.
Enter Oscar Merrill Hartzell
Across the Atlantic Ocean some people thought the story of Drake’s money held the promise of profit.
In 1919, (there is some disagreement about the date) a couple of con artists swindled an Iowa farm woman out of $6,000. They did so by selling her shares in a scheme to retrieve Sir Francis Drake’s lost wealth; a plot they had used successfully many times before.
The woman’s son, Oscar Merrill Hartzell, was intrigued by the scheme. He thought the plan, polished up a bit, had potential for expansion. He sold the fraudsters on a more aggressive business plan, and managed to cut himself in on the deal.
Soon, thousands of people whose last name was Drake received letters from the Sir Francis Drake Association.
Recipients were told the old sea dog’s wealth, now estimated at $22 billion or $400 billion, depending on Hartzell’s whim, was tied up in probate court. The entire English city of Plymouth was said to be part of the unclaimed swag.
To pry it loose from the British bureaucrats legal costs of $2,500 a week had to be covered. The many Drakes were invited to invest in the lawsuit and were assured that for every dollar they put up they would get back $500.
A lot of people found a five-hundred-to-one return on investment appealing. Oscar Hartzell generously opened his scheme up to anybody, whether Drakes or not, and as many as 70,000 subscribers signed on.
Hartzell Moves to London
To be closer to the legal action, or so he told his investors, Oscar Hartzell moved to England’s capital around 1924.
Those who were footing the bill would have been disappointed to learn that Hartzell was enjoying an opulent lifestyle on their dime.
He squeezed out his original partners but he had a team of agents back in the States who continued to sign up subscribers. Some of these agents believed the scheme was legitimate. He sent out newsletters telling his investors how he was engaged with the highest authorities in the U.K.
However, the British government had announced in 1922 that there was no Drake loot. The FBI investigated and found that Drake’s second wife, Elizabeth, had inherited whatever was in his estate.
But, despite the official word that there was no vast treasure to claim, Hartzell’s suckers continued enthusiastically to cough up coin to support his quest.
A common human trait is to stick with a decision even though evidence suggests it was a bad one. Not only do we refuse to admit we made a lousy investment, sometimes we plunge further into it in an attempt to convince ourselves that our original judgement was good. Organizational behaviour expert Barry Staw calls this “escalation of commitment to a losing course of action.”
Every time Hartzell ran a little short of cash his faithful followers were tapped for another contribution and he successfully ran his scam for 15 years. In all, he gathered up $2 million, worth at least ten times that much in today’s money.
The Law Catches up with Oscar Hartzell
The British couldn’t touch him because he broke no laws there, but eventually, the long arm of American justice reached out and grabbed him. He was deported to the U.S. to face mail fraud charges.
His trial was held in Iowa in 1933, and many of his subscribers contributed $350,000 to his legal defence fund and bail, so convinced were they that Hartzell was a straight shooter and they had invested wisely.
The court thought otherwise, Hartzell was convicted and given a ten-year sentence. Despite this, his agents collected another half million dollars from followers in the year after he entered Leavenworth Penitentiary. Some subscribers carried to their graves the belief they were about to score a big share of Drake’s spoils.
Oscar Hartzell died in custody in 1943, by which time he had gone mad and believed himself to be Sir Francis Drake.
Richard Rayner writes in The New Yorker that “In Iowa and Minnesota, in particular, the Drake estate became a craze that split entire towns into believers and non-believers.”
While Oscar Hartzell pulled off the biggest such scam, many others, then and now, have worked the con to relieve dupes of their money. The famous quote attributed to P.T. Barnum (although there's no evidence he actually said it) that "There's a sucker born every minute" applies here and elsewhere. If it looks too good to be true, it is.
A variant of the Drake estate swindle lives on today. Who hasn't seen a massage in their in-box from a confidential source in Nigeria? The fortune of Prince Mungambana can be yours for a small up-front investment needed to pay the legal expenses involved in untangling it from corrupt bureaucrats.
A W.C. Fields 1939 movie stated an off-quoted maxim in its title "You Can't Cheat an Honest Man."
- “Sir Francis Drake.” BBC History, undated.
- “The Francis Drake Association Hoax.” Cory Family Society, March 13, 2012.
- “The Admiral and the Con Man.” Richard Rayner, New Yorker, April 22, 2002.
- “How to Escape from Bad Decisions.” Adam Grant, Psychology Today, July 9, 2013.